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B.C. Oil averts
eviction with new deal
It secures a partner and negotiates
By Russ Lynch
a rent-reduction plan with the
Texas-based owner of 17
Arco gas stations on Oahu
Star-BulletinB.C. Oil, the California company that operates 17 Arco gas stations on Oahu, has won a three-year reprieve from eviction in a new deal with the stations' owner, U.S. Restaurant Properties Inc.
Texas-based U.S. Restaurant bought 27 former Texaco stations on Oahu in late 1998, under a court-ordered breakup, and leased 17 of them to B.C. Oil, based in Orange County. The other 10 are run by independent dealers.
But B.C. Oil, which brought back the Arco brand to Hawaii and promised lower prices, had difficulty paying its rent. By March, U.S. Restaurant was looking for a replacement tenant.
U.S. Restaurant said yesterday, however, that B.C. Oil has brought in a partner who put up equity worth $2 million as a guarantee toward payment of the rent obligations.
"We've given them a rent reduction for the next three years," said Barbara A. Erhart, U.S. Restaurant chief financial officer. "In return they have given us a contingent payment that will be applied to certain notes receivable."
One factor that led U.S. Restaurant to keep the Hawaii situation in place, Erhart said, was signs of an improvement in the Hawaii economy that makes B.C. Oil better able to take care of itself. "I think that's the good news for everyone, that B.C. Oil has been able to work things out on their own," she said.
U.S. Restaurant said it modified the percentage rent B.C. Oil must pay on the margin it places on top of the wholesale price of the Arco gasoline. B.C. Oil's president and chief executive, Hani Baskaron, could not be reached for comment.
