Independent gas stations continue to decline in Tucson

This story was completed for my Advanced Reporting class

Only a few cacti protect the former Alvernon Self-Serve gas station on the corner of South Alvernon Way and East 27th Street because the chain-link fence was taken down some time ago.

The decaying sign with three fuel grade options out on the street still attempts to beckon potential customers driving down South Alvernon Way, while the former shop nestled between the gas pumps suffers from graffiti covered walls and a shattered window. It’s been like this for about four years. Just a few hundred feet down the road, a steady stream of cars pulls into and out of the modern, standard-type QuikTrip.

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This is a microcosm of what’s happening across Tucson and across the country. Larger service station chains are pushing smaller, independent franchises out of business, said Jerry Bustamante, senior vice president for public policy at the Arizona Small Business Association. Bustamante said the model developed by the larger chains, such as QuikTrip and Costco, is difficult for independent franchises to compete with.

“Their business model is, ‘We’re going to sell you among the cheapest gas town, we’re not going to make a ton of money on the gas, but we’re hoping that you’re going to come inside our convenience store and you’re going to buy coffee, soda, snacks or fresh deli,’” Bustamante said. “That’s where they make their money.”

In Tucson alone, there are 17 QuikTrips and 95 Circle Ks, according to their websites.

Ryan Egan, the realtor for the Alvernon Self-Serve property, said the independent service station couldn’t compete with the rise of the large chains like QuikTrip and Circle K and the owner sold Alvernon Self-Serve and three other gas stations spread across Tucson four years ago to Egan’s realty group.

For Egan, none of the properties have been easy to sell – especially the property on South Alvernon Way.

“Alvernon [Self-Serve] is out-positioned,” Egan said. “There’s a QuikTrip across the street and they’re always going to be able to sell gas for less than an operator at the Alvernon property.”

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The larger chains rely more on profits from sales inside the larger convenience stores they build and much less so on the gas that draws customers in the first place, said Ashley Langer, an assistant professor of economics at the University of Arizona.

These larger, regional chains are pushing independent gas stations out for other reasons as well, she said.

The total number of gas stations across the country is actually declining, Sanger said, in some part to due to rising fuel economy standards, which means drivers don’t have to fill up their gas tanks as often as they used to. This allows consumers to have more of a chance to shop around for lower-priced gasoline.

Sanger said the situation with rising gas station chains in unlike the rise of Walmart, because there are many more competitors among gas station chains. Companies like Circle K and QuikTrip are also just regional brands to the West.

“It’s just the free market reacting to a change in the situation and a change to what people need,” Sanger said.

Bustamante said ASBA advises its members to shop locally to keep more money in the community, but in the end it’s a free market and every customer gets to make their choice.

As more chain link fences rise up around former Tucson gas stations, the issue of what to do with the properties raises another issue.

Egan said he hopes he can sell the Alvernon Self-Serve property to be converted into another use.

Though, this is an expensive and time-consuming process, said Drew Sanderford, an assistant professor of real estate and planning at the UA.

In the course of time a gas station occupies a property, there will almost certainly be a leak from the station’s underground storage tanks, Sanderford said. The Environmental Protection Agency must be able to certify that the ground at the gas station is no longer contaminated for the property to be put in use again, which requires an underground clean-up process.

“This is an expensive proposition for just a regular person who wants to buy this land,” he said.

The EPA does offer some support for redevelopment of land that has been contaminated, such as gas stations.

Egan said it’s more of a psychological issue for potential buyers.

“[Gas stations] are perceived as being higher risk properties – and they are,” he said, “but if you have the proper expertise and contractor to perform the work for you, they can deliver you a property that can be certified as non-contaminated.”

Egan said that even if someone would want the property to be a gas station, the Alvernon location is too small to fit a convenience store to make it competitive against the larger chains.

The price of owning the property for four years now has been difficult, Egan said. It costs $200 to $500 a month to repaint the graffiti that regularly accumulates on the Alvernon Self-Serve property.

Currently no one is interested in buying the Alvernon Self-Serve, but Egan remains optimistic that another buyer will come along soon.

“There was someone interested in the Alvernon property about a month ago,” he said, “but the property wasn’t big for their concept so that fell through.”

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