Politicians Take Up Cause of Getty Operators

Urge Getty Realty, distributors to negotiate better terms with stations to avoid strike

Domenic M. Recchia Jr.

NEW YORK -- Seeking to avoid a strike by hundreds of gas station operators, politicians have intervened in a dispute between Getty gasoline distributors and the station operators, who are fighting for higher compensation, reported The Wall Street Journal.

U.S. Representative Jerrold Nadler (D-N.Y.), who represents parts of Manhattan and Brooklyn, sent a letter to Getty Realty Corp.--the landlord for hundreds of Getty stations--and four of Getty's gasoline distributors, urging the companies to negotiate better terms with operators.

The biggest grievance of the operators: the 6.5 cents commission they earn on each gallon of gasoline they sell has not changed in 15 years and is not enough, they say, to cover basic expenses like rent, licensing permits and wages. The operators are asking that their commissions be raised to 15 cents for each gallon sold. They also want their leases extended to three to five years rather than the month-to-month terms that began last year.

"The stagnation in their compensation has placed these businesses, many of which are small and family-owned, at a crippling disadvantage with their competitors who receive 15 and 35 cents per gallon from other dealers," said the March 6 letter cited by the newspaper. State Senator Diane Savino (D), Assemblyman Matthew Titone (D) and City Council members Domenic M. Recchia Jr. (D) and Debi Rose (D), also signed the letter.

Recchia said that if the distributors do not meet with the operators soon, he will consider seeking ways to force the businesses to the negotiating table.

"The big oil companies [are] taking advantage of the little mom-and-pop gas station owners who work day in and day out selling gas and are not being compensated," Recchia, who represents southern Brooklyn, told the Journal.

Earlier this month, the Getty operators in New York, New Jersey and Pennsylvania staged a three-day strike during which they refused to sell gasoline in protest of their commission and short lease terms. They called off the strike on the request from politicians who feared the strikes would lead to the type of fuel shortages that occurred during superstorm Sandy.

In response, some operators said some of the distributors threatened to evict them, although the politicians have asked the distributors to suspend any possible evictions.

The Petroleum Dealers Group Inc., a trade association in Staten Island that represents more than 400 Getty stations, told the paper that the stations operate at a loss of about $100 a day compared with an average profit of $300 a day for operators of Shell and Mobil stations. Also, the operators said they pay out of pocket for property repairs that they say are supposed to be shouldered by the landlords.

Getty Realty, a real-estate investment trust (REIT) based in Jericho, N.Y., that owns more than 900 stations, did not return calls from the Journal seeking comment. It was formed in 1997 when Getty Petroleum Corp. split; Getty Petroleum was eventually rebranded as Getty Petroleum Marketing Inc. (GPMI), which leased the stations from Getty Realty, then subleased them out to operators and distributed fuel to the stations.

GPMI filed for bankruptcy in 2011. Since then, Getty Realty has replaced its former tenant with several new distributors who sublet to the small operators. Lease terms for the station operators became month-to-month during the bankruptcy restructuring.

One distributor, BP Petroleum, said in a written statement provided to the paper that "BP made good faith offers of rents and commissions to the lessee dealers." Global Partners LP declined to comment and the other distributors--Lehigh Gas Partners and Ramoco Fuels--did not return calls from the Journal for comment.

Louis Lombardo, a spokesperson for the Petroleum Dealers Group, told the paper that the situation for the Getty operators has become dire. Small operators that have managed their stations for decades "could lose everything," he said.

"If there is a good reason why they can't increase the commission, I think the operators ... are entitled to know what that reason is," Titone told the paper. He said that, so far, they have received no response from Getty or the distributors.