HRP Group wants the Port of Philadelphia to expand into 300 acres of the 1,300-acre Bellwether District, a move that would expand the port's capacity and take advantage of the development's vast available land at the former oil refinery site in South Philadelphia.
Chicago-based HRP Group has set aside land west of the Schuylkill River for the port to use if ongoing conversations lead to a formal partnership. While high-level discussions have taken place between HRP Group and PhilaPort, details of a potential port expansion at the Bellwether District are still to be determined.
Ed Henderson, senior director of business development and planning at PhilaPort, said several options could be explored for a partnership. Those include HRP Group leasing land or warehouse space to PhilaPort, selling land to the port, leasing space to the port for sublease to its users, or leasing directly to port users for storage and handling services.
PhilaPort's new master plan, expected to be released in the next few weeks, will call for collaboration with adjacent property owners.
The 300 acres eyed for PhilaPort sits across the Schuylkill River from 1,000 acres HRP owns where a logistics campus is being planned in addition to space for the life sciences industry.
Taking space at the massive Bellwether District development would allow port users to store more cargo nearby rather than move products to warehouses spread out across the region. That creates a logistical advantage for companies using the Port of Philadelphia, making it more attractive to handle shipments, Henderson said. More robust operations at the port would in turn help HRP Group as it looks to lease the millions of square feet of warehouse space it will soon start to deliver on the site.
“If you have real estate for that product to move from the port into real estate to get either assembled, sorted, staged and redistributed, then you can handle more cargo through the port,” HRP Group CEO Roberto Perez said at the Business Journal’s recent State of the Mega Project event.
Construction at the Bellwether District is underway with the first 325,659-square-foot industrial building on track to be completed by the end of this year. HRP Group plans to break ground on a second industrial building spanning 727,272 square feet in the next few months, planned to be completed by the third quarter of 2025.
Sam Carlen Visuals
The $4 billion Bellwether District is planned to take 10 to 15 years to build with between 10 million and 12 million square feet at its logistics campus and 3 million to 5 million square feet at its innovation campus, catering to the life sciences industry.
The project’s goal is for Philadelphia to compete regionally and attract business from elsewhere, Perez said.
PhilaPort, already the largest refrigerated port in the country, has been looking to expand for years. In 2022, the port identified $3.5 billion worth of capital projects to help it stay competitive on the national stage.
Having expansive warehousing space just minutes away at the Bellwether District would simplify the process for companies currently trucking cargo to facilities as far away as the Lehigh Valley and Central New Jersey, which have boomed as last-mile distribution hubs in recent years.
“You're taking steps out of supply chain,” Perez said. “You're being very efficient with how product is moved. I know everybody talks about Lehigh Valley, Central Jersey, you really should not anymore. This should be where you look first, and then you can look elsewhere.”
PhilaPort's Henderson said any concrete plans with the Bellwether District are likely still a year or two away, but a potential large-scale expansion is something that interests both parties.
When the port has looked to expand its capacity in recent years, Henderson said it often focuses in 5- or 10-acre increments.
“So when [HRP Group] mentions anywhere between 95 and 300 acres, that’s a big deal to us,” he said. “That would substantially improve our footprint. That’s what gets us excited.”
Hilco Redevelopment Partners
HRP Group orchestrated an arrangement near Baltimore on a former 3,300-acre Bethlehem Steel site, now known as Tradepoint Atlantic, where the firm was a part of team that developed new warehouse space. The partnership gave the port, which had long been geographically constrained, the ability to expand and increase capacity. Containerized cargo can now be trucked 7 miles from the Port of Baltimore to the site.
The Bellwether District is less than 5 miles from the Port of Philadelphia.
In recent years, PhilaPort set the goal of increasing its warehouse capacity by 18%. The port has plans for a 277,200-square-foot storage, warehouse and logistics building at 3060 S. 61st St. by the Schuylkill River and a new 100,000-square-foot warehouse at the Tioga Marine Terminal.
By partnering with the Bellwether District and other nearby sites, PhilaPort can add capacity without taking up space on its own property. Available space in proximity is a major factor in attracting shipping business to the port. Henderson said it “does a lot to either secure those lines will stay in Philadelphia or it could induce new lines that call Philadelphia.”
Henderson characterized the talks thus far with HRP Group as “what if?” conversations.
“Would we develop the land? Would we incentivize private operators to come down there?” Henderson said. “It's been conceptual, but I think both agree that we're heading down a path where both our plans will converge.”
Henderson pointed to the ports of New York, Baltimore and Norfolk, Virginia, as Philadelphia’s top competition. There’s a lot of cargo that could be shipped from each of those places to the Midwest via truck, he said. The key, in Henderson’s eyes, is creating strong enough logistical advantages so Philadelphia emerges as a place companies feel they need to have a presence.
“We think in order to be successful you're going to need more real estate, right?” Perez said. “Which is why the Port of New York is so successful. When you look at all the successful ports, they need to be next to industrial campuses that can support those investments.”
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