South Philly refinery site owner wants more Keystone Opportunity Zone tax breaks

The owner of the sprawling 1,300-acre former refinery site in South Philadelphia — known as the Bellwether District — is seeking an extension of generous tax breaks on the property.

The Keystone Opportunity Zone (KOZ) program already covers the site but will expire in 2033. The development plans, which include dozens of buildings, extend over decades, and HRP Group (formerly known as Hilco Redevelopment Partners) wants to lock in public benefits for the long term.

The KOZ program exempts certain geographic areas from most state and local tax obligations. It was created in the 1990s to spur development in disinvested areas and properties.

At a City Council Committee on Finance hearing Tuesday afternoon, HRP Group argued that a 10-year extension is essential for the success of their project and will enable the developer to demolish the 211-acre Schuylkill River Tank Farm, which contains 40 derelict fuel storage facilities and four miles of pipeline on the west side of the river.

“This extension will offset the significant demolition cost of the Schuylkill River Tank Farm, which our company pledges to decommission if this extension is granted,” said Amelia Chasse Alcivar, executive vice president of corporate affairs with HRP Group. It “will enable us to move forward with the removal of … the last remaining fossil fuel infrastructure on land that we own.”

Over the past four years, HRP Group dismantled the refinery site on the east side of the river. This cleared the way for a proposed 14 large warehouses on the three-quarters of the site below West Passyunk Avenue and a planned 40 smaller life sciences and manufacturing buildings on the northern fourth of the site.

A project of this scale and ambition is seen as transformational for South Philadelphia, attracting billions in investment and creating thousands of permanent jobs.

The Commerce Department spoke in favor of the extension bill at the Finance Committee hearing, which was introduced by Council President Kenyatta Johnson. It also received an outpouring of support from building trades union leaders including the carpenters, electricians, laborers, and steamfitters. The city’s construction unions have long boosted HRP’s efforts, underlining the company’s projection that their redevelopment will generate 28,000 construction jobs.

“The Bellwether District redevelopment is a generational opportunity for the trades in Philadelphia,” said Telia Allmond, the pre-apprenticeship coordinator with IBEW Local 98. “This project provides jobs for our members as well as training and growth opportunities.”

But support of the bill was not unanimous. A variety of community and environmental groups have been negotiating with HRP Group over a community benefits agreement since 2023 and are frustrated with the results so far.

A source close to the negotiations said that as of this summer, the company had been offering $100,000 a year into a grant fund that neighborhood groups could apply to — and that the agreement would not necessarily be legally binding.

“The coalition simply asks that City Council, prior to taking any vote to extend these significant tax breaks which take money directly from the Philadelphia school system as well as other deserving public programs, ensure that HRP is delivering concrete benefits to, and investments in, the surrounding neighborhoods,” read a letter of opposition submitted to City Council by the United South/Southwest Coalition for Healthy Communities.

At the hearing, groups including neighborhood organizations from Point Breeze and Philly Thrive spoke against approval of the bill for now.

Tiffany Green of Concerned Citizens of Point Breeze compared HRP’s offering unfavorably to the community benefit agreement that Mayor Cherelle L. Parker is negotiating with the Philadelphia 76ers for the arena proposed in Center City, inaccurately stating that $50 million was going to community groups in Chinatown that have been opposing that project. (The CBA with the Sixers would include $50 million for a variety of initiatives and groups.)

“If you can guarantee $50 million community benefit agreement for the Asian community … we feel that the Black communities that surround this property should be equivalent to that,” Green said. “That comes down to equal treatment for all.”

Despite opposition from some community groups, the bill was passed by City Council’s Finance Committee unanimously. Chasse Alcivar of HRP, meanwhile, told The Inquirer that the terms of the CBA were in the “final stages.”

City Council could pass the bill as soon as next week, after which it would need to be voted on by the Philadelphia School Board. Then the city will need to apply to the state Department of Community & Economic Development for final approval. The bill also extends a KOZ around the Rhoads Industries facility, a maritime manufacturer, in the Navy Yard.

Over the course of its existence, the KOZ program has been critiqued by many civic and education groups for its application to sites in University City and Center City, which didn’t seem to fit a program meant to revitalize blighted areas.

But even some longtime foes of the program’s use in more established markets say the former refinery site is an example of the kind of project that the program was designed for.

“If there was any utility to a KOZ, it’s in a spot like that,” said Jeff Hornstein, executive director of the Economy League of Greater Philadelphia and a longtime critic of the broader use of the KOZ program. “And they’re not going to be able to market the site if it’s not a KOZ, so I’m for it.”