Herbst taking back 13 LV-area gas stations as partnership collapses

David Strow

Thursday, Feb. 8, 2001 | 11:31 a.m.

A deal between Herbst Oil Co. and a Florida-based operator of car washes has been rescinded, a move that will return 13 Terrible Herbst gas stations and car washes to Las Vegas-based Herbst.

The deal between Herbst Oil and Car Spa Inc. of Fort Lauderdale, Fla., was struck in late 1999, and Car Spa had operated the combination stations-car washes for a year. But the two sides recently decided to rescind their deal because of differences in opinion about where to expand. Both companies, however, said the break-up was amicable.

"We had a great relationship with the Herbst group," said Phil Eggen, vice president of marketing for Car Spa. "But we're a national chain. We want to be able to focus on expanding our brand nationwide. We were operating them for a year, and had to make a decision."

The deal, struck in late 1999, expanded Car Spa from a single gas station-car wash complex in Florida to operator Terrible Herbst complexes in the Las Vegas area. The deal affected only those stations with car washes, which retained the Herbst brand. Car Spa had also acquired options on four land parcels in the Las Vegas Valley, and had planned to build outlets at those locations under its own brand.

In exchange, the Herbst family gained an unspecified equity stake in Car Spa. Those shares were returned to Car Spa as part of the rescission.

Since the 1999 deal, Car Spa has expanded to a number of major markets, including Atlanta, Houston, Dallas, Virginia Beach and Southern California, Eggen said. The company wanted to focus on those efforts, Eggen said, rather than operating stations in Las Vegas that didn't carry the Car Spa brand.

"It was a difference of philosophies about where to expand the company," said Sean Higgins, general counsel of Herbst Oil. "They were growing outside of Las Vegas, we felt we should be growing more quickly inside Las Vegas. We felt this was the right direction to go."

Herbst Oil now operates more than 60 gas stations under the Terrible's brand in the Las Vegas Valley. Within three months, Higgins said that will be increased to nearly 70, as Herbst continues to construct new stations and acquires existing stations.

That aggressive growth strategy will continue, Higgins said. The company has options to buy six more land parcels for the construction of gas stations and car washes, Higgins said, and has 12 to 13 other sites that will be used to build gas stations.

One site that will see a Terrible Herbst station return is a high-profile vacant lot at the intersection of Sahara and Valley View boulevards. Car Spa had torn down a Terrible Herbst station there with plans to build a new station and car wash. But construction never began, and the site has remained vacant for nearly a year.

Site plans for that land's development will be filed this month, Higgins said.

"We have pretty aggressive expansion plans," Higgins said. "There's a need for new car washes in the valley."