Posted on: Friday, February 25, 2005
Gasoline retailer to add 20 stations
By Andrew Gomes
Advertiser Staff Writer
Local gasoline distributor and retailer Aloha Petroleum Ltd. plans to add 20 O'ahu stations under a lease agreement that would expand its station operations by more than a third.
Aloha has agreed to lease 20 stations from Dallas-based U.S. Restaurant Properties Inc. in a deal expected to be completed by June, the two companies announced yesterday. The USRP stations are currently operated under the Mahalo brand.
Also as part of the deal, Aloha would acquire USRP's half interest in a Campbell Industrial Park fuel import terminal. Aloha already owns the other half interest, so the deal would make Aloha the sole owner of the terminal, which it also operates.
A value of the transaction, which is subject to Aloha's completing an analysis of the properties and other conditions, was not disclosed.
Consumers will see some changes if the deal is completed as expected. Gas prices aren't expected to differ much, but Aloha expects to convert most of the stations from USRP's Mahalo brand to its own and allow customers to use Aloha's charge card, which gives users a 2-cent discount on fuel purchases.
Bob Maynard, Aloha president, said the acquisition is a chance to increase the company's competitive position in the market.
"We think we provide good value and convenience, and that's what we want to do with these stations," he said.
Aloha operates 47 O'ahu stations associated with the company's Island Mini-Mart convenience stores, as well as 7-Eleven, Fastop and other convenience store brands. Aloha also operates seven locations on the Big Island.
For USRP, the deal lets the company get back to owning but not operating stations. The publicly owned real estate investment trust has been stuck with the O'ahu retail operations for the past few years after two station operators ran into financial trouble.
USRP bought 25 O'ahu Texaco stations and the half interest in the terminal for about $40 million in 1998 as part of a court-ordered sale to satisfy antitrust issues after Texaco and Shell Oil merged.
But the company that USRP selected to lease the stations, B.C. Oil of California, filed for bankruptcy in 2000. A deal to sell or lease the stations to Ho-nolulu-based Lex Brodie's Tire Co. in 2002 fell apart after Lex Brodie's was taken over by a lender at foreclosure.
USRP was able to sell a few of the stations, but was forced to operate most of them.
"This transaction ... allows us to return to our preferred role as landlord supporting our operating tenants," Robert Stetson, USRP chief executive officer, said in a statement.
USRP owns or manages an estimated $500 million in real estate mainly leased to about 800 restaurants and gas station/convenience store operators in 48 states.
Reach Andrew Gomes at 525-8065 or agomes@honoluluadvertiser.com.
