Topped off: Convenience store owner is Fuel's high bidder

After a spirited bidding war that included half-million-dollar-plus bids from one of Charlottesville's best-known developers and from the company that may have created the concept of the upscale filling station, a heretofore low-profile business owner made the winning bid for the long-closed Fuel Co. station in a July 14 foreclosure auction.

Located on Market Street at the northern terminus of the Belmont Bridge, the .31-acre site was once heralded as the vanguard in a new wave of upscale gas stations. But after the Thursday morning auction, it appears on its way to trade hands for about half its assessed value.

With a winning bid of $580,000, Subhash "Sam" Desai outbid developer Keith Woodard and David Sutton, leader of Tiger Fuel, the petroleum company that, with its Bellair Market, appears to have pioneered the notion of selling fancy foods at gas stations.

"There are a lot of problems with the property," said Sutton, explaining why he halted his bids at $575,000. "This has been a gas station for 30 or 40 years, so there's no telling what's in the ground."

A state Department of Environmental Quality employee attended the auction, and auction leader Nancy Schlichting took the unusual step of giving the winning bidder a chance for a study period, which will allow him to back out if environmental problems are found. Schlichting is allowing the real estate closing to wait until October.

However, Schlichting added, "There's no reason to believe there's any problem with the property."

With its distinctive sail-like canopy designed by architect Madison Spencer, Fuel Co. opened in the summer of 2003 to fulfill creator Patricia Kluge's vision for mixing fine foods and auto fill-ups. However, the place never appeared to catch on with consumers and closed four years later. Subsequently, Kluge went bankrupt.

The auction drew a crowd of about 50 people– although only six had registered as bidders, according to Schlichting, who advised that the winning bidder gets the gas pumps, the underground storage tanks, and the restaurant hoods inside. The rest of the fixtures and associated personal property are slated to be sold on July 28.

As for Desai's plans, he's keeping them to himself. Though he gave his age as 52, he declined even to mention what business interests he holds. However, an online search suggests that he owns the Seven Day Junior convenience store as well as at least one Subway sandwich shop.

The property– currently assessed for $1,134,600 and including about 3,700 feet under roof– was purchased by Kluge for $485,000 in 2002. After the 2007 closure, Kluge had the place listed for sale for as much as $1.9 million.

In a 2009 refinancing demanded by Farm Credit of the Virginias, the company that lent $35 million for her winery complex, Kluge committed the Fuel property as additional collateral, according to Schlichting.

"We thought it was worth a maximum of $700,000," says local businessperson Keith Rosenfeld, who began purchase negotiations in the summer of 2009, but backed out when he learned that City building code required an elevator if he erected a second story.

"That was a budget-buster for us," says Rosenfeld, "but that's a very strategic location."


This is the way it is supposed to work. A property once valued at two million because of hype is sold for its real value of 600k as proved by the winning bid. The rent can now go from 140k a year to 42k a year and someone can run a business and make a profit.

Send this to Obama and congress so they will let the foreclosures occur and get things overwith and behind us.

To bolster again the idea that real estate prices, though down from their peak, are still in the bubble zone, this property's real value stated in terms of what it can be used for is still at least $200K below what it fetched at auction. Sold in 2002 at bubble price of 485. Old narrow building with limited uses...
Just cuz it's less than half original asking price doesn't make it a bargain. Be interesting to see whether the buyer figures that out and bails during the study period.

Shouldn't be that hard to put a Subway in one half, market with gas in the other, and turn a profit.

I vote he considers putting in a Dairy Queen franchise. :)

Parking was and will be a problem.

Gasbag you need to eat less fast food, not more

It always did well as a gas station, since it is on the tourist route. Almost every time I went there, before it become Fuel, somebody was asking directions.

Note it went gourmet *before* Kluge bought it, but she did add the very expensive sit-down restaurant side. When it went gourmet, the owners hired Tomas Rahal, later of Mas, to run it. Was delicious, though he did a few odd things like not stock convenience store orange juice - he sold fresh-squeezed only. At some point a Fredericksburg gas station company bought it and if memory serves, Tomas left but his menu remained, at lesser execution. When Tomas ran it it was a great alternative to Tiger's Belair Exxon, also very good. Later Tiger branched out with more in that style. Tiger has been influential on Everyday Cafe, at several gas locations, also quite good. So Cville really has a pretty good choice of gas stations with nice sandwiches. But the Tomas station was a bit more advanced.

Kluge's operation at Fuel was a bit haphazard. The employees were rolling their eyes as she showed up with the latest frozen treat from Sam's Club. That is my only significant recollection of the place, aside from the deli counter. She had good chefs and some decent Louisiana etc. food.

But she could never sell gas! The purple lighting under the awnings killed that, in my opinion, though other say it was the pricing. The purple lights were quite off-putting. I think there is even research on that. The pump islands went from very busy to usually empty.

The bank next door is vacant by the way, where Fuel borrowed parking spaces.

Who, me? Huh? I do indeed need to lose about 25 pounds, but it's from Pepsi. It's not from food.

Colfer, the Wachovia bank next door closed after Mrs. Kluge did.

As a lawyer I have watched with interest as this bank has rightfully tried to get their money back, but seems to have looked a gift horse in the mouth at every turn. They failed to earn good $ at every auction. Didn't I just read in the Hook last week that there was someone who wanted to buy Fuel Co. for 650K? Didn't the Wall St Journal report just last week that Trump offer over $20mil for the winery? Well, the bank got less at auction each time. Ms. Kluge and Mr. Moses, I think you have a lawsuit!

You have to be a lawyer to watch with interest? Oh, as I read on, you're an ambulance chaser...........

Any lawyer taking a case from the Moses-Kluges better look at their bankruptcy filing and see how many law firms in town are on the list for uncollected fees due to past adventures before getting into another...and there may not be any better check.

Why on earth does one need an elevator in a two-storey building?
Has Charlottesville become so soft that its residents can't climb a few steps? Gee Whiz...

Elevators are required in most new construction open to the public.

It has to do with handicapped and disabled people ya know! :)

That's funny, the state is broke but sent a bureaucrat with a clipboard to the sale? Nobody drinks water from a well in town anyway, its about the lowest risk place for a gas station.

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When the Holsinger Building was being developed the contractors were told about the lands history as a Greyhound Bus repair center back in the day. They did testing, but missed the worst of it. When the backhoe began digging, the workers ended up scrambling away from all the toxic fumes etc. Work came to a dead halt for some time while the State/City etc sorted it all out.

Became quite a mess, and significant added cost factor.

The tax assessor's office ought to be taking a hard look at every sale where the sales price is less than the assessment. That is the norm nowadays; but unless you sell your house and the assessment goes down (automatically) we are continually being overtaxed. We are being overcharged every year now, substantially in some cases. The Tax Assessor's office is doing nothing to remedy this.

Actually, the local real estate tax assessment office is required to assess property within a few percentage points of the fair market value. If you can prove that sales within your neighborhood for a comparable home are below what your property is assessed for tax purposes, the local tax assessment office has an appeal process for property owners and you could win your appeal.

I believe that in Charlottesville, real estate is reassessed every year so they absolutely are doing something about the changing real estate market. Part of the problem, however, is that homes are not selling. Therefore there is not as much basis for comparison. Your neighbors would do you a favor by taking a loss on the sale of their home for then you would see your assessment drop. By holding out for a higher price, they drive your assessment up.

To claim anonymously that you are over taxed is pretty easy. To prove this assertion is more difficult. Good luck!

Gasbag Self Ordained Expert:
I apologize. I completely forgot about that.
Not so surly, but just as old...

Hey Amigo,

The Assessors are always FAST to chase increasing selling prices upwards, but really SLOW to drop prices in declining markets. They always use "thin sales" or "unqualified" sales as excuses to keep tax values artificially high. This practice is not unique to Charlottesville or Albemarle.

And don't try to inject common sense -- properties selling below assessed values are overvalued. That will really confuse them.

BTW, just because the law says they're supposed to do something and they're supposed to do it consistently and equitably, there are few mechanisms in Virginia to make sure the locals actually follow the law. Virginia is a little LAX on enforcement in a lot of areas. Take a look at Building Code enforcement sometime if you really want to have some fun.

The assessor's office is correct unless you can prove them wrong on your one house. As far as I know no state office audits them such as the Alb. Circuit Court (which needs to be audited more than once a year) I calculated all the sales City in C-ville for 3 months Jan-March 2010. (Leaving out trust sales, new builds etc. What I saw was:
Jan 2010: 18 sales: $3,864,500 total sale, assessed value was $4,328,700 or 12% less
Feb 2010: 21 sales: $5,126,300 total sale price, assessed of all was $5,871,100 or 14+% diff
Mar 2010: 32 sales: $8,074,390 total sale price, assessed of all was $8,600,700 or 6.5% diff

It would take much work to check the whole year etc.

Court Square, that is interesting. If only Cville had a journalist or two that was willing to do that work and put it in a story. But alas, we don't. Too busy reprinting police blotters and press releases to do that. Oh well.

My favorite "Fuel" dish was the "Gulf-Spill Surf and Turf: blackened shrimp and nutria with a tangy remoulade.