NAVIGATING THE COMPLEXITIES OF ACQUIRING THE HISTORIC PES REFINERY: HRP GROUP’S BOLD VISION FOR THE BELLWETHER DISTRICT

NAVIGATING THE COMPLEXITIES OF ACQUIRING THE HISTORIC PES REFINERY: HRP GROUP’S BOLD VISION FOR THE BELLWETHER DISTRICT

BY JEREMY GREY, EXECUTIVE VICE PRESIDENT OF INDUSTRIAL DEVELOPMENT | HRP GROUP

The 1860s marked a pivotal era in Philadelphia’s industrial history, with the establishment of the Philadelphia Energy Solutions (PES) refinery, originally a whale oil refinery. Fast forward over 150 years and this historic site would become the focal point of HRP Group's acquisition and redevelopment, following a devastating explosion in June 2019 that led to the refinery’s bankruptcy. The process of purchasing this massive 1,300-acre parcel, covering nearly 2% of Philadelphia’s land area, was fraught with challenges, from navigating complex bankruptcy proceedings to conducting due diligence at the height of the COVID-19 pandemic.

“It was hard to believe that such a large asset existed within city limits, close to strategic infrastructure and a strong labor force” HRP Group noted.

By leveraging its expertise in brownfield redevelopment, HRP Group was able to finalize the purchase in June 2020. The company’s experience with environmentally challenging sites, coupled with proactive stakeholder engagement and multiple pre-closing agreements, made the acquisition possible. Reflecting on the site’s legacy, HRP Group acknowledged that the last time a property of this magnitude was master-planned in Philadelphia was by William Penn in the 1680s.

A Monumental Undertaking: The Bellwether District

The transformation of the former refinery site into The Bellwether District represents a monumental project. Envisioned as a 1,300-acre, multi-modal logistics park, The Bellwether District will be the future home for leaders in e-commerce, life sciences, innovation, and logistics. The scale is staggering: 15 million square feet of new development will reshape the region’s economy, delivering sustainable growth and driving change.

Since acquiring the site, HRP Group has embarked on an ambitious journey, undertaking demolition, decommissioning, master planning, environmental remediation, and vertical construction. A few key achievements include:

• Demolition & Decommissioning: The refinery’s closure has contributed to a 16% reduction in Philadelphia’s carbon footprint. HRP has removed 920 miles of pipelines (equivalent to the distance from Philadelphia to Florida), dismantled 350 tanks, and repurposed over 200,000 tons of metal.

• Site Work: The extensive earthwork, expected to move 4 million cubic yards of soil, is raising the site above floodplain levels to ensure climate resilience. To date, 1.8 million cubic yards of earth have been shifted.

• Infrastructure: The plan includes 20,000 linear feet of new roads and 40,000 linear feet of new utilities to serve the logistics park.

Economic and Employment Impact

The Bellwether District is expected to generate substantial economic benefits for the city and state. Over the lifetime of the project, HRP Group estimates the creation of 47,000 jobs—28,000 of which will be project-related and 19,000 permanent. So far, 2,000 workers have already been employed onsite. The projected tax revenue for the City of Philadelphia stands at $100 million annually, with another $120 million anticipated for the Commonwealth of Pennsylvania.

Key Lessons and Best Practices in Large-Scale Development

One of the crucial lessons HRP Group learned is the importance of stakeholder outreach during the early stages of such large-scale projects. “We needed a plan that was supported by the community” HRP Group emphasized. Early feedback indicated a desire to reconnect the formerly closedoff area to the city, leading to the inclusion of bike lanes and pedestrian paths, new roads, and public transportation improvements. Sustainability was another priority. Plans for The Bellwether District include 10,000 new trees, LEEDcertified buildings, solar-ready rooftops, and electric vehicle infrastructure.

Strategic planning and coordination have been essential in managing the many moving parts of this project. Aligning demolition, environmental remediation, and development workflows while accounting for contingencies, has been vital to progress.

The Role of Contractors in Addressing Challenges

Given the complexity of redeveloping a 154-year-old refinery site, HRP Group relies heavily on its contractors to creatively address unforeseen conditions. Sitework challenges, such as soil issues and underground obstructions, are significant and contractors are expected to propose innovative, costeffective solutions. Additionally, HRP Group values thoughtful approaches to reusing onsite materials and managing environmental remediation.

A Focus on Safety, Local Expertise, and Inclusion

When awarding contracts for The Bellwether District, HRP Group prioritizes safety, proven track records, and local expertise with brownfield sites. Inclusion and local participation are also critical, particularly as it relates to hiring practices. The company is committed to ensuring the involvement of local contractors and workers in this transformative project.

Supporting Major Developments and Future Growth

HRP Group credits the City of Philadelphia with being a strong partner in The Bellwether District’s development. For future growth, they urge the city to continue issuing permits and approvals promptly to meet market demands and tenant requirements. Given the size and scope of The Bellwether District, the company also encourages the city to adapt some of its permitting processes and design criteria to better accommodate large-scale projects.

The Path Forward: Evolving Plans and Tenant Attraction

As The Bellwether District evolves, HRP Group remains focused on attracting a diverse range of tenants in sectors such as e-commerce, life sciences, logistics, and light manufacturing. Additionally, the site’s significant electrical infrastructure makes it ideal for data centers. HRP also anticipates strong demand from port users, marine industries, and air cargo businesses, given the site’s proximity to key transportation hubs.

HRP Group’s redevelopment of The Bellwether District is not just a project; it is a vision for Philadelphia’s future, blending sustainable growth with cutting-edge innovation to revitalize a historic site and create opportunities for generations to come.