Hilco Redevelopment Partners: Reimagining a complex site to transform a community’s future
CDPQ and HRP began their relationship in 2019, when CDPQ acquired a minority stake of HRP’s parent company, Hilco Global, an authority on asset valuation, monetization, advisory, and solutions. Together, they target investments in special situations, including transitioning existing assets, such as The Bellwether District.
This flagship project is emblematic of HRP’s mission: to invest in redevelopment sites across the United States in a way that will have a positive long-term impact, focusing on its three core pillars of community, environmental and economic sustainability. It also fits with CDPQ’s focus to invest constructive capital over the long term. A project that will help build a more sustainable economy, make a positive contribution to communities, while delivering good returns for investors, is putting capital to use where it has a real impact on people’s lives.
Transitioning from the old to the new economy
Decommissioning such a vast site in an urban environment, after 150 years as a refinery, is an epic undertaking—the pipelines alone, if laid end to end, would stretch from Philadelphia to Florida. Its strategic location near the airport, port, and city centre, however, makes the project a unique opportunity to play a driving role in the next chapter of Philadelphia’s economic development.
For HRP, there were no illusions about the scale of the challenge, nor the ultimate value of The Bellwether District. “For us, success is to create something that can have a lasting impact in the city and beyond,” says Roberto Perez, CEO of HRP. “We own, not just a building, but an entire district spanning six zip codes. It is a significant platform to create positive change. This is one of the most strategic redevelopment efforts east of the Mississippi and the whole region will be able to draw from it. We can do much more than reshape the city’s skyline—we can help Philadelphia compete on a national scale.”
HRP’s focus will soon turn to securing anchor tenants as the first buildings will be delivered in late 2023. They are sparing no effort to ensure the site will support tenants in a sustainable manner. The project will be elevated above the 100-year flood plain, above what is required by code for the purpose of climate resiliency. HRP is also taking steps to develop and recruit the workforce from the community by establishing training opportunities for residents, both through in-house programs and partnerships with local institutions.
It is a significant platform to create positive change. This is one of the most strategic redevelopment efforts east of the Mississippi and the whole region will be able to draw from it.
“We want to create a more sustainable, economic ecosystem with multiple tenants, in multiple sectors, while making a difference in the community and giving people a chance to succeed,” comments Roberto Perez.
“We couldn’t do this without CDPQ’s support,” adds Roberto Perez. “To us, they are more than an investor—we view them as a partner. From the time CDPQ came on board, they’ve shown that they ‘get’ the project. We share the same values and principles, and we’re exploring several other opportunities together. With The Bellwether District, we’re just getting started.”
The right partner to support a long-term vision
“As CDPQ is increasing its portfolio assets with more sustainable energies, but also going a step beyond, and supporting companies’ efforts to improve their environmental footprint, this project was a great fit for us, both financially and philosophically,” notes Josée Lévesque, Senior Director, Capital Solutions. “We really like that HRP is passionate about all that they do, and in particular, building projects with a lasting impact. As a key strategic advisor, our role is to support the realization of their vision.”
“A large-scale project such as this one is not an easy endeavour and we understand it involves many complexities. Not only will it generate good risk-adjusted returns for CDPQ’s clients, but it will also provide benefits for the local community.”
“We really like that HRP is passionate about all that they do, and in particular, building projects with a lasting impact. As a key strategic advisor, our role is to support the realization of their vision.”
For CDPQ, HRP’s commitment to people was also a very influential factor. The Bellwether District’s impact on the local community will be massive. This includes generating an estimated 19,000 permanent jobs and driving substantial new investment and economic growth in Philadelphia—one of America’s biggest cities, but also one of its poorest per capita. HRP has also developed an internship program for recent graduates and people interested in accessing trades industry jobs with sustainable wages.
“We are very fortunate to support HRP’s great team and to have the opportunity to be involved in such a transformational project. It is a unique and remarkable journey,” concludes Josée Lévesque.
Transforming the real estate market
In March 2022, The Bellwether District received an inaugural CoStarTM Impact Award for Best Financing Transaction in Philadelphia. CoStar Impact Awards recognize transformational commercial real estate transactions and projects with significant influence in neighborhoods or submarkets across 11 major U.S. markets.