Dealer to close
struggling Chevron
station in KahalaKamehameha Schools is retaking
the Waialae lease from the oil firm
amid losses by operator Handi-Cabs
Kahala Chevron Service and Auto Repair at 4346 Waialae Ave. is shutting down by the end of the year, with Chevron saying the leasehold site, owned by Kamehameha Schools, is not economically viable for the company.
Handi-Cabs of the Pacific Inc., which has been running the station for the past two years, has been making only 2 cents on each gallon of gasoline sold and is ready to leave the gas business. The company had purchased the site to park and fuel its cabs, but never made a profit from the station.
The Kahala Chevron station will close whenever the dealers run out of gas this month. Three other stations will remain in the immediate area of Kahala Mall, including another Chevron dealership, a Shell station and an Aloha station.
"The margin is terrible," said Craig Kimura, Handi-Cabs president, who has been with the company for 26 years.
Chevron requires its dealers to stay open 24 hours a day, which was a financial drain during off-hours, he said.
"It's not worth it," said Lorraine Kimura, company vice president and secretary treasurer. "You really don't make much on the station."
She estimates her company sunk $500,000 on the site, which will be written off when the station closes.
Chevron's ground lease comes up soon, and Chevron has decided to exit the property rather than commit resources, said spokesman Albert Chee. Chevron remains a major landowner around the state.
Last year, three other leasehold Chevron stations folded up on Oahu: Ken T Service on Dillingham Boulevard, Dick's Monsarrat Service near Diamond Head and Lance Goya's Chevron in Kalihi.
Earlier this year, Chevron announced plans to sell off all its 61 gasoline dealerships in Hawaii, and offered the stations to its dealers. ChevronTexaco Corp., the second-largest U.S. oil company, owns one of the two oil refineries in Hawaii, and wants to be more efficient.
Chee said some dealers are buying their stations, but the process has been slower than expected.
"We've actually closed on one transaction on Maui and we have a handful more that we are working on for the purpose of closing that are already in escrow," Chee said.
Earlier this week, ChevronTexaco said it will sell properties in 15 states, representing only 5 percent of its daily production. The divestitures will be completed next year.
Kamehameha Schools had no comment yesterday on the future of the 27,000-square-foot Kahala site, located at a mauka corner of Waialae and Kilauea avenues.
"Handi-Cabs is a very viable company. It was the service (station) that ate us up. So we'll just go back to what we know, Handi-Cabs," said Lorraine Kimura. Her cousin, Frank Young, is also a former Chevron dealer and critic of the company's pricing.
"Now he's going to say, 'See I told you,' " Kimura said. "I really wouldn't invite anybody to go into it."