Update March 19, Noon, Clarification: BP is not renewing its leases on 257 Southern California gas stations sites leased from Thrifty Oil Co. About 130 are Arco stations. Others operate under the Thrifty brand. Separately, BP said it will divest 770 other Arco-branded gas stations in Southern California. Scott Dean, a BP spokesman, said the company expects the Arco name to be retained on those stations, but that will be left up to the buyer. BP will retain the rights to the ampm brand.



More than 100 Arco gasoline stations will begin disappearing in April and will be replaced by Tesoro-owned USA Gasoline outlets.

BP, which has owned Arco since 2000, is not renewing its leases with Thrifty Oil Co. at 257 station sites, according to a BP statement.

The company has notified its Arco franchisees, who sublet the sites from BP, that they will have to give up their stations as their leases expire over the next two years, according to the station owners. Some franchisees who lease through BP but operate under the Thrifty brand also will be out.

Tesoro said in a statement it will lease 240 of the Arco sites from Thrifty Oil and will phase in the USA stations beginning this year.

The move by BP has set off a firestorm of protest among the 106 Arco franchisees, many of whom own multiple stations and stand to lose their entire investment. About 2,000 Arco workers also will lose their jobs

It also raises questions about what will happen to gasoline prices when Arco, known as the low-price leader, cuts its presence in the market.

The Arco franchisees said they were taken by surprise by BP’s decision not to renew their leases.

“I got my notice in February that I would have to get out April 4, then they extended it a month,” said Issa Demes of Westminster, who owns three Thrifty-branded stations in Los Angeles.

Demes said he has made more than $500,000 in improvements plus inventory at the stations. BP’s decision, he said, will leave him with nothing.

Mike Engel, who owns the Arco station at Harbor Boulevard and Orangewood Avenue in Anaheim said he has two years left on his lease but stands to lose a million dollars from his initial investment and improvements, not to mention the sweat equity.

“And they are just going to give this to somebody else?” he asked.

BP said it doesn’t own the station sites and simply is allowing the leases to expire.

“It is our hope that the independent dealers we used to supply with fuel continue their discussions with the landlord (Thrifty),” BP said in its statement.

The owners, however, said they’ve had no success at reaching Thrifty and have been told Tesoro is bringing in its own people.

Barry Berkett, a Thrifty Oil executive vice president, said the company simply is the landlord and deferred any questions about what happens to the current Arco owners to Tesoro.

Tesoro, via email, did not directly address the fate of the Arco owners.

“Thrifty Oil Co. previously entered into a lease agreement for these stations with BP,” said Thrifty spokeswoman Tina Barbee. “Upon expiration of those agreements, Tesoro will be leasing the stations from Thrifty Oil. Independent contractors called Multi-Site Operators or MSOs will be operating the stations.”

So tell us … Will you miss Arco?

Contact the writer: 714-796-3646 or mmilbourn@ocregister.com