Hilco Redevelopment Partners, whose $240 million bid won an auction to acquire the bankrupt Philadelphia Energy Solutions refinery site, aims to move quickly to clean up the 1,300-acre South Philadelphia property and redevelop it into a mixed-use industrial facility, according to city officials.
“I think their timeline is aggressive, I’ll put it that way,” Brian Abernathy, Philadelphia’s managing director, said in an interview Wednesday. “I think they want to be in the ground quickly.”
Mr. Abernathy, who headed a four-person city government delegation that attended Friday’s six-hour long auction, said Hilco had done its homework and came well-prepared for negotiations. The Chicago-based company, which specializes in repurposing industrial properties, did not submit a formal plan for the site, but painted its plans in “broad brushes,” he said.
“They’ll probably still keep the tank farm and some of the some of the energy logistics that are on site, but they don’t intend to operate the refinery,” said Mr. Abernathy. He said they’re likely to develop the site for multiple users, which he said was “exciting” because the property will be less dependent upon a single industry that is susceptible to boom-and-bust cycles.
“Generally I think the way that the site is going to relate to the community — both the nearby community and the city as a whole — is going to be much different than it is today,” he said.
Hilco has acquired old power plant sites in Boston and New Jersey. But its Tradepoint Atlantic development on the former Sparrows Point steel mill in Baltimore — a 3,100-acre property more than twice the size of PES — is probably most analogous to the South Philadelphia property. Since buying the steel mill eight years ago for $72 million, Hilco cleared the land and has erected warehouses and distribution centers for Amazon, Home Depot, Volkswagen, Under Armour, and recently agreed to host a staging site for Ørsted, the Danish off-shore wind farm developer.
PES’s plans to sell the site to Hilco require the approval of U.S. Bankruptcy Court Judge Kevin Gross, who has scheduled a confirmation hearing for Feb. 6. The deadline for creditors to vote on the plan, and for filing any objections to the plan, is Feb. 3.
A Hilco spokesman did not respond to a request for comment on Wednesday.
Under the plan, Hilco will assume environmental liabilities and clean-up costs, according to a purchase agreement posted early Wednesday with the U.S. Bankruptcy Court in Wilmington. It’s unclear how Hilco will coordinate its plans with Sunoco Inc., a previous owner of the refineries that in 2012 agreed to clean up legacy contamination on the land.
But Mr. Abernathy said that Hilco indicated it had discussions with Sunoco and with officials from the U.S. Environmental Protection Agency and the Pennsylvania Department of Environmental Protection prior to the auction.
“Their intent around remediation showed a lot of forethought that they were thinking through how to tackle the various problems that the site faces, which gave me some comfort,” said Mr. Abernathy. He said Hilco likely would go through a “phased development” where some sections of the property are cleared and redeveloped before others.
Some former refinery employees expressed resignation that the petroleum-processing complex, which had been operating for 150 years, was probably closing for good.
“The nail’s probably in the coffin for the refinery,” said Ryan O’Callaghan, a spokesman for Steelworkers Local 10-1, which represented 640 of the refinery’s 1,100 employees before it shut down. “We’re waiting to see what Hilco’s plans are.”
Community and environmental advocates, who had vowed to oppose a continuation of refining on the property, on Wednesday said they were encouraged by the auction’s outcome.
“With Hilco’s proposal likely to be approved by the bankruptcy court, we are cautiously optimistic about the opportunity for the site to be much less polluting than its previous use as a refinery,” Joseph Otis Minott, executive director of the Clean Air Council, said in a statement.
“The public must now do everything it can to hold Hilco accountable for developing the cleanest and safest uses possible at the site,” Mr. Minott said. “Clean Air Council urges Hilco to reach out to stakeholders, including environmentalists and nearby neighbors, to work with them on the future use of the site.”
Philly Thrive, an environmental justice group that has conducted frequent protests related to the refinery, said it wanted assurances from Hilco there would be no refining operations on the site; that Hilco would provide funding to assist the public with technical participation in clean up plans; allow active public involvement in plans for redevelopment; and establish a quota for quality, union jobs to surrounding neighborhoods.
Mr. Abernathy, the city managing director, said Hilco’s aims seemed to be aligned with the values expressed in the recent report of Mayor Kenney’s Refinery Advisory Group, which hoped for a new owner to put the public’s safety as a top priority and to have a more positive impact on the environment and the surrounding community.
“I think they can be really strong partners,” he said. “Not that everything’s gonna be hunky-dory all the time, because nothing’s ever easy with development projects of this size. But, you know, I think Hilco’s approach and their ability to communicate with the city is leaps and bounds above where we were.”
Source: Post-Gazette