New rules driving gas stations out of business

Some of Long Island's gas stations are drying up - shutting off their pumps, removing their tanks and selling their property. Others are scrambling to avoid hefty fines by installing new underground gasoline tanks that meet their county's regulations.

Suffolk County in the late 1980s and Nassau in 2008 enacted mandates for all single-wall gas tanks to be replaced with double-wall fiberglass tanks that are less susceptible to leaks.

Both counties set a deadline of January 2010 for many tanks. Suffolk granted some extensions until May. In Nassau, tanks installed after Jan. 1, 1979, have to come out within a year of their 30th anniversary of installation.

Gas station sites dwindling

There are 1,060 gas stations across Long Island - 542 in Suffolk County and 518 in Nassau County - and the Long Island Gasoline Retailers Association says it has witnessed the dwindling numbers of stations. "Within the last two years we have lost approximately 10 percent of our membership per year," said Kathryn Odessa, executive director of LIGRA, a nonprofit trade organization for service station and repair shop owners since 1931. It now has 800 members.

"LIGRA supports the mandates, but the regulations have put many shops over the edge," said Kevin Beyer, LIGRA's president. Tank replacement costs range from $150,000 to $300,000 per tank in addition to lost profits during construction, which averages six to 10 weeks, according to Beyer.

"Many waited until the last minute; they put off the stress of construction, were banking on extensions, and were evaluating the investment," said Beyer, 47, of Huntington, an independent owner of Performance Fuels in Smithtown. "But then the economy went bad and it was impossible to get financing, so many were forced to close." Twelve facilities closed in Suffolk for all reasons between November 2009 and March 2010. A number for Nassau County was not available.

Installing new tanks was not a viable option for the Sunoco station in business since 1946 on Merrick Road in Seaford. "We were a true mom and pop station," said Jerry Pastore, 52, of Baldwin, who owned the station with his wife since 1991. "Everyone is cutting corners, and we didn't make the cut." The station's tanks were removed, and the couple is now operating a repair shop on the property.

Stations weighing options

Some stations are choosing to remove their tanks and sell the property to retail chains such as Dunkin' Donuts or 7-Eleven. A gas station at the corner of Route 110 and Ruland Road in Melville became a 7-Eleven earlier this year, for example.

"My perception is that the gas business stinks right now, so owners don't want to make further investments," said Kenneth Schuckman, vice president of Schuckman Reality Inc. of Woodbury, a retail real estate broker that has handled multiple gas station conversions. "So now they are looking for alternatives."

Facilities that had not complied with Suffolk County's regulations by May were fined a quarter of a cent per gallon per day. For a 10,000-gallon tank, the charge equals $25 per day. Fines increased Aug. 1; in addition to the previous fine, a station will be fined $1,000 per tank per month, regardless of size. Fines will increase in November to $2,000 per tank and again in January to $500 per tank per day, said Christopher Lubicich of the Suffolk County Department of Health. Sixty-one facilities in Suffolk County have not complied. In Nassau County potential penalties include misdemeanor charges with a fine of up to $1,000 or up to one year in jail for an individual and a fine of up to $5,000 for a corporation, according to John Priest, supervisor of the Nassau County Fire Marshal's Office.

How the new tanks work

The double-wall gasoline tanks now required by county regulations consist of an inner tank surrounded by an outer wall. The space separating the inner tank from the outer wall is designed to contain leaks. In the event of a leak, there is an alarm system, according to Kevin Beyer, president of the Long Island Gasoline Retailers Association, a nonprofit trade organization and advocate for service station and repair shop owners since 1931.

The changes in the gasoline tank regulations were not state mandated and are more stringent than rules from the state's Department of Environmental Conservation's to protect Long Island's aquifer, the DEC said.

- KAITLYN DEFOTO