“Because we could not compete, all dealers could stand to lose their businesses to Mamo,” says Roland Joun, who is a partner in a Mamo-owned station in Georgetown.
Anyone who regularly buys gas in the District knows it’s usually cheaper to fill ‘er up in the suburbs. Experts tick off a variety of reasons why: high real estate prices, the city’s 23.5-cent gas tax, credit card charges, the smaller size of D.C. stations, which means fewer convenience store sales (the true profit centers of most stations).
But, some critics allege, the business ambitions of owners like Mamo are also a factor. In buying up so many gas stations, Mamo has in fact moved from being strictly a player in the gas industry to being a major real estate owner. The land, after all, could just as easily be leased to a supermarket or a bank—or sold to a condo developer.
Stacy Milford operates Circle Exxon, a station and garage near Chevy Chase Circle that one of Mamo’s companies purchased as part of the multi-station deal in June 2009. Milford says it’s unsettling to know that once his lease runs out in a couple of years, Mamo may find it more lucrative to sell the property for condos rather leave it as a gas station. “It used to be that the oil companies wanted to just sell gasoline. Now they want to be real estate companies,” says Milford, who followed his father into the gas-station business but says he would “absolutely not” suggest his kids do the same.
Mamo dismisses most of the dealers’ concerns as unfounded. “I think their future is as bright as it was in the past,” he says. “We love having tenants that have long service to the neighborhood and the community. We rely on them. So I don’t see any changes in their future…we actually encourage them to stay.” Mamo also rejects the dealers’ allegations that prices at the pump have risen in D.C. as a result of his company’s growth.
He is frank, however, about his real estate aspirations.
“We are really a real estate company,” he says. “We’re in it for the real estate.” Mamo considers the coming transition inevitable, given the high cost of D.C. real estate and predictions about “peak oil,” alternative fuels, and electric cars that might eventually make gas stations obsolete. “Long term, the real estate is where the value is,” he says.
In fact, the “long term” has already arrived for some of his properties. Mamo sold a former station property at 1024 Pennsylvania Ave. SE on Capitol Hill. Today the site of the foreboding-looking Butterfield House condos. He has lined up the necessary zoning permits to do the same with gas station property at the corner of North Capitol Street and Florida Avenue. And stations like the Key Bridge Exxon in Georgetown, which he purchased in the 2009 deal, could also be redeveloped, says Mamo, noting that the District now has fewer than half the gas stations it did when he leased his first station in 1987.
“The market is changing,” he says. “A lot of properties are being used for best and highest use, as the properties become more expensive. So the chances are less and less gas stations in the future.”