Safeway gas station proposal ignites controversy

  • Dan Lutz, left, owner of the Chevron gas station on East Washington Street in Petaluma, rings up Jason Newman, as his son Zack Lutz, obscured, helps customer Lorna Appleton, on Wednesday, August 21, 2013. Lutz's station is adjacent to the shopping center where Safeway is proposing a large gas station. Lutz's father opened the gas station in 1968. (Christopher Chung/ The Press Democrat)

Safeway stores in Sonoma County are beginning to offer more than milk, bread and other groceries. They are soon going to start selling you gas — but not without controversy.

A Union 76 station at Mendocino Avenue and Steele Lane/Lewis Road in Santa Rosa is being remodeled into a Safeway-brand station.

While that changeover hasn't prompted any opposition, a 16-pump station proposed in Petaluma is raising questions among independent station owners and city leaders.

Their concerns range from unfair competition for the city's independent gas stations, to additional traffic at the city's most congested intersection, to air quality degradation near a school and day care facilities.

A Safeway spokeswoman declined to comment on the Petaluma proposal or discuss in detail the company's gas station strategy.

In a series of lawsuits against Safeway in the past five years, a Petaluma lawyer has represented several East Bay independent gas station owners who argue that the grocery giant's discount programs and gas pricing are illegally designed to drive them out of business.

Last year, an Alameda County court granted Dixon-area gas station owners an injunction that prohibited Safeway in that area from selling gas below cost in connection with its Club Card discount. That particular program was discontinued in Northern California after the ruling.

Another suit recently was decided in Safeway's favor, allowing the continued use of the Fuel Rewards program, which earns grocery customers a 10-cent-per-gallon discount at some Chevron and Safeway stations with a certain amount in grocery purchases.

Petaluma lawyer Jim Dombroski said his clients are appealing the decision.

"They have a number of discount programs we believe result in them selling gas below cost," he said, which violates state laws governing fair competition.

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