Company to make railcars in S. Phila.

A South Korean firm will build railcars for SEPTA and other transit agencies in a 290,000-square-foot building in South Philadelphia, creating about 300 jobs.

Rotem USA Corp., a division of Hyundai Motors Group, had previously planned to build the cars in a former warehouse at the nearby Navy Yard. The new site is bigger and will require less refurbishing, officials said. Rotem will spend about $10 million to improve the site, the company said.

The lease, announced yesterday by developer Rimas Properties, is for 20 years, and the plant will house Rotem's U.S. headquarters and employ about 300 workers on an 11.5-acre site on Weccacoe Avenue between Snyder and Oregon Avenues.

Rotem and Sojitz Corp., a Japanese company, have formed a consortium to build 120 Silverliner V regional railcars for SEPTA for $274 million. The first cars are to be delivered to SEPTA in December 2008, and all 120 will be completed by June 2010.

The plant also will build 121 bi-level railcars for Southern California Regional Rail Authority's Metrolink commuter rail service. The company said it was pursuing contracts with other U.S. transit agencies.

SEPTA's new cars will replace 73 railcars that were built for the transit authority in the 1960s. SEPTA's overcrowded rail fleet has about 350 cars; with the retirement of the old cars and the addition of the new ones, the agency will have about 400 by 2010.

Regional rail service, which carries about 110,000 passengers a day, has seen SEPTA's largest ridership growth in recent years, rising 17 percent since 2000. Ridership is projected to continue to grow at 3.5 percent a year.

The railcars will be assembled at the South Philadelphia plant from components brought in from around the world.

The car shells will be fabricated in South Korea, the wheels and trucks in Pennsylvania and Ohio, and the seats in China, said Patrick Nowakowski, chief operations officer for SEPTA.

The property lease was arranged by Patrick Green, executive vice president, and associate Mike Mullen of the Philadelphia office of the commercial real estate firm CB Richard Ellis Group Inc.

"As Philadelphia residents ourselves, we felt that it was critically important to secure 300 new jobs here in the city," Sammy Benakoume, president of Rimas Properties, said in a statement.