Philadelphia refinery purchase to spur major demo project

Northbrook, Illinois-based Hilco Redevelopment Partners (HRP) has purchased the 1,300-acre former Philadelphia Energy Solutions (PES) oil refinery in the southwest part of Philadelphia for $225.5 million. HRP says it plans to dismantle and demolish the refinery to build “an environmentally responsible and economically robust commercial hub” at the site.

“Our plan is to transform the site into a commercial hub to be shared by dozens of world-class companies that will benefit from Philadelphia's diverse workforce and strategic location with an environmentally responsible infrastructure that will be great for all Philadelphians,” says Roberto Perez, CEO of Hilco Redevelopment Partners.

HRP estimates that during the remediation, demolition and redevelopment phase, the project will “generate many job opportunities and rely heavily on local unions and local trades”

The company says “a fresh vision” for the 150-year-old industrial site will be realized, “resulting in one of the largest and most strategically significant multi-modal logistics hubs in the country, which leverages the site’s unparalleled infrastructure and location.”

According to a July online article by the Philadelphia Inquirer, the 335,000 barrels per day refinery experienced a fire on July 10, but was already “facing financial woes” even after emerging from bankruptcy in 2019. It was, nonetheless, the largest such refinery on the East Coast of the United States, according to the article.

The refinery has operated under several names during its century and a half in existence, starting as an Atlantic Refining Co. (ARCO) refinery in 1870. The Gulf Oil Corp. built a refinery nearby in  1926 and Sunoco acquired both plants in 1988 and 1994, according to the Inquirer. “Then, in 2012, Sunoco formed a joint venture with private-equity Carlyle Group. The joint venture declared bankruptcy in January 2018, and completed [a] $635 million financial restructuring” in 2019.

An overhead view of the 1,300-acre complex posted by the Inquirer shows a sprawling complex with numerous buildings and metal storage tanks, including a “tank farm” with some two dozen such liquid bulk storage units on one portion of the land.

HRP has experience redeveloping large industrial properties, including the 3,300-acre Bethlehem Steel Sparrows Point steel mill complex near Baltimore. “Together, with our JV Partner Redwood Capital, we have developed and built Tradepoint Atlantic, a state-of-the-art tri-modal logistics complex that has generated more than 8,500 new jobs to date and is expected to account for as much as 1 percent of Maryland’s GDP by 2025,” says HRP of its work at the Sparrows Point site since 2012.