Michael Lindquist, who has owned at 210 Danbury Road since 1996, says a tangled web of regional gasoline industry contract and pricing disputes is threatening him and dozens of other CT gas station owners with the sudden end to their established businesses. Facing threats of imminent eviction or closure, the local business owners are trying to do everything in their power to prevent that from happening.
“I can’t say that it’s very promising at this point in time. Some of us are working on exit strategies. Some of us are still hopeful that we’re going to make a deal. I hope we can make a deal—I’ve been here for 15 years! It’s been pandemonium,” Lindquist said.
According to Lindquist, for several years stations like his have paid rent to a fuel distributor that supplies their product, handles credit card processing and operates under a national brand mark—in this case, BP (British Petroleum)—as a condition of their rent contracts. That distributor has paid rent to a company called Getty Petroleum Marketing, Inc. (GPMI), which in turn paid rent to Getty Realty, the owner of the actual buildings, pumps, canopies and equipment.
Now, because the two companies in the middle have declared bankruptcy, Getty Realty has attempted to proceed with eviction of the station owners—by force of U.S. Marshalls, if necessary—pushing the local business operators in a fight for survival. As Michael J. Fox, executive director of the Gasoline and Automotive Service Dealers of America, (GASDA) described, “If this goes through we will lose 63 independent business people. It’s a really, really tough situation.”
Longstanding equilibrium took a sudden downturn
In the 15 years since Lindquist has been running his Wilton-based business, GPMI has changed hands several times. During that time, even with multiple owners and landlords, as well as changing regulations and state laws over the years, the long-time business owner has been able to keep his profit margins steady.
But as Lindquist described, that status quo started to change last year when GPMI filed for bankruptcy after failing to pay rent two times. Complicating matters, his distributor (Green Valley Oil) also stopped paying rent and was sporadically unable to supply the stations with gasoline to sell, even while he and his fellow local gas station operators continued to make their rent payments on time.
“They were still drafting everybody’s rent, we were still paying for all our gas, but Green Valley just stopped paying [GPMI].”
As a result, says Lindquist, his 15-year old business faced sudden, severe cash-flow problems.
“In March, I typically pump 90,000 to-100,000 gallons. Because of the shortages, this past March I pumped 52,000 gallons of gas. It shrunk my margins to about 8- or 9-cents per gallon. You do the math, you can see how much I was short in revenue. I’m making less than $5,000 where I used to make $10-$12,000. My rent is $8,600 a month. It’s $3,000 a week to pay my people, on top of the rent. There is the repair shop, but the first quarter of this year in the repair shop is off, business is just not what it was.”
The small guys fight back
In March, 63 state gas station owners banded together as the United Dealers of CT, with the help of their trade association, GASDA. They went to court to be able to buy directly from alternative gasoline suppliers, arguing that they should be released from their existing restrictive fuel supply contracts binding them to GPMI and Green Valley.
“This is what has taken us aback—we’ve dealt with Green Valley a little over three years and there was never any mention, they didn’t say anything, they just continued pretending to do business as usual,” said Lindquist.
After learning that Green Valley received an extension through April to continue operating, the group of station owners took a drastic move, according to Lindquist.
“We made a decision as a group, based on not being able to get fuel, Green Valley was going to be out of business on or before the 30th of April, our fuel supply was all but cut off, it wasn’t going to get any better. And on or after the 30th we were not going to be able to get fuel from anybody, because we didn’t have a lease or a contract. That’s when we decided to de-brand. We basically cut ties with Green Valley Oil, we covered up all our signs, and we started buying fuel [elsewhere].”
Indeed, every BP logo, sign and branding was covered up, down to the logo patches on employees’ shirts, which they covered with black duct tape. But covering logos was one thing; finding and affording services usually supplied by Green Valley were another.
“Our [customers’] credit cards were processed through Green Valley, so we had to shut that off. Everybody had to then scramble to find credit card processing. It’s taken a while to get that to happen, I just recently got my pay at the pump working again, and so we’re trying to stay in business and survive,” Lindquist explained.
Eviction threats and intimidation: “That’s not American!”
For Lindquist and GASDA, the first few weeks of May were marked by court motions, negotiations and a new contract offer from Getty Realty, along with an ultimatum for the station owners: either sign leases with a new middleman fuel supplier, Chestnut Petroleum, or face eviction.
“The threats, the intimidation, I have never seen anything like this in 24 years of business,” said GASDA’s Fox. “They threatened to physically remove people, to handcuff, to arrest them. They want to use taxpayer dollars by using U.S. Marshalls to evict us. It’s got to be wrong—that’s not American.”
Wilton’s Lindquist called the offer from Chestnut ‘draconian’ and ‘one-sided,’ saying they would limit his profits by setting much lower commission-only prices.
“The other problem,” he said, “is they haven’t stipulated what the rent is going to be. My assumption is it’s going to be higher than I’m paying now. So from a business standpoint, how do you cut your profits by more than half, and pay more rent at the same time, in an economic time where we are all struggling? We are trying to show good faith, because we want to stay here, we want to do a good job for whoever the new distributor is. But we don’t want to be slaves to anyone, is what it comes down to.”
As of last week, with the intervention of a GASD-hired bankruptcy attorney it seemed that local owners had won a short reprieve, staving off eviction after Getty Realty withdrew a court motion to remove them. According to trade industry reports, Getty Realty backed down from its plan after U.S. Senator Richard Blumenthal (D-Conn.) started looking into the station owners’ interests.
Sen. Blumenthal—who helped craft legislation protecting gas station owners’ rights when he was the state’s Attorney General—was aware and concerned about the present situation between Getty Realty and the small business owners, according to his office.
That concern was a factor, said the GASDA’s Fox, in helping block Getty Realty’s eviction move. “They wanted to use power, and they lost.”
Buying time—and hope
For now, this reprieve means that proceedings will move to CT State Housing Court, which buys the local station owners much needed time. They plan to meet with local legislators, including Congressman Jim Himes, and according to both Fox and Lindquist, to hopefully sit down with Getty Realty or Chestnut and work out a long-term rent deal that’s equitable.
But for local station owners, they hope the communities see them as locally-owned small businesses in need of support. Lindquist said he is wants to appeal to Wilton residents, just as his fellow business owners are doing in their own towns.
“Buy gas. That’s the easiest thing to do is to buy gas," he said. "I think I’m priced competitively, if they could buy gas from me that would help immensely, short term. Of course the repair shop is welcome to anybody and everybody, that would help more. But the easiest thing to do is to buy a tank of gas.”