News Coverage ARIZONA DAILY STAR –Published: June 20, 2006
OIL GIANT BP SELLING OFF MOST OF THE CITY'S am/pm's
SPIFFED-UP STATIONS COMING SOON
By Joseph Barrios
Tucson, Arizona – The next time you're lured into an am/pm store with a sign saying "Free hot dog with bucket-sized soft drink," look for the sign that says "new owner."
BP West Coast Products LLC, the petroleum giant whose local presence you may associate with filling up your gas tank or buying lottery tickets,
is in the process of selling off 33 properties in Arizona, including seven here. The portfolio is being sold off piecemeal,
with seven of 10 stores in Tucson either sold or under contract.
Consumers are likely to see spiffed-up stores with new pumps in the near future. For the new owners, it's a chance to increase
business and put profits in their pocket. The sale of dozens and dozens of Arco am/pm stores across the country is being handled by
NRC Realty Advisors LLC in Chicago. Sales include 20-year franchise deals and fuel-supply agreements from BP.
Tajinder Singh and his family paid more than $1.6 million for the am/pm stores at 2800 N. Oracle Road and 2790 W.
Ruthrauff Road, where he ran the stores before buying the properties.
When Singh's family started arriving in Arizona from India in the late 1970s, they worked in several restaurants.
Already owning the franchise rights, Singh said, he thought buying the properties here was a great business opportunity.
"They want to take money from little people and put it in their refineries," Singh said. "We're franchise people.
We work hard. We expand the business."
Tucson native Russell Scaramella, who was once a Famous Sam's franchise owner in Phoenix, paid more than $5 million
for four of the properties here and is in the process of buying more convenience stores in the state.
Scaramella said one of the conditions of sale was that the new owners agree to refurbish the stores with new gas
pumps and new interiors over the next year as part of an effort to shine up the chain's image.
Although BP officials did not return calls seeking comment, a news release last year from NRC said BP continually
assesses "whether the company should continue to own any specific site."
"Within any given market there are sites that no longer make sense for BP to own, but may offer excellent
opportunities" for franchise owners, according to the release.
Owning a gas station instead of other retail properties makes sense to some investors, said Mark Gilliland,
a broker with Marcus & Millichap – Tucson.
Gilliland said he has a client looking to buy a convenience store because it offers more for cash flow than appreciation.
Some gas stations come with corporate guarantees saying that even if the store closed, the corporation would continue to pay some portion of the lease.
"They (buyers) don't want the income stream to be interrupted. The strength of the guarantee is everything to them," Gilliland said.
Plus, you get all the fountain drinks you can handle.
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