Cranes frame the Philadelphia skyline at the ceremonial groundbreaking of the Bellwether District at the former PES Refinery site in South Philadelphia in October 2023. (Kimberly Paynter/WHYY)

A massive stretch of land southwest of Center City is being transformed from an industrial wasteland into a bustling commercial and industrial complex with upwards of 19,000 workers. That’s what the developers are saying, anyway.

Construction has begun at the Bellwether District, a 1,300-acre property slated to become an industrial logistics complex — think giant warehouses and lots of trucks — and life sciences campus. 

The $4 billion project is expected to take 10 to 15 years to fully build out.

The redevelopment is a major historical inflection point for neighborhoods in South and Southwest Philadelphia, the city, and the country. For about 150 years, the property was one of the nation’s biggest and most productive oil refineries, and in recent years was Philly’s top source of air pollution.

As recently as four and half years ago, it was still a working refinery, having weathered a planned closure in 2012 that resulted in a new owner taking over.

But in 2019 the facility was rocked by a huge explosion that caused a fire and released thousands of pounds of toxic chemicals into the air. 

While the city avoided a potential health disaster, the owner subsequently closed the plant for good, bringing cheers from environmental activists. The closure resulted in around 1,000 jobs lost, while paving the way for a new kind of development that could end up hosting many more than that. 

Here’s what to know about the giant project, how we got here, and what’s expected in the future.

What will the Bellwether District contain?

Right now it’s a gigantic, town-sized patch of environmentally remediated dirt, but eventually it’s going to be two commercial campuses. One will be a 750-acre, sprawling expanse of low warehouses with hundreds of truck bays, and the other a 250-acre office and light-industrial park for drug companies and other life sciences firms.

The larger, southern portion will be the logistics campus, housing 10.5 million square feet of building space in perhaps 16 huge buildings, according to site owner Hilco Redevelopment Partners. 

By early 2025 the company expects to finish the first two buildings, totaling over a million square feet, with nearly 200 tractor-trailer loading docks between them. They’ll be sited along 26th Street south of Passyunk Avenue, on the property’s eastern side.

Next year Hilco will also start building the northern portion, a hub for manufacturing and research and development, near Grays Ferry. It’s slated to have 3.5 million square feet at full build-out, with a first phase comprising 480,000 square feet in three buildings.

Hilco claims more than 19,000 people will work on the property overall once everything is built and occupied by commercial tenants, perhaps a decade from now. There would be 8,500 employees in the life sciences area and 10,500 in the logistics complex.

The development will have a new grid of tree-lined roads and separated bikes lanes, and for the first time will allow access to a previously off-limit stretch of the Schuylkill Banks. 34th Street will be extended through the property, and the site will be connected to the Schuylkill River Trail.  

A rendering of the imagined future Bellwether District. (Hilco Redevelopment Partners)

How’d the site end up like this?

Due in part to the presence of rail lanes to ship in crude oil, one of the earliest U.S. refineries opened on the Schuylkill River in 1865, a bit north of the current land. Five years later it relocated to Point Breeze. 

By 1882, nearly 3,000 people worked for Atlantic Refining Company there, producing over 100 million gallons of oil a year, according to a Hidden City history of the property. Gulf Oil operated a facility nearby and in 1920 moved to a big plot at Girard Point, south of Atlantic’s facility.

There were numerous fires, explosions, and accidents at the refineries over the decades, including one in 1975 that killed eight city firefighters.

Chevron bought the Gulf parcel in 1982. Sunoco purchased the Atlantic refinery in 1988, and in 1994 bought the neighboring land from Chevron and consolidated the two facilities. The combined plant was the biggest refinery on the East Coast.

Fracked oil? Nope, a giant explosion

By 2011, a surge of cheap oil from shale fracking was creating tough competition for Sunoco’s business of refining foreign oil, and the company said it would sell its refineries. 

With an important regional gasoline supplier and some 850 jobs at risk of being lost, then-U.S. Rep. Bob Brady lobbied to save the plant with White House support. D.C. investment firm Carlyle Group bought a big stake and created Philadelphia Energy Solutions to bring shale oil in by rail for refining into gas and other products.

PES executives had big plans to build a controversial new pipeline to bring in even more fracked oil, but their dreams were shattered in June 2019.

Early in the morning, a faulty old pipe ruptured and spilled highly combustible hydrocarbons mixed with a dangerous chemical. It caused a massive explosion, sending a 19-ton metal drum flying across the Schuylkill and sparking a huge fire. An estimated 3,271 pounds of the deadly substance hydrofluoric acid was released into the atmosphere.

A week later, Philadelphia Energy Solutions CEO Mark Smith said the refinery would be permanently shut down. The fire “made it impossible” to keep the plant open, he said.

Philadelphia Energy Solutions on August 8, 2019. (Bastiaan Slabbers for WHYY)

Leaving the energy business behind

PES went into bankruptcy and the refinery was purchased for $226 million by Hilco Redevelopment Partners, a unit of Illinois-based Hilco Global. The company had previously remediated and redeveloped old industrial sites in Baltimore and Alexandria, Virginia, and it is redeveloping two former coal sites in north and central New Jersey.

“Not having a refinery there ends a long environmental justice travesty and puts Philadelphia on the right side of energy history,” said Mark Allan Hughes, director of the University of Pennsylvania’s Kleinman Center for Energy Policy and head of the city Refinery Advisory Group’s environmental committee.

A key part of the deal was a 10-year extension of a Keystone Opportunity Zone designation for 70% of the property. KOZ designation exempts businesses in those areas from most state and local taxes. At the same time, Hilco agreed to make payments in lieu of taxes, or PILOTs, to compensate the city and school district for lost real estate tax revenue.

The company also committed to recruiting local workers using diversity and inclusion goals as a guide and, along with an entity overseeing the property’s rehabilitation, to spending up to $500 million on environmental remediation.

Remediation efforts at the former PES Refinery site underway at the future home of the Bellwether District. (Kimberly Paynter/WHYY)

Continued fears of contamination

The deal faced resistance from community members and activists over the tax breaks and Hilco’s remediation plan, which buried heavily contaminated soil under buildings, parking lots, and driveways rather than removing it from the site.

The environmental group Philly Thrive noted that Hilco was criticized in Chicago after it demolished an old coal plant and sent a cloud of dust over a working-class Latino neighborhood, and later when it did a similar demolition in Jersey City.

Removal of oil and over 100 buildings, 950 miles of pipeline, and other equipment proceeded quickly after Hilco took over the property. But the company did not remove a tank farm it inherited in Southwest Philly where some oil was still being stored, alarming nearby residents who wanted the facility shut down.

Some community members have also faulted Hilco for not doing more to monitor and prevent the release of carcinogens like benzene, which they blame for causing clusters of cancers and other illness in adjoining neighborhoods when the refinery was operating. 

While the company says it measures multiple volatile organic compounds (VOCs) at the site, at a community meeting in August many attendees said Hilco should monitor benzene separately.

Expect ongoing debate about the remaining contamination and the tank farm, which Hilco could theoretically continue to market as an oil storage facility in the future.

Meir Rinde is an investigative reporter at Billy Penn covering topics ranging from politics and government to history and pop culture. He’s previously written for PlanPhilly, Shelterforce, NJ Spotlight,...