A bidding war is set for a former refinery in South Philadelphia, despite worrying environmental challenges at the 1,300-acre property.
At least 15 parties have shown interest in buying all or part of the former Philadelphia Energy Solutions refinery, shuttered in June after an explosion set off a fire that ripped through the facility, according to the New York Times.
The soil is contaminated from 150 years of refining and is currently under remediation, but the site is also vulnerable to flooding from the Schuylkill River. Those issues are “not insurmountable,” said Newmark Knight Frank’s J. Eustace Wolfington. Its location on the Schuylkill River and access to highways, rail, and waterway freight make it attractive to buyers.
“It could be industrial, retail, residential, office,” he said. “The real estate possibilities are endless.”
Drexel University real estate economist Kevin Gillen said those environmental issues limit mixed-use development, but that the site’s size and access to transportation make it suitable for a logistics center. Investors are pouring more money into the logistics segment with the rise of e-commerce.
Philadelphia Energy Solutions filed for bankruptcy earlier this year. Bankruptcy court judge Kevin Gross set an auction date of Jan. 17 for the company’s assets.
One interested party, Philadelphia Energy Industries, wants to restart the refinery, produce renewable diesel, and place solar cells on site. That could face opposition from nearby residents, who blame the refinery for elevated levels of asthma and other illnesses in surrounding communities.
The City of Philadelphia said in November any future use “should protect public health, be economically beneficial and establish ‘openness, transparency and trust.’” [NYT] — Dennis Lynch