Owner of long-time Tysons gas station considers whether with Metro coming, it's time to sell

By Jonathan O'Connell
Monday, July 19, 2010; 17

When Carl Schmitz first turned the key in the front door of his gas station in 1955, the nearby businesses on Route 7 were a gravel pit, a lumberyard and a nursery selling plants and other supplies to local homes and farms. There wasn't an office building or shopping center in sight.

"You could count the cars that went up and down Route 7 in a day, if you wanted to," Carl Schmitz, 79, says.

Fifty-five years later -- the anniversary came last week -- Schmitz Exxon Service is still a go-to place to fill up the tank in Tysons Corner, run today by Carl's youngest son, Eric. But today the site, at the intersection of Route 7 and Spring Hill Road, is at the doorstep of something unimaginable a generation ago: a subway station set to open in 2013.

With the county and real estate developers forging plans to create a mixed-use, walkable neighborhood around each new Tysons Metro stop, a gas and repair shop isn't likely to stick around forever. Even one that's been family run for 55 years.

Eric Schmitz, who grew up pushing a broom in the station for 75 cents an hour, purchased the station in 1993 and the land in 1999 from his father. He redeveloped the station to meet the growing needs of commuter traffic coming through Tysons, building nine bays for car repairs, a carwash, a convenience store and more gas pumps.

He realizes that with Metro coming, the station's days are numbered.

"Once that Metro is built, it probably should be office or retail at some point," he said of his station. "Whether that will happen in my lifetime I don't know."

This also isn't the first time redevelopment of the area drove up land values and caused small-business owners to consider selling. The elder Schmitz had a deal to sell the property to a developer in 1989, but the deal fell through when the buyer couldn't deliver the money.

Now the son is facing a similar dynamic. Land values around the Metro stations are likely to increase with the county's recent approval of an amended master plan for the area that offers the highest density allowances to properties -- like his -- that are within a quarter mile of a station entrance. The property is currently assessed at $6 million.

Schmitz said he has had discussions with some developers already, including those from the Georgelas Group, the company planning a 28-acre residential, office and retail complex to the north and east of his property. If that development comes to fruition, Schmitz Exxon Service will be surrounded by gleaming office towers, condominiums and plazas. But he also wants to stay in the gas business. Although the Metro construction has dented his sales at the pump, he said convenience store sales are up. Last December he opened a second station, a Sunoco, in Ashburn, and he said he would like to open others.

"I've had a couple local developers talk to me at length about it," Schmitz said. "I'm in a position now where I'm fortunate that I've got a very successful, profitable business. I'm not motivated to sell like some of the people that might not be doing as well."

If anyone can withstand the coming changes it is Schmitz, according to his banker, Harold C. Rauner, president and chief executive of the Business Bank. Rauner, who moved his own company out of Tysons to Vienna recently, called Schmitz "one of the sharpest businessmen I know."

"They might be able to withstand the pressure of some developer because they've met their volume and because there isn't much competition left anymore. If anyone can withstand it ... they can."

But if redevelopment of the site is inevitable, there are risks in holding out too long as well. Schmitz owns 1.6 acres, a smallish parcel by Tysons standards that might be most valuable if it is developed along with adjoining properties. "All these little guys who hold out think they are going to get more later, and if they're too small it doesn't work out," said Mark Larsen, president of a Herndon real estate brokerage firm.

Even though the real estate market isn't at its peak, Larsen said the density the county will allow on the site makes it much more valuable than before Metro came. "With the densities that Tysons is going to get out of these places, there is going to be a much better price. They didn't sell out last time, but I think they should this time," he said.

The price Schmitz can get is only one of a handful of considerations he is weighing. He said he still pumps gas for some of the same customers he served in high school, and he has employees that have been with him for more than a decade.

"I've got a lot of people that have worked for me for a long time. Am I supposed to just tell them I got a big fat check, so I'll see you later? I struggle with that sometimes."

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