Refinery shutdown could mean new life for 1,400 waterfront acres

Although PES officials have said the intend to sell the complex for continued use as a petrochemical plant, some are now considering alternate futures for the site.

The Philadelphia Energy Solutions Refining Complex in Philadelphia is shown Wednesday, June 26, 2019. The owner of the largest oil refinery complex on the East Coast is telling officials that it will close the facility after a fire last week set off explosions and damaged the facility. Philadelphia Mayor Jim Kenney said in a Wednesday, June 26, statement that Philadelphia Energy Solutions has informed him of its decisionRead moreMatt Rourke / AP

by Jacob Adelman

Published June 26, 2019, 5:59 p.m. ET

With the closure of the Philadelphia Energy Solutions refinery complex on the Schuylkill waterfront next month, the city could be left with 1,400 unused acres between University City’s dynamic medical-research zone and the burgeoning neighborhoods of South Philadelphia.

“This is a once-in-a-generation opportunity to really look at what we can do with some obsolete, early-20th-century plans and buildings and refineries,” said developer Carl Dranoff, who started off by repurposing industrial buildings north of the complex into housing. “We have an opportunity to reinvent Philadelphia.”

The complex mostly hugs the Schuylkill’s eastern bank that’s bounded by I-76, from the neighborhood of Point Breeze down nearly to the Navy Yard, the former military base that’s now a growing office and industrial park.

The complex forms part of a 3,700-acre swath along both sides of the river that the Philadelphia Industrial Development Corp. and other city agencies examined when they released their Lower Schuylkill Master Plan in 2010.

The document recommended an “Innovation District” of lab, office, and high-tech production space in an area largely between the Schuylkill’s western bank and and the neighborhood of Kingsessing, with a “Logistics Hub” of warehouse complexes to the immediate south, arching into Southwest Philadelphia.

Some of that vision is already being realized, with such developments as the University of Pennsylvania’s Pennovation Center on a section of the high-tech zone that used to be the DuPont Marshall Research Labs’ paint-production facility.

But the Master Plan’s recommendations for the Philadelphia Energy Solutions property — dubbed the “Energy Corridor” — consisted of infrastructure improvements under the assumption that it would remain in use as a refinery indefinitely.

Although PES officials have said they intend to sell the complex for continued use as a petrochemical plant, some are now considering alternate futures.

“I’m sure it will be a long process to repurpose that site into something that can productively employ people, as well as be additive to the Philadelphia cityscape,” said Jerry Sweeney, chief executive of Philadelphia’s biggest office landlord, Brandywine Realty Trust, and founder of the nonprofit Schuylkill River Development Corp.

Peter Angelides, a principal of Philadelphia economic-development consultancy Econsult Solutions Inc., said that recently announced plans to build homes at the former William Cramp & Sons Shipbuilding Co. in Fishtown “shows that if the new use is valuable enough, it can support cleanup of former industrial sites.”

Leo Holt, president of Holt Logistics Inc., said he believes the site could be reused most productively as a port facility, such as his company’s Packer Avenue Marine Terminal in South Philadelphia.

The city has massive unmet port demand and the refinery property is large enough to attract big tenants who demand lots of space, Holt said by phone from Morocco, where he was meeting with North African distributors of Philadelphia-bound goods.

The site retains the rail, freeway, and maritime links that it depended on for the transport of chemicals, while its location in the middle of a densely populated city gives it access to the stevedores, truckers, and other workers it needs, Holt said.

“The silver lining to this otherwise quite dark cloud is that it’s in the middle of an area that can very much enjoy employment, and it’s in the middle of a distribution nexus that is unparalleled,” he said.

Grady, at PIDC, agreed that the refinery complex — like other longtime industrial facilities on the lower Schuylkill — may lend itself to such a use, since the surrounding rail and roadways would make it hard to merge with adjacent neighborhoods, and because of its environmental contamination.

“I think we have to be realistic that there’s a set of conditions in and around that site that will reinforce its highest utility toward supporting production and employment,” Grady said.