Massive Bellwether District project ahead of schedule with preparations underway for Phase 1
Hilco Redevelopment Partners is turning the former PES oil refinery site into a 1,300-acre industrial and life sciences hub in South Philadelphia. This rendering shows the industrial buildings that are planned.
HILCO REDEVELOPMENT PARTNERS
Three years after beginning a massive overhaul of the former Philadelphia Energy Solutions refinery site in South Philadelphia, Hilco Redevelopment Partners has finished abatement and demolition on 95% of the property. The Chicago company is now preparing part of the 1,300-acre site for the start of construction on Phase 1 of its Bellwether District in the fourth quarter of this year.
The project calls for redevelopment of the property into an expansive logistics and life sciences hub over more than a decade. Life sciences space would be built on the northern 250 acres of the sprawling site, which stretches along the Schuylkill River from Grays Ferry almost to the western edge of FDR Park. More than 10 million square feet of industrial space would be built on the rest. HRP, part of Hilco Global, estimates the development will lead to 19,000 jobs when fully built out.
The firm and its joint venture partner, Caisse de dépôt et placement du Québec, received a $500 million loan in January 2022 to fund the Bellwether District redevelopment.
HRP is planning two industrial buildings in the first phase of construction, one with 700,000 square feet of logistics space and another with 325,000 square feet.
“All that hard work, it starts to become tangible,” HRP Chief Investment Officer Andrew Chused said of clearing out the property. “You can start to see the future coming.”
HRP acquired the former PES oil refinery for $225.5 million in June 2020. Demolition and environmental remediation of the site began that summer, and Chused said HRP originally planned a four-year process. Now ahead of schedule, nearly the entire 1,000-acre refinery is gone and developable land remains.
“It is land again,” Chused said. “The refinery is nowhere really in sight.”
The 1,300-acre Bellwether District would be split between 250 acres for a life sciences campus and the rest for an industrial campus.
HILCO REDEVELOPMENT PARTNERS
Clearing the site involved removing more than 150 tanks and 950 miles of pipeline. Chused said taking the refinery apart was like untangling a giant web since every pipe needed to be cleaned and every part had some nuance.
Site preparation is now beginning for Phase 1 of the industrial park. HRP is raising the site out of the 100-year floodplain and raising the building slabs out of the 500-year floodplain.
The buildings are planned to be LEED certified as HRP emphasizes the site’s transition from a polluter to more environmentally friendly buildings.
Meanwhile, HRP has had ongoing conversations with local stakeholders for a community benefits agreement. Chused said HRP has plans for scholarships and a workforce development program. “If we can remediate and unlock these sites, reincorporate the site into the street grids and bring jobs and bring economic vibrancy, we're really reinventing a little corner of the city.
And it's not that little,” Chused said. “It's an overwhelming responsibility, but an opportunity that we think is just truly a once in a lifetime.”
A 250-acre life sciences campus would be built as part of Hilco Redevelopment Partners' Bellwether District along the Schuylkill River in South Philadelphia.
HILCO REDEVELOPMENT PARTNERS
HRP expects the first two industrial buildings will take a year to build once construction starts. They’re being built on spec, but Chused said prospective tenants have already been asking about the property. He plans to start marketing the site more formally in the next two months.
Demand for industrial space has been high throughout the Philadelphia region in recent years. Chused said the average industrial building in the region was built in 1958, only 1.9% of industrial space is vacant and only 6.5% of the supply is considered Class A.
“We think there’s a huge void for us to deliver Class A, sustainable new construction space that users want,” Chused said. “And that will continue to drive business and jobs in the area.”
On the north side of the campus, the first phase of life sciences development is planned to include three buildings. Two would have 150,000 square feet of life sciences space and a third would have 180,000 square feet. Those buildings are still being designed and are a few months behind the industrial timeline, Chused said.
“I feel like we’re in the second inning of the project,” Chused said. “The first inning was removing the refinery. The second inning is really now just beginning. It’s an exciting place to spend our careers.”