PSEG Power yesterday announced it has sold its shuttered coal plant sites in Jersey City and Hamilton to a Chicago-based developer, which plans to redevelop them as modern industrial parks.
Hilco Redevelopment Partners acquired the Hudson Generating Station, a 241-acre site in Jersey City, and Mercer Generating Station, a 132-acre property from the subsidiary of Newark-based Public Service Enterprise Group. Terms of the deal were not disclosed.
The two plants, once mainstays of PSEG’s fleet of power plants, were, unable to compete with cheaper natural-gas units that have come to dominate energy markets in recent years.
After reviewing more than two dozen proposals, PSEG selected HRP based on its strong environmental track record and success in managing complex redevelopment projects. The company has a track record of converting former coal facilities into redevelopments, most recently in Boston and Chicago.
HRP envisions redeveloping the sites as state-of-the-art industrial parks to serve the growing need for regional warehouse-distribution hubs in central and northern New Jersey. “That’s the likely scenario,’’ said Gary Epstein, executive vice president of Hilco Global, the owner of HRP.
“Our goal with every redevelopment project is to return economic vitality to these dormant sites, giving them a new purpose and generating strategic opportunities,’’ said HRP CEO Roberto Perez. The two sites offer opportunities to remake underutilized land into modern industrial parks in one of the strongest regions in the country for warehouse-distribution centers, he said.
Both sites will likely require some type of environmental cleanup. PSEG Power has retained a consultant to look at potential problems at the Hudson site, according to Larry Hajna, a spokesman for the state Department of Environmental Protection. There are remediation plans for both sites, added Michael Jennings, a spokesman for PSEG.
Epstein said the company does not anticipate any environmental issues. “We’ve done a number of sites like this,’’ he said.
In Boston, HRP purchased a former coal plant operated by the Exelon Corp. It is in the process of converting the site into a multi-phase mixed-use redevelopment, including residential, hotel, office and retail components. In Chicago, it acquired a coal plant from NRG with a plan to redevelop it into a huge warehouse and distribution center.
“From our experience, we’re looking at 18-24 months on the short end’’ for redevelopment of the New Jersey sites, Epstein said.
John Paul Cowan, a senior president of operations for PSEG Fossil, said his company sought out a buyer that recognized the strategic value of both locations. “HRP has a track record of success taking on both the remediation of these types of industrial facilities and, most importantly, redeveloping them into economic engines for the people who live in and around the sites,’’ he said.
Jersey City is excited about “repurposing these antiquated power sites that we had lobbied PSEG to close,’’ said Ashley Manz, a spokeswoman for the city. “It is great for the city to attract another national developer.’’
Hamilton Township Mayor Kelly Yaede said the company has met with local officials and told them it planned to build a regional warehouse-distribution hub on the site. “It fits into our vision of clean ratables,’’ the mayor said.