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7-Eleven Hawaii
starts remaking
9 Arco stations

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By Russ Lynch
Star-Bulletin

The convenience store business 7-Eleven Hawaii Inc. has begun converting nine Arco gas stations on Oahu into 7-Eleven stores, now that its sublease of 10 Arco stations has been finalized.

Dallas-based U.S. Restaurant Properties Inc., owner of the Arco stations on Oahu, said today that its master tenant at the stations, B.C. Oil of California, has wrapped up sublease terms with 7-Eleven and the switchover has begun.

Arrangements for a 10th site are pending because an agreement on its hours of operation has not been reached, U.S. Restaurant Properties said. B.C. Oil reached a tentative agreement in June to sublease 10 Arco stations to 7-Eleven. The company has not disclosed the specific locations.

7-Eleven Hawaii has 50 stores statewide, including 40 on Oahu. It is a subsidiary of 7-Eleven Japan Co., which has 8,200 stores and $15 billion-plus in annual revenues.

U.S. Restaurant Properties is a major owner and developer of franchise-brand restaurants and service stations, operating such brands as Burger King, Arby's, Chili's, Pizza Hut, Shell and ExxonMobil.

It entered the Hawaii market when it bought the 27 former Texaco stations in late 1998 under a court-ordered breakup related to the Texaco-Shell merger of their U.S. marketing and refining operations. In January 1999, U.S. Restaurant leased 17 of the stations to B.C. Oil, based in Orange County. The other 10 are run by independent operators.

After some initial problems paying its rent, B.C. Oil signed a new deal with U.S. Restaurant in May, which gave it a three-year sublease at reduced rent. B.C. Oil made a contingency payment to U.S. Restaurant to reduce its debt and brought in a partner that put up $2 million for the Oahu operation.