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Howard gas station prices, competition a focus at Planning Board meeting

Laws and LegislationDownstream Oil and Gas Activities

Howard County is home to some of the highest gas prices in the Baltimore region, according to a new study, but a coalition of local gas station owners argued Thursday that an influx of new stations could lead to blight and environmental issues along some of the county’s major corridors.

The group, united as the Howard County Independent Business Association, is requesting substantial changes to county zoning regulations that would make it more difficult for gas retailers to enter the Howard County market.

A separate group of businesses, led by representatives from Baltimore-based convenience and gas chain Royal Farms, said the county’s gas prices would stay high if additional barriers to competition are created. 

The Royal Farms group recently commissioned a study of gas prices in eight Maryland jurisdictions that found that Howard County’s prices, at an average of $3.65 per gallon in 2012, were the second highest in the group – after Montgomery County – and the highest in the Baltimore region. Baltimore City came in fourth, at $3.58 per gallon – 7 cents cheaper than in Howard.

The reason for Howard's high gas prices, according to the study's lead author Daraius Irani, is a lack of competition. 

"When we accounted for the different economic variables, we came to the unmistakable conclusion that those areas with more competitive marketplaces tended to have lower mark-up opportunities for station owners, and thus lower gas prices for consumers," said Irani, executive director of the Regional Economic Studies Institute at Towson University. 

Representatives from both groups argued their case before the Planning Board Jan. 2. 

The HCIBA’s proposal would change county zoning regulations to require any potential new gas stations to prove, using a market study analysis, that there is a “reasonable public need” for that new station.

New gas stations would also be required to build all their structures at least 1,000 feet from schools, parks, playgrounds, daycare centers and environmentally sensitive areas. Currently, the setback for gas stations is only 30 feet. 

HCIBA representative Earl Adams Jr. said his organization’s goal in submitting the proposal was to prevent blight from shuttered gas stations and to protect the health and environment of Howard County citizens. 

He also said the zoning changes were necessary to reflect an evolving fuel industry weakened by declining gas sales. Small gas station owners now have to compete with large convenience store-gas station hybrids and gas stations owned by supermarkets like Costco and Giant, who can compensate for lower prices at the pump by profiting on other sales.

“The intent is to look at how the industry has changed,” Adams said. “What we know as a gas station today did not exist 25 years ago. And it is proper to make sure the regulations are consistent with those changes.”

Nichole Galvin, the attorney representing HCIBA, said creating a countywide standard to measure public need for a gas station would level the playing field for smaller stations.

“We want to prevent shuttered stations,” she said. HCIBA members argued that former gas station sites were harder to develop for other uses because of the environmental and safety concerns that accompany cleaning up the site. As a result, they said, blighted former gas station sites could tarnish Howard County streetscapes.

But representatives from the Royal Farms group said the reality wasn’t so dire.

“What drives redevelopment of sites is no longer environmental issues, it’s the market,” said Jonas Jacobson, a lawyer for the Royal Farms group. We see [former gas station] sites getting cleaned up and developed all the time for other uses.”

He cited a former gas station lot  in Ellicott City that developers want to turn into a Chipotle as a local example.

Sang Oh, another attorney representing the group, questioned the HCIBA’s motives. “This is not a charitable organization,” he said. “They’re dealers. Are they really worried about blight and the environmental reasons and protecting health?”

Royal Farms has its own business aspirations in the county. The chain owns property on Snowden River Parkway in Columbia, where it hopes to open a new gas station.

The county’s Department of Planning and Zoning has recommended the Planning Board deny the HCIBA’s request.

“We don’t require market studies for any other kind of business,” DPZ Director Marsha McLaughlin noted. “Normally business competition is good and would be encouraged.”

She said the current regulations, which require that a proposed gas station won’t cause a “blighting influence due to a proliferation of such uses,” were sufficient for now.

“[Blight] is not unique to Howard County and we will continue to monitor what’s happening across the country… to find out what would be appropriate in terms of solutions,” she said. “It might be that assistance in redeveloping [former gas station sites] would be better instead of prohibitions in the zoning regulations.”

The Planning Board will hold a work session to discuss the proposed zoning changes on Jan. 16. After the Board makes its recommendations, the proposal will come before the County Council, which must vote on all zoning amendments in its capacity as the Zoning Board. 

Copyright © 2014, The Baltimore Sun
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