Company buying bankrupt PES refinery promises 18,000 jobs in next 10 years

Hilco Redevelopment Partners, the company approved to buy the Philadelphia Energy Solutions refinery complex in South Philadelphia out of bankruptcy, projects that its multibillion development will take about a decade to complete and create 8,000 union construction jobs and 10,000 permanent jobs.

A Hilco executive presented part of the company’s plan for the 1,300-acre site at a City Council hearing Monday. The council’s finance committee advanced a bill introduced by Councilmember Kenyatta Johnson that would extend the refinery’s Keystone Opportunity Zone status, first granted in 2014 but expiring by the end of the year. Properties and businesses located in such state designated zones pay little to no state and local business taxes.

“It’s projects like this, I believe, that will help jump-start our economy; it’s projects like this that will put people back to work,” Johnson, whose district includes the site, said. “This can be an economic engine not only for South Philadelphia, but for the Philadelphia region.”

According to Jeremy Grey, Hilco’s executive vice president of industrial development, the former refinery will come back to life as a state-of-the-art logistics park, with 13 million to 15 million square feet of logistics centers, taking advantage of the rail and maritime infrastructure of the site and its proximity to Philadelphia International Airport.

The buildings will focus on sustainability, Grey said, and include solar panels in the roofs, infrastructure for electric vehicles, LED lighting, and extensive landscape plans.

Grey said the company is committed to having an extensive outreach plan to get feedback from the community. It will open an office on the site and hire a diverse and local workforce, he said.

“We are very committed to working with the city, making sure these jobs are good wage jobs … everybody is very happy with, and long-term jobs, and that the jobs stay within the community and people are able to get to these jobs easily by enhancing public transportation,” he said.

On top of job creation, Grey said, a draft economic impact study created by local consulting firm Econsult indicated that the development would generate $36 million in city wage, business and sales tax revenues during construction and $41 million after the site is operational.

The city’s senior deputy commerce director, Duane Bumb, testified in favor of the Keystone Opportunity Zone extension, arguing it would allow 10% extra revenue to the city’s general fund and the school district.

Councilmember Bobby Henon pushed back, saying the approval seemed “a little bit rushed” considering a number of missing elements and unknowns, starting with when the sale will close. Philadelphia Energy Solutions and Hilco’s deadline to close was May 31, but the deadline was extended to resolve issues around easements on the site, according to Bumb.

He said that Hilco will generate investments of billions of dollars, and that it has committed $500 million for cleanup of the site. City Council approval of the Keystone Opportunity Zone extension is critical, Bumb said, because the city has to apply before Oct. 1 for it to be in effect in January 2021.

Closing on the $252 million sale of the complex is imminent, Grey said.

“We are talking now days, not weeks,” he said. “We don’t see anything that is going to hold us up, we are getting through all the documents, and we’re funded and ready to close.”

Hilco has been working with environmental regulatory agencies to continue with the remediation of the site, and will fully align the demolition, remediation and redevelopment to their stipulations, Grey said

“We have agreements with them to work as partners to fully remediate the site,” he said.

A community benefit agreement will be presented in a zoning overlay bill to be presented to City Council in the fall.