HRP Brings Generational Change to Former Industrial Sites
When most people look at outdated industrial sites, they see nothing but decaying scrap metal and environmental hazards. But what others consider to be a messy urban burden, Hilco Redevelopment Partners (HRP) views as an investment opportunity that also creates the kind of future we all want to be a part of.
The Real Deal sat down with HRP CEO Roberto Perez and CIO Andrew Chused to talk about their firm’s decade-long mission to turn EPA-designated Brownfield sites from albatrosses hanging around the necks of their home cities into environmentally sustainable centerpieces.
The Three Pillars
During the 2008 financial crisis, a wave of industrial assets located in key markets went up for sale at record-low prices. It was at this moment that the team behind HRP realized the opportunity ahead and set its sights on becoming an industry leader in redeveloping brownfields, any previously developed site or property where the transformation process is made more complicated by old structures, legacy contaminants or pollutants.
“The beginning of HRP was the GM/Chrysler bankruptcy when we saw that there were a lot of industrial assets that were located in incredible areas,” Chused tells us. HRP recognized the real estate was there for a reason and identified an opportunity to build a company dedicated to reintegrating these sites back into the community where they could once again serve as an economic engine.
“We formed the company with three pillars in mind,” says Perez. “First is the environment. We remediate on the front end and build with a sustainability standard on the back end.”
The second pillar involves working with the surrounding community, including “talking with everyone from the neighbor next door all the way to the governor and even up to the federal level”, as Perez notes, and working with local employers and stakeholders to ensure that the final product is integrated into its surroundings and meets the needs of the community and future tenants. Through HRP’s community engagement and environmental remediation efforts, these two pillars feed into the final pillar of making jobs economically sustainable – creating new, long-term job opportunities for community members.
Prioritizing best-in-class environmental strategies, community engagement, and local economic development has enabled HRP to unlock the value in these obsolete sites. Chused also says HRP approaches every project by identifying sites with complementary assets, “in some ways it’s the reverse of ‘if you build it they will come.’ The workforce, the infrastructure, the amenities are already all around our projects – we just need to reimagine its use and build what should be there for the future.”
Through HRP’s holistic approach to redevelopment and identifying old industrial sites that have labor and logistics connectivity, they are able to connect the past to a bold new future of economic vitality and opportunity.
Proof of Concept
The first project that HRP developed with these pillars in mind was Sparrows Point, a former steel mill located in Baltimore that was once the largest steel mill in the world.
“When we bought the mill in 2012, everyone was highly skeptical that we were going to take the scrap revenue and leave it,” recalls Chused. “But we had a much different idea.”
The firm started by overseeing the dismantling, remediation, and repositioning of the entire 3,100 acres, implementing a complex remediation plan for the property to allow for future development. Then they started building what would become Tradepoint Atlantic, a global logistics park that makes use of the old steel mill’s dock, as well as the prime industrial location on the southeastern edge of Baltimore. “We started holding job fairs and got some companies to align with us to create new jobs,” says Chused. “The local community and the stakeholders around us really started to see that we were following through on our commitments.”
Today, Tradepoint Atlantic is home to upwards of 12,000 jobs and 10 million plus square feet of new developments that accounts for 1% of Maryland’s GDP, along with robust infrastructure including a deep water port, a short-line railroad that runs throughout the entire site, and external connections to two class I railroads. Tenants include industry leaders like Amazon, FedEx, Home Depot, Under Armour and BMW, all located on a site that, a decade ago, held only a bankrupt steel mill employing a handful of workers.
In the intervening years, HRP has purchased and redeveloped a number of similar industrial sites along the Eastern Seaboard. In 2016, HRP acquired the former Edison Power Plant in the booming South Boston neighborhood and is in the process of redeveloping the 15.2 acre power plant into a mixed-use development on the historic waterfront. Dubbed 776 Summer, the project will be “focused on innovation and sustainability, with housing, retail and hotel space,” says Chused, all centered around four century-old turbine halls that have been preserved throughout the process.
Then in Philadelphia, HRP is in the process of redeveloping what had been the largest oil refinery on the East Coast into The Bellwether District – one of the city’s biggest transformations that will be home to 19,000 jobs and some of the world’s leading businesses in life sciences and logistics – putting the region at the forefront of, e-commerce, pharmaceutical manufacturing, and important medical research that is vital for a 21st Century economy.
A New Generational Project Every Year
Transforming the old into the new on Brownfield sites is a slow process, requiring patience and thoughtful collaboration, but HRP sees its work as a series of investments in the future. “It’s different from what most developers do,” explains Chused. “It’s really about where the world is going, about reincorporating these assets that have been walled off from the communities around them. And it’s an opportunity for tenants to say, ‘I want to be at a site that has a comeback story like this.’”
Perez notes the importance of reimagining and transforming land that once serviced the old economy into meeting the demands of the 21st Century: “At the end of the day, we are a transformation company that focuses on identifying those assets that have significant value in a different economy. And we are now the company that will help transform them into something that benefits the new economy.”
HRP’s focus on unrealized potential in sites and their mission that centers on transformation and sustainability has led to HRP managing some of the most strategic assets in the country. Perez takes pride in where HRP is now compared to where it began, recognizing the holistic approach it takes to make an enduring, positive impact. “From an environmental and community perspective, we are a one-stop solution, a way for companies to offload those assets in a responsible way. We bring change to the cities that we touch.”
To learn more about HRP’s projects, visit https://www.hilcoredev.com/