Station closures fueled by costs
By: John Upton
Examiner Staff Writer
March 25, 2009
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| Pain at the pump: This gas station at Geary Boulevard and Funston Street is among a handful in San Francisco that have shut down. There are currently about 110 left. (Cindy Chew/The Examiner) |
SAN FRANCISCO — Gas stations are disappearing from The City as high operating costs and pricey renovations force closures.
There were 151 filling stations in San Francisco in the early 1990s when concerned lawmakers created rules governing demolitions, in an effort to control their systematic closures. Today, there are about 110 stations left in The City, according to Planning Department data.
On top of the nearly 30 percent drop, The City has received five permit applications since 2007 to demolish stations, department records show.
Running a gas station in San Francisco — where land costs are high, space is limited, labor is expensive and oil companies charge the highest prices — is harder than in any other California city, according to Dennis DeCota, a Marin station owner and executive director of the California Service Station and Automotive Repair Association.
Statewide, demand for gas is falling, environmental costs are rising and oil companies are squeezing greater profits out of retailers, according to DeCota.
“It’s a real hard time for petroleum retailers,” he said.
A San Francisco gas station typically sells 100,000 gallons of fuel a month for 12 to 20 cents per gallon more than it costs to buy, according to DeCota. That works out to roughly $200,000 a year in margins before bills, lease payments and workers are paid.
Gas stations that have closed in recent years include ones along Van Ness Avenue and Howard, Valencia and Lombard streets.
The next to shut might be the Union 76 at Market and Buchanan streets, in an area that was recently rezoned under The City’s Market and Octavia plan to promote higher-density housing.
“I’m closing at the end of the month,” owner Wisfe Aish said. “Then, the bleeding stops.”
Aish said he owns gas stations from Turlock to Salinas, but the hardest place to do business is San Francisco.
“We have a great Muni system,” he said.
By closing this month, Aish will also save on state-mandated environmental upgrades required next month. The pricey work, $11,000 or more per pump, aims to reduce vapors released through gasoline nozzles.
Shutting the doors at stations, however, does not mean owners are in the clear. Oil companies generally have contracts with gas-station owners that require payments in the event of closure.
And while some stations close, others are waiting for a better economy to shut down operations.
Richmond district gas stations at 25th Avenue and California Street and at Geary Boulevard and Stanyan Street are slated to be replaced with new homes, but developer John McInerney said the owners plan to operate at losses until the economy improves enough for construction to begin.
Make way for a ... parking lot
A 115-unit condo building is set to rise 85 feet above the site of a soon-to-be-shuttered gas station in the Upper Market neighborhood. But until the economy perks up, the site will serve simply as an extravagant parking lot for City CarShare customers.
The project site — which is currently home to a Union 76 gas station at the corner of Market and Buchanan streets — is in the middle of a neighborhood that was rezoned last year to encourage the construction of new homes.
But the rezoning was finalized as the economy soured, credit markets tightened and construction work stalled statewide, meaning the area’s vacant lots remain empty.
Eventually, as is often the case for land vacated by struggling or closed gas stations, the plan is to clean up the site for a new building that will include below-ground parking, ground-floor businesses and plenty of condominiums.
Two nearby Market Street gas stations are also slated to eventually be demolished to make way for housing.
Developer Brian Spiers said he does not know when construction of the new units will begin, but hopes the economy recovers enough to allow building in 2011.
“It’s a really good, high-density urban-infill project on underutilized gas-station land,” he said.
Spiers said he has been working with city staff to tweak plans and reduce the amount of parking spaces, in response to a parking cap implemented by lawmakers during the rezoning process.
Until construction begins, the land will continue to be used for CarShare parking, according to Spiers.
What will become of shuttered gas stations?
Sample of proposals filed in recent years to replace gas stations:
Market and Buchanan streets: Eight-story building with 115 units
Market and Castro streets: Retail and residential building with 24 units
Market and 15th streets: Six-story combined retail and residential building with 60 units
Valencia and 20th streets: Residential building with 18 units
South Van Ness Avenue and 19th Street: Five-story combined commercial, residential and retail building
Geary Boulevard and Stanyan Street: Four-story residential building with 13 units
Ocean and Miramar avenues: Four-story combined commercial and residential building
Portola Drive and Fowler Avenue: 10,000-square-foot Walgreens store
Source: Planning Department
