Brownfield Redevelopment: Hurry Up and Wait

An infusion of $21 billion in new federal spending to clean up brownfields and Superfund sites is expected to spur the remediation of hundreds of brownfields in prime industrial locations.

In addition to cleanup, the Infrastructure Investment and Jobs Act will fund infrastructure needed to access brownfield sites, increasing their value for adaptive reuse; the bill, signed into law by President Biden in November, also provides $1.5 billion to scale up community-led brownfield revitalization initiatives.

A recent NAIOP report said the tightness in the supply of industrial space in markets like northern New Jersey and Philadelphia is increasing the willingness of developers to incur the cost of acquiring and cleaning up brownfield sites.

But just because numerous brownfield sites are located in some of the tightest industrial markets in the US, don’t expect brownfield remediation to became a panacea for the shortage of industrial space any time soon.

Years of cleanup may be required before brownfield properties can be redeveloped, and surrounding neighborhoods will need to be convinced that sites have been completely cleaned of toxins before rebuilding begins.

A good case in point for “buyers’ remorse” involving a brownfield remediation project—in this case, call it “neighbors’ remorse”—involves one of the largest brownfield redevelopments in the US, now underway in Philadelphia, where a 1,300-acre shuttered oil refinery is being converted into a site that eventually will house 15M SF to be used as an intermodal logistics facility and a life sciences hub.

The PES refinery complex in Philadelphia is the oldest and largest on the East Coast. Facing the huge cost of cleaning up a legacy of soil and water-table pollution, PES entered bankruptcy in 2018. As it emerged from that process, an explosion and fire in July 2019 led to the complete shutdown of the facility.

Hilco Redevelopment Partners, which bought the PES refinery in 2020, has promoted its development plans for the site, to be known as the Bellwether District, to the South Philadelphia community as a project that will be environmentally safe, sustainable and a boon to the local economy.

But backlash to the project has grown in recent months as the community realized that the demolition and cleanup of the site will take years before any new construction can begin.

Anger swelled earlier this year, when Hilco filed for permits that would let the developer reopen the Schuylkill River Tank farm on the west side of the river while the refinery buildings are cleared from the east side. Hilco said it plans to “maximize” the tank farm, storing and selling hundreds of millions of gallons of petroleum in the tanks while the refinery is being torn down.

Hilco says it will take at least four years to complete the demolition and cleanup of the site, which will include the removal of 100 buildings, an estimated 950 miles of pipe, 850,000 barrels of oil and contaminants including 35,000 tons of asbestos.

Hilco is responsible for the cleanup, which will entail removing toxic soil underneath decommissioned storage tanks where liquid oil leached into the ground. Hilco also plans to use detoxed soil as landfill to raise areas of the waterfront property that risk flooding as sea levels rise in coming years.

Once the site is cleared, Hilco will be required to certify that no vapors or chemicals are present as gas in the ground that could impact on indoor air quality in future buildings on the site. Air monitors picked up levels of carcinogenic benzene three times higher than the EPA’s actionable level at the site in 2020.

The EPA recently launched its Superfund Redevelopment Mapper, a new GIS-based tool to assist developers interested in adaptive reuse projects on land on or near Superfund sites. The tool provides information highlighting site features and “characteristics” of the surrounding area, including the income levels of the people who live there.