Philadelphia City Council approves extension of tax breaks for former PES refinery site

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Philadelphia City Council agreed to extend state and local tax breaks for the developer building warehouses at the site of the former Philadelphia Energy Solutions refinery.

Council unanimously passed a 10-year extension of the Keystone Opportunity Zones covering the 1,300-acre property along the Schuylkill River in South and Southwest Philly. The site, now mostly vacant, once housed the largest oil refinery on the East Coast, which closed after a fire and series of explosions in 2019.

The developer argues it needs the tax exemptions, which currently expire in 2033, to stretch through 2043 to attract tenants to the Bellwether District, a planned complex of over a dozen warehouses and several buildings intended for life sciences manufacturing, research and development. The first two warehouses are under construction, while the life sciences campus is in the site preparation phase.

“[The zone] currently expires before many of the companies that would be locating at the Bellwether District and creating jobs in Philadelphia would be able to realize meaningful benefits,” said Amelia Chassé Alcivar, executive vice president of corporate affairs with HRP Group, the site owner. “Securing this extension is vital to ensure that … we can attract those companies.”

Chassé Alcivar said the extension of a zone covering the shuttered Schuylkill River Tank Farm across the river in Southwest Philly is necessary to finance demolishing it, elevating it out of the floodplain and preparing it for redevelopment. When HRP Group initially bought the former refinery site, company officials said they hoped to keep and maximize use of the tank farm as a place to store and distribute petroleum products — then shuttered it due to market conditions. Nearby residents hoped to see it demolished, and seven activists were arrested at a “people’s decommissioning” of the tank farm in 2022.

“We are prepared to move forward on the decommissioning of the Schuylkill River Tank Farm if we’re able to secure this opportunity zone extension,” Chassé Alcivar said Thursday.

Keystone Opportunity Zones (KOZ), designed to increase private investment on underdeveloped sites and spur economic growth, provide exemptions or reductions in state and local taxes including sales tax, business income tax and city real estate tax. Although some property owners in the program are required to make payments in lieu of taxes to the city and school district, the School District of Philadelphia estimates KOZs have cost it around $60 million since 2017. 

Out of the more than 200 properties in Philadelphia with active KOZ designations as of July, the extended zones covering the Bellwether District site would stretch the furthest into the future.

Lynette Sutton was one of several people working in or representing building trades who supported the tax break extension during City Council’s meeting Thursday. Sutton manages Girl Concrete, a company currently working on the site. She said the company’s contract with the Bellwether District is its largest since Girl Concrete was founded in 2022.

“This opportunity has allowed us to build our capacity, grow our workforce and scale our business,” she said.

But environmental justice activists opposed the extension — arguing City Council should do more to ensure the development will be safe for and benefit surrounding residents before approving more tax breaks. Members of the Grays Ferry-based group Philly Thrive, which pushed for the refinery’s closure and have argued the redevelopment process has not included enough community input, attended Thursday’s meeting wearing clown costumes to mock council members, environmental regulators and the developer.

“Today marks the successful shutout of the environmental justice community surrounding the old oil refinery site, and all of their silly little concerns about the future of their health, housing security and their families,” Thrive member Allie Naganuma said sarcastically. “It is just so fun to play around with people’s lives.”

The KOZ extensions at the Bellwether District site still need approval from the Philadelphia Board of Education.