A sprawling maze of smokestacks and steel tanks near one of the country’s busiest ports represents a chance for developers to test what a 21st-century industrial campus might look like when designed from scratch.
A proposed redevelopment aims to replace 406 acres of petroleum-refining operations and a neighboring propane storage facility at the Phillips 66 refinery in Los Angeles with millions of square feet of modern industrial space backed by a neighborhood-facing corridor of grocers, restaurants, sports facilities and greenways.
The proposal is the latest example of how former fuel facilities are being repurposed into more profitable uses in coastal regions across the nation. It also represents a rare opportunity to develop one of the largest parcels of available land near the country’s second-most populous city.
Developers are pitching the project, which could take as long as 20 years to complete, as a transformation of one of the South Bay’s last heavy-oil landscapes into a master-planned hub of goods movement and recreation.
If approved, the project would rank among the largest brownfield conversions in California history. Los Angeles City Council member Tim McOsker, whose district includes the Wilmington site, said the development “marks the end of one story in Wilmington’s industrial era, but opens the door to exciting opportunities for new jobs, improved air quality, and innovative economic benefits in the years to come.”
Beyond the sheer scale, it points to a shift in how developers are conceiving industrial land: not just as boxes for goods storage, but as mixed-use complexes stitched into surrounding communities with retail, recreation and green buffers.
“What’s so significant is the confluence of port-related communities with both business and residential needs — and trying to serve both,” said Avison Young Principal Patrick Barnes, who specializes in sales of industrial properties across Southern California. “The port case is a no-brainer. The question is whether the retail can be successful alongside it.”
Even before those potential operational headwinds, developers will need to work through various challenges involved in repurposing a refinery site into a safe real estate hub for workers and residents. They include cleaning contaminants from soil and groundwater and conducting extensive environmental impact reviews. But the firms behind the project, Catellus Development and Deca, have experience in environmentally challenging redevelopments in the state.
Mixed-use makeover
Plans kicked off last year when oil giant Phillips 66 hired Catellus Development and Deca to provide advice on a redevelopment for its Los Angeles Refinery complex that includes the 406-acre Wilmington site and a neighboring 228-acre site in Carson.
The connected sites, stretching five miles, will close by year’s end amid long-term market concerns that demand for petroleum products will decline.
The Catellus-Deca partnership has filed plans with the city for what it calls the Five Points Union Specific Plan. The proposal seeks sweeping land use changes before construction can begin.
“The project will transform an aging and environmentally intensive oil refinery use into a modern logistics center,” the filing states, “while incorporating community-serving retail, recreation, and open space uses along the Anaheim Street corridor.”
The proposed plans for the Wilmington site will divide the property at 1660 W. Anaheim St. into two districts: a commercial and recreation strip along Anaheim Street featuring grocers, cafés, sports courts and greenways; and a southern logistics zone with next-generation warehouses.
The project footprint covers three parcels: the 410-acre refinery site, a 10-acre vacant lot north of Anaheim Street and a 20-acre propane and butane storage yard. To ease community concerns, the blueprint calls for new freeway connections and landscaped buffers to route truck traffic away from homes.
No plans have been announced yet for the site at 1520 E. Sepulveda Blvd. in Carson, five miles north of the port. But its location — surrounded by other refineries and port container yards — may be best suited for redevelopment into industrial logistics use, real estate brokers say. Carson is also a separate city, bringing a different set of officials and regulations into the mix there.
A template for the future
Repurposing former oil fields is becoming more common in coastal cities as operators abandon them for various reasons.
Catellus redeveloped the 200-acre former Pacific Refinery Co. near San Francisco into a residential subdivision called Victoria by the Bay in 2003, a process that involved the removal of contaminants. In Huntington Beach, the Magnolia Tank Farm redevelopment is moving ahead with new housing and open space.
And in Philadelphia, Hilco Redevelopment Partners is converting the 1,300-acre Energy Solutions refinery into a 14 million-square-foot logistics campus.
Meanwhile, developers are adding amenities to industrial complexes across the country to compete for workers and appease residents who might otherwise organize against warehouse development. Cities are often amenable because pairing logistics with retail from restaurants to services can support residents and bolster city sales-tax revenue, a gap pure industrial property doesn’t fill, Barnes added.
“Cities don’t get much tax revenue from industrial beyond property tax,” Barnes said. “Sales tax is a big driver — so bringing retail with the industrial makes sense for the city and the surrounding community.”
For example, the 200-acre mixed-use Goodman Commerce Center in Eastvale, California, mixes millions of square feet of logistics facilities — leased to retail giants like Amazon — with stores and services that have made the warehouses more attractive to tenants at a time of steep competition for industrial labor and real estate.
Across the country, in Burlington Township, New Jersey, development team Clarion Partners and MRP Industrial are transforming the 1980s-built “dead mall” Burlington Center into The Crossings, a $600 million industrial-led mixed-use district that is already partially open at 2501 Mount Holly Rd.
The project has three warehouses totaling more than 2.5 million square feet with tenants including Walmart and Maersk, while new retail pads have opened with Raising Cane’s, Panera Bread and SleepNumber. Construction is also underway on a 500-unit apartment complex and a 153-room hotel, extending the site’s transformation into one of the East Coast’s most prominent industrial-retail hybrids.
Los Angeles logistics
The Wilmington redevelopment marks a significant new warehouse project in Los Angeles, where much of the logistics space has come from recycled warehouses and second-generation industrial property.
This project marks a rare opportunity to build ground-up facilities on hundreds of acres near the nation’s busiest port complex. Concentrating modern facilities closer to dense population cuts miles for distributors, making them an attractive last-mile option for tenants, according to Barnes.
“The site’s strategic position alongside the port could be ideal for importers and national retailers, limiting exposure to transportation costs, which typically far exceed real estate costs,” said Jesse Gundersheim, CoStar senior director of market analytics. “A ground-up logistics hub of this scale is a once-in-a-generation opportunity for Southern California’s industrial market.”
Only about 5% of the region’s industrial property has been built in the past decade, far below the national rate of 18%, according to CoStar data. New construction has been largely offset by demolitions, meaning supply has barely expanded even as port volumes remain near record highs.
“Building a modern logistics base here can let older, antiquated industrial sites elsewhere be re-gentrified for higher and better uses — housing, parks, retail — without taking away from the region’s industrial needs," Barnes said.
The redevelopment of the Phillips 66 refineries provides inspiration for other toxic sites across the country that require remediation, Barnes added.
"On sensitive sites like this, cleanup and liability can be deal-killers if you don’t have confidence in the plan,” Barnes said.
Phillips 66 is responsible for removing the toxins and said in SEC filings that “asbestos abatement” and “decommissioning of assets” at its Los Angeles property would cost $231 million.
Public officials have vowed to ensure “a thorough cleanup, and an inclusive, beneficial redevelopment of the site,” McOsker said. “It’s crucial that this property remains an important economic driver for our district, benefiting both our environment and our local workforce.”