The Philadelphia Wholesale Produce Market (PWPM), located at 6700 Essington Avenue in Philadelphia, Pennsylvania, is the largest fully-refrigerated wholesale produce market in the world.
Please provide a brief overview of the project.
The Philadelphia Wholesale Produce Market (PWPM), located at 6700 Essington Avenue in Philadelphia, Pennsylvania, is the largest fully-refrigerated wholesale produce market in the world. Situated on a 48.6-acre brownfield site that was formerly used as an auto salvage, tire disposal facility, scrap yard, and historical waste dump, this state of the art 700,000 sq. ft. facility now provides high quality, fresh produce to customers within a 500-mile radius. The PWPM opened for business on June 5, 2011 and is home to 26 fresh produce merchants. The facility is expected to be an economic boon to the City of Philadelphia and the region. It will retain more than 1,100 direct jobs, create more than 250 new ones and possibly generate $10 billion for the state and city over the next 40 years. It is literally "the world's largest refrigerator."
What makes this project unique? How does it stand out among other successful brownfield redevelopment projects?
The PWPM project is unique because of the public/private partnership developed for funding and because of the facility engineering and construction itself. "This was one of a kind," said Steve Perna. Mr. Perna, of PernaFrederick Commercial Real Estate represented PWPM in the transaction. "The building is a first of its kind in the world, and it's one of the largest public-private ventures in the state." Funding includes $152.5 million in public money, upon which they will earn a return over 40 years, an $11 million low-interest loan, and $7.7 million in Infrastructure and Facilities Improvement Program (IFIP) grant funding over a 10-year period. Built on a brownfield site of limited economic value and perilous environmental quality, the site included nearly a half million abandoned tires and several junk yards. Prior to acquisition by affiliates of the developer, O'Neill Properties Group, the property and its previous owner had been targeted for enforcement action by a joint environmental task force of the City of Philadelphia, US EPA Region III, and the State Department of Environmental Protection.
What were the primary funding sources (i.e. private or public) for the project and what were the total redevelopment costs?
This project is a true example of a public/private partnership. In a deal with the Pennsylvania Infrastructure Investment Authority (PENNVEST) announced in 2008, an $11 million low-interest loan was authorized to help clean up the brownfield site and pave the way for the new center; this loan was in addition to $50 million in private financing and about $165 million in grants (a significant part of which, while a grant, is based on the tax increment created by the new jobs) and subsidies from the state to develop the site. The U.S. Department of Housing and Urban Development (HUD) added a $2 million grant through its Brownfields Economic Development Initiative and a $3 million loan via the Section 108 Loan Guarantee Program. An operating subsidy of $771,000 per year for 10 years will come from Pennsylvania's Department of Community and Economic Development, intended to cover debt service on the senior bank loan and PENNVEST and Housing and Urban Development loans. Title to the land was transferred to the Philadelphia Regional Port Authority. The site developer (O'Neill Properties Group) will lease the land for 40 years and service the $50 million dollar senior loan facility; after construction, the site is subleased to the PWPM. PWPM subsequently leases space to vendors. Total redevelopment costs were $218.5 million.
What contaminants were present on the site? Please discuss what remediation technologies were used and what the total remediation costs were.
Elevated Volatile Organic Compounds (VOCs), Polynuclear Aromatic Hydrocarbons (PAHs), and metals concentrations above potentially applicable statewide clean-up standards were identified in Site soil during the Site Investigation. VOCs that exceeded their respective standards included benzene, toluene, ethylbenzene, and trichloroethene; most of which were organic compounds commonly associated with petroleum fuels. PAHs (naphthalene and benzo(a)pyrene) and metals (cadmium, chromium, and lead) also exceeded cleanup standards in numerous soil samples. In order to remediate the soils, grading and deep dynamic compaction (DDC), of the Site was undertaken, to drive impacted soils into the subsurface and allow for imported fill and capping to minimize the potential for soil exposures. Subsequent to the DDC and grading with clean fill, the site was capped with a combination of asphalt, concrete, new building foundations, and an additional layer of clean fill below landscaped areas; this constructed cap prevents direct contact with contaminants present in the underlying affected subsurface soils. Between July 12 and October 8, 2010, a total of 90,176 tons of soil material was transported off-site for processing and disposal/recycling at a local soil recycling facility; the USS Ronald Reagan (a nuclear-powered aircraft carrier) weighs slightly less at 90,000 tons. Through the additional implementation of engineering controls, the exposure pathway for on-site, direct contact with subsurface soils was rendered incomplete, thereby demonstrating protection of potential future on-site receptors in compliance with the state's voluntary cleanup program. To ensure the protection of human health and the environment, an institutional control applicable to soils (i.e., deed restriction via environmental covenant) was recorded and requires a cap on the Property to remain in place to eliminate exposure to impacted soils. Groundwater.
Groundwater investigations included the installation of six permanent monitoring wells at select Site locations to evaluate groundwater quality beneath the property and to evaluate the potential contribution of Site conditions to degradation of groundwater quality beneath the Site. Along with the sampling of the groundwater monitoring wells, a Fire Protection Well onsite was sampled to investigate potential Site impacts to the deeper aquifer. Samples were analyzed for VOCs, PAHs, and Metals. VOCs were identified that exceeded their respective cleanup standards including benzene, toluene, ethylbenzene, vinyl chloride, methylene chloride, and chlorobenzene; most of which are organic compounds commonly associated with petroleum fuels. Naphthalene (a PAH) and metals (arsenic and selenium) also exceeded their cleanup standards in numerous samples. Sophisticated fate and transport modeling of chemicals in groundwater indicated that chemicals in site groundwater in general and benzene specifically would not migrate beyond the property line from the presumed benzene source areas for more than 30 years, satisfying a key component of state regulatory protocols. Environmental Standards also searched for records of the potential presence of permitted potable or domestic wells in the area. No potable wells were identified during the search indicating that if site-related compounds did migrate beyond property boundaries, no groundwater users would be impacted. The site was deed restricted requiring connection to the municipal water supply to eliminate the groundwater pathway from further possible exposures. Soil Vapors.
Based on environmental investigations at the Site, subsurface soils were known to be impacted with highly elevated concentrations of methane and to a lesser extent, with certain petroleum and chlorinated VOCs. Benzene, cis-1,2-Dichloroethene, and trichloroethene were previously identified at concentrations in soil vapors above state regulatory guidance. To control potential chemical vapor migration into buildings as well as the potential migration of methane, a vapor barrier and venting collection system (vapor mitigation system) was installed beneath the newly constructed buildings, parking lots, and landscaped areas. To ensure the continued operation of the vapor mitigation system at the Site, an environmental covenant was recorded after approval and execution by the state regulatory agency. A detailed analysis of the groundwater sampling results indicated off-site vapor intrusion of chemicals from the site at downgradient properties was not a likely pathway of concern. Ecological Considerations.
Even though the property was located in an intensely industrialized area, the site's enormity included areas of largely-overgrown, poor quality vegetated land. Environmental Standards personnel conducted a comprehensive ecological survey at the Site to characterize habitats present and to evaluate the potential for ecological receptor exposure. No threatened or endangered species, species of concern, exceptional value wetlands, or habitats of concern were identified during the ecological receptor evaluation of the Property; therefore, exposure pathways to ecological receptors were also judged to be incomplete. Materials Management.
As part of the redevelopment process, a commitment was made to manage encountered waste materials using best management practices during site redevelopment. Affected soils encountered onsite were either placed under two feet of clean fill or asphalt or were transported offsite for proper disposal. Surficial debris, tires, and wastes encountered were handled in accordance with the negotiated agreements and appropriate regulatory requirements. Between October 2005 and October 2006, Site debris including, but not limited to, junk cars and car parts, waste tires, large construction debris, and scrap metal were removed from the Site by the property owner as required by the Consent Order & Agreement (CO&A). As part of this waste removal, after the site was vacated and excavation/site prep work began, a total of approximately 1,234 tons of metal debris, 926 tons of garbage, and 400,000 waste tires were removed from the Site for disposal/recycling. In total, more than $4 million was spent remediating the site.
What kind of long-term economic benefits did the project bring to the local community, such as population increase, job creation, tax revenue generation, just to name a few possible benefits?
Long-term economic benefits include job creation and retention and the generation of possibly $10 billion in tax revenue and interest for the state and city over the next 40 years.
How were economic results measured and how swift was the return on investment?
The facility has been open for less than 30 days, and while there are projections as to the expected economic impact, actual financial data is yet to be collected and analyzed.
Was the project completed on time and on budget?
The project was delayed due to many unforeseen circumstances – funding problems form a primary lender occurred when, in late 2008, the financial markets of the US "crashed." This crash put into jeopardy one of the primary private funding sources of the developer for the project. Only through hard work among all project stakeholders was the financing of the project "rescued" and the site development completed.
What was most challenging about your project?
Project financing, in the midst of the global "financial crisis" became difficult and required the development group to create budget and funding approaches that were, at the time, considered to be unique solutions to capital management and acquisition.
Did the project receive any loans, grants or financial assistance from any public or private organizations?
Yes, the project funding includes $152.5 million in public money, upon which they will earn a return over 40 years, an $11 million low-interest loan, and $7.7 million in Infrastructure and Facilities Improvement Program (IFIP) grant funding over a 10-year period.
Could you describe the collaboration that occurred among multiple parties to enable the project?
This project was a true collaboration between many parties – the Commonwealth of Pennsylvania, the City of Philadelphia, the Philadelphia Regional Port Authority, O'Neill Properties Group, US EPA, the Federal Housing And Urban Development Authority. Even local and city-wide civic and community organizations were involved with aspects of the redevelopment including traffic management, during and after construction,. State representatives were important participants in making sure all parties worked together, resolved conflicts and worked towards a common goal. The Mayor of Philadelphia's office as well as the development group's top management worked side by side in a tireless effort to push the project to completion.
What were the number of employees formerly employed at the site prior to abandonment, and primary job classifications at the former enterprise (e.g., mechanics, steelworkers, clerical, etc.)?
The number of employees at the site prior to abandonment is uncertain, but numbered less than 30. These employees were associated with automobile parts recovery and resale operations.
What are the number of employees currently employed at the site?
It will retain more than 1,100 direct jobs (these employees would have been displaced due to the age of the facility that this new project replaced), create more than 250 new jobs for a total employment impact to the region of 1,350 employees.