Lowell Sun: Gas Dealers Protest Plan to Sell Stations

By Matt Murphy
05/17/2009

BOSTON — Local gasoline dealers, mainly for ExxonMobil, worry that their parent company’s plan to sell gas stations in the state to third-party distributors could threaten local ownership and jeopardize years of hard work and investment.

With few options left, the dealers are now turning to Beacon Hill looking for help so that they might have the opportunity to buy their local gas stations and keep business ownership in the community.

“History has shown us that when a station is sold to an outside dealer many of them go out of business within the next two to three years. Many of these guys worked these many years thinking they would be able to buy their station for their retirement. All we’re asking the state to do is give these guys the right to buy the property. We’re not asking ExxonMobil to take a penny less,” said Paul O’Connell, executive director of the New England Service Station and Automotive Repair Association, a non-profit trade group based in Billerica.

O’Connell, of Leominster, has owned and operated Lunenburg Gulf for 16 years, so he knows the hard work that many local dealers have put into their business and now worry about losing.

ExxonMobil, Shell and Conoco-Phillips plan to sell retail locations in the Northeast to focus on oil exploration, drilling and refining.

ExxonMobil want to sell 75 to 125 stations at a time to large third-party distributors, so that it can package under-performing stations with more lucrative businesses, leaving local dealers out of the mix.

Sen. Jamie Eldridge, D-Acton, has filed a bill that would give local station operators right of first refusal to purchase their station from the parent company, if and when it’s to be sold. The bill had a hearing this week that brought dozens of local gas dealers to the Statehouse.

“We’re just trying to provide an opportunity to those local dealers who have put in years of hard work to buy their business,” said Eldridge, a member of the Joint Committee for Community Development and Small Business. “If you have third parties entering from out of state, I would suggest that not only would service go down, but their would be a monopoly on gas prices.”

Eldridge said competitive local gas pricing will also be better for local consumers.

While local dealers worry that new property owners would have to increase rents and product prices to pay off debts from their initial purchase, advocates for the oil companies say the legislation would unfairly take away the rights of the companies like ExxonMobil to sell to whomever they wish.

“It really provides a right that never existed when the contracts were first signed and negotiated, and we would argue it takes away more rights than it provides,” said Steve Dodge, associate director of the Massachusetts Petroleum Council.

Dodge said distributors might be unwilling to buy blocks of stations if current leaseholders are allowed to “cherry-pick” the profitable stations and leave the company with undesirable properties.

“The value of a station might be more if sold as a group than it would be if it were sold individually,” Dodge said.

Other states have passed laws similar to the Eldridge bill, including California and Washington. A bill is also winding its way through the New Jersey Legislature. Connecticut law offers the right to buy to the leaseholder if the station changes hands a second time.

John Sergeant, who operates Tewksbury Mobil on Andover Street near River Road on the Lowell line, said there is no question he would buy his station if given the opportunity.

Sergeant operated a Shell station in Littleton for 13 years. He said he switched to ExxonMobil after that company doubled his rent one day, from $7,000 a month to $14,000 a month on one day. He thought he was getting a partner in ExxonMobil, but said he now feels abandoned.

“When I bought this business, I did it knowing I would be dealing with ExxonMobil. Now you don’t know who you’re going to be dealing with,” Sergeant said. “We’re just trying to protect our investment here. All these years and I might walk away with nothing but the shirt on my back?”

Rep. Thomas Golden, D-Lowell, serves on the small business committee in the Legislature with Eldridge and said he hopes the legislation passes this year.

“When you think about it, these guys have spent years growing a business and if they match dollar for dollar what some small conglomerate is willing to pay then why not grow these small local business,” said Rep. Thomas Golden, D-Lowell, who sits on the Committee for Community Development and Small Business.

“There is no way I’m siding with big oil when it comes to small businesses. I know the guys in our area who own the small stations and they’re involved in giving back to the community,” Golden said.