As Gasoline Retailers Struggle, Donuts Drive Profits

The BP station on West Main Street in Riverhead, which may be demolished and rebuilt.
The BP station on West Main Street in Riverhead, which may be demolished and rebuilt with a larger convenience store and donut counter.

As new environmental regulations and the dwindling markup on sky-high gasoline prices eat into gasoline retailers’ profit margins, many gas stations across the East End have already turned to their mini marts to try to generate a little extra cash.

The British Petroleum station on West Main Street in Riverhead is the latest gas station here to try to alter its business model. Under new ownership since last year, they’re petitioning the Riverhead Town Board for a special permit to demolish the 1,230-square-foot gas station and its six pumps, and rebuild a 1,800-square-foot convenience store with a Dunkin’ Donuts counter. The new gas station will have just four pumps, three of which will be under a canopy.

Attorney Keith Brown of Melville, who represents gas station owner Atlantis Mart, told the town board at a public hearing on the application Tuesday that the gas retail industry “is undergoing a complete shift.”

He said the Long Island Gas Retailers Association has lost 20 percent of its membership since 2005, and the membership continues to decline today.

“The margins on gas are very small,” he said.

Cars don’t need as much maintenance as they once did, he added, and more people are having their cars maintained at dealerships. The service station side of gas stations is a thing of the past.

Compounding those problems is the recent Suffolk County law that required all gas stations here to upgrade their underground gasoline tanks to tanks with double walls, which costs around $350,000, he said.

The West Main Street BP station is in good shape as far as tanks go, said Mr. Brown. There are already three relatively new, 10,000 gallon fiberglass double-walled tanks underground there.

Mr. Brown said the new building will have dark sky compliant LED light fixtures and will clean up a property that currently has little curb appeal. The new building will be white with two signs, one reading “Atlantis Fresh Market” and another for the Dunkin’ Donuts.

He said the applicants have already received variances for the signs and for a setback of just over 23 feet from the rear lot line. The code requires the building to be 50 feet from the lot line, but Mr. Brown said pushing it back further would help with the traffic flow through the site.

Robbie Hartmann of the Long Island Cauliflower Association, whose office is on Marcy Avenue behind the gas station, asked the town board if the gas station’s variance would make it more difficult for LICA to build closer to their property line next door.

Town Supervisor Sean Walter said the gas station’s variance would set a precedent that would actually make it easier for LICA to get a variance in the future.

Board members seemed to view the plan favorably.

“You’re upgrading that area,” said Councilman John Dunleavy.

Mr. Walter said he’d like to see West Main Street redeveloped. He’d also like to see something done with the empty blacktopped lot next door to the gas station where Riverhead’s post office annex had once stood.

“It’s a free for all going on in there right now,” he said.

Atlantis Mart’s engineer, Matthew Welch, said about 15,000 cars currently drive past the BP station every day.

“That’s a lot of donuts,” said Councilman George Gabrielsen.

Mr. Brown said his clients hope to break ground on the project as soon as all their permits are in place.

The hearing will be held open for written comment until March 14.

 

Beth Young

Beth Young has been covering the East End since the 1990s. In her spare time, she runs around the block, tinkers with bicycles, tries not to drown in the Peconic Bay and hopes to grow the perfect tomato. You can send her a message at editor@eastendbeacon.com

One thought on “As Gasoline Retailers Struggle, Donuts Drive Profits

  • March 5, 2014 at 10:49 am
    Permalink

    To avoid the gasoline price rip-off, plug your Tesla S electric car into your household, solar array.

    Reply

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