PES refinery site attracts 3rd suitor: nationwide developer Industrial Realty Group

• Catalina Jaramillo
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  Catalina Jaramillo is a part-time reporter for StateImpact PA. She covers water issues in the Delaware Watershed. She was born and raised in Santiago, Chile, and has written for several publications in Chile, Mexico and the U.S. She’s a graduate of Columbia School of Journalism and has been a Fulbright and Metcalf fellow.

A nationwide real estate development and investment firm with more than 150 properties in 28 states is the third company to express interest in buying the Philadelphia Energy Solutions refinery site in South Philadelphia.

Ryan O’Callaghan of United Steelworkers Local 10-1, which represents about 640 of the now-laid-off refinery workers, said he met with representatives of California-based Industrial Realty Group LLC and the Philadelphia Industrial Development Corp. to discuss IRG’s proposal to add the 1,400-acre refinery site to its portfolio.

“They buy shuttered industrial sites and repurpose them for either what it used to be or warehouses or whatever,” O’Callaghan said, describing Industrial Realty Group’s business model.

Jessica Calter, PIDC’s vice president for strategy, communications and partnerships, confirmed the meeting with Industrial Realty Group and other parties interested in the site. Anne Bovaird Nevins, PIDC’s chief strategy and communications officer, is part of the business committee of the city’s Refinery Advisory Group, and the public-private economic development corporation has been working with the city on the Lower Schuylkill River master plan and is providing expertise on real estate and land use to the group.

In an email, Lauren Crumrine, director of marketing for Industrial Realty Group, said, “IRG has no comment regarding the property.”

IRG’s website says the company specializes in retrofitting commercial and industrial real estate — including military bases and brownfield and Superfund sites — for productive new uses, “solving some of America’s most difficult real estate challenges.” The company then leases the space to tenants, such as Goodyear and General Electric.

Projects featured on the website include a business park offering with 2.3 million square feet of space on a former brownfield site and rubber plant complex in Akron, Ohio; an 8.5 million-square-foot commercial multi-use complex in a former Air Force base in Sacramento, California; and a 450,000-square-foot shopping mall at a former NASA site in Downey, California.

The Downey site was first developed into movie studios. By 2009, film workers claimed they were getting sick after spending time there, but IRG chief executive officer Stuart Lichter and insurance companies rejected any link, the Los Angeles Times reported. IRG’s website says the studios were demolished in 2012 and that further environmental remediation was done at the site.

In February of this year, IRG acquired three industrial properties with logistics, distribution, and manufacturing assets: a 726,292-square-foot complex with 13 commercial buildings near the Columbus, Ohio, international airport; and two properties in Texas, adding 65.7 acres.

Philadelphia Energy Solutions shut down the refinery complex in late June, after a massive fire and explosion damaged parts of the facility. PES entered Chapter 11 bankruptcy in July, for the second time in less than two years.

The city created its Refinery Advisory Group to gather information from different stakeholders, including a business committee to get ideas of how the site could be used in the future. But the site is privately owned, and the city has limited control over it.

Market feasibility studies presented by the business committee earlier this week concluded that the refinery site’s infrastructure and location near major highways, the port, and the airport made it extremely well-suited for manufacturing, logistics, warehousing, and distribution uses.

Two other companies have expressed interest in acquiring the facility: Philadelphia Energy Industries, created by former PES chief executive Phil Rinaldi, whom environmentalists dubbed “Fossil Phil;” and S.G. Preston, a Philadelphia-based biofuels company that an article published Wednesday by the Real News Network called a “Flim Flam” in its headline.

Any sale of the refinery complex would be subject to the approval of U.S. Bankruptcy Court in Wilmington.

“We want to work for anybody who can have the same amount of employment or even expand that,” the United Steelworkers’ O’Callaghan said.

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