Industry experts say anywhere from 5% to 18% of stations won't be legally selling gas on Jan. 1, according to a report in the Palm Beach Post. The state law, which took effect in 1990, is aimed at protecting the state's groundwater supply from pollution.[image-nocss]
The deadline won't be enforced at facilities where owners have a binding contract and complete the upgrade by March 31, Bill Burns, environmental administrator at the DEP, told the newspaper.
For station owners such as brothers Ralph and Steve Amodie, who operate Florida Gardens Sunoco in suburban Lake Worth, Fla., the roughly $300,000 tank replacement being completed this month is a big expense.
"We all knew this was coming 10 years ago, but nobody wanted to believe it," Steve Amodie told the newspaper. "You will see places that will not reopen the first of the year."
The deadline comes at a time when it's tough to make a profit because of rising credit-card fees, insurance, increased shoplifting and theft, and even people buying fewer sodas.
By early December, about 85% of the state's 8,814 gas stations had the work completed, Burns said. That left 1,397 not yet verified as upgraded.
"This is not as good as we hoped it would be," Burns said. "We think a lot of it has to do with the economy. We thought we would have 90% to 95% compliance."
Beginning Jan. 4, the DEP plans a sweep of stations to check those not known to have upgraded their tanks. The state could levy fines of up to $10,000 per violation, and ultimately a court could order a station to shut off its pumps.
"We will seek whatever means necessary to get them into compliance," Burns said.
If the work is not completed, under way or under contract by the deadline, tanks must be drained, the report states. The operator has two years to remove them, Burns said.
Pat Moricca, president of the Gasoline Retailers Association of Florida in Longwood, Fla., predicts that after Dec. 31, fuel suppliers won't deliver to stations lacking double-walled tanks for fear they will jeopardize their companies, the newspaper reported.
Difficulties in obtaining financing also are preventing some from getting the upgrades, and loans of $100,000 to $300,000 don't make sense for marginal stations.
"The credit criteria and general credit freeze is really impacting the customer's ability to borrow money," Len Baccaro, vice president of American Equipment Finance LLC in Warren, N.J., told the newspaper. "All the credit criteria for small-business owners has gone through the roof. You have to be in business at least four years, maybe five, with a personal credit score of at least 700.
"In addition, the current administration has not been able to convince, order or require the banks to lend."
Baccaro estimates he has helped obtain financing, mostly through refinanced mortgages, for about 25 of the 100 or so Florida station owners who contacted him. The others didn't qualify or lacked the cash flow, the newspaper reported.
Although it won't be known until April 1 how many stores will no longer pump gas, the smaller operations in rural areas will be most likely to close, Jim Smith, president and CEO of the Florida Petroleum Marketers & Convenience Store Association in Tallahassee, told the newspaper.
"I would assume some are going to close. I don't believe it will be a significant number," Smith said. "The smaller operators have been unable to borrow money. There is nothing available."
As the deadline nears, Boynton Beach-based Petrofuse LLC, a company that installs state-approved double-walled liner systems to existing tanks, has been bombarded with calls.
"Today alone I got three calls to quote sites for people," Roger Rolewicz, Petrofuse's vice president of sales, said on a recent morning. "They have been procrastinating."
The bottom line is that more stations will go out of business and be up for sale, an opportunity for some other, larger retailers.
"Everybody is watching these places, waiting until the blood is in the water," Derek Hickam, sales and marketing director at Surge Solutions Group Inc., a West Palm Beach-based contractor, told the newspaper. "They will get them for pennies. Then they will get their upgrades and sell fuel. This void will be filled again."
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