Philadelphia school board rejects tax breaks for new owner of PES refinery, jeopardizing redevelopment

By KYW Newsradio 1060
PHILADELPHIA (KYW Newsradio) — The Philadelphia school board has rejected a plan to give generous tax cuts to the company that is redeveloping the site of the former Philadelphia Energy Solutions refinery in Southwest Philadelphia, which was destroyed by an explosion and fire last summer.

It’s an unusual move for the board, and a setback for the company.

The board — and before that, the School Reform Commission — has largely been a rubber stamp for the administration and City Council when it comes to approving Keystone Opportunity Zones, or KOZs, in which all state and city taxes are excused as an incentive to build in undesirable areas.

Board members have even approved KOZs for projects in the city’s fastest-growing neighborhoods when asked, much to the chagrin of advocates for better school funding.

However, three members drew a line at the new refinery owner, Hilco. One of them, Angela McIver, said the company does not have a good record of delivering the benefits they promise.

“Hilco has been a bad partner in other cities,” she said.

Hilco Vice President Jeremy Gray denied that, and explained the KOZ is crucial to a massive project and would create thousands of jobs.

“It’s acreage is 2% of the City of Philadelphia. My understanding is the last person who actually put forth a project of this magnitude from a master planning perspective was William Penn in 1682,” he said.

City Commerce Director Sylvie Gallier-Howard said the loss of revenue would be made up by new earnings in the wage tax.

“The district would receive more than it would have received, and you will receive less if this does not become a KOZ,” she added.

Four members voted in favor, three voted “no,” and one abstained — but five “yes” votes are needed to approve it. 

Education advocates applaud the board’s move, as they have long felt the school board is too quick to authorize city recommendations on KOZs.

It’s especially unusual, though, that this particular project should become the precedent, since the former refinery site is the sort of area KOZs were designed for: undesirable for development — in this case, a brownfield — where incentives are needed to spur reuse.

City officials say they’re disappointed with the decision, and they will address board members’ concerns and resubmit the request, though the deadline for approval is Oct. 1.