Fueling Controversy

Roy Phillips has run Texaco stations in Denver since the Seventies, and in that time he's learned a painful lesson. As a black man, he says, "you can operate stations as long as they're inside the black community."

Over the years Phillips made a half-dozen attempts to acquire stations in predominantly white areas of town, and Texaco always turned him down. But last week, in the wake of the company's $176 million settlement of a two-year-old race-discrimination lawsuit, local Texaco officials dropped by to chat with Phillips about new opportunities. It was the first time in ten years that they'd visited his shop at 26th Avenue and York Street, at the edge of City Park.

"They were very nice, polite, caring and concerned," says Phillips, who also owns a Texaco at 34th Avenue and St. Paul. "If there are any opportunities--lucrative opportunities to some minority in Denver--I want to be on the top of the list. I would not be happy if I saw them doing more for someone else than for me."

Remembering all the times Texaco refused his requests for locations in south Denver, though, he's not holding his breath. "You'd ask and they'd say it was not available," he says. "Or they'd open a station back up as a company operation. These guys were bullshitting me. It's like you're qualified to run one here, but not one in Highlands Ranch."

Fifteen years ago Phillips considered suing the company himself. He didn't, he adds, because the law firms he contacted wanted huge fees to take on such a case.

Phillips is the only black Texaco dealer in town. But then, he says, the gas-station industry doesn't encourage blacks. "It's never something said," he adds. "It's just something you know. I don't have any doubt they've discriminated against me."

And he doesn't doubt that the company discriminated against the plaintiffs in the recently settled civil suit--although he's not sure the $176 million settlement deal "would hurt Texaco that much." Of that total, $35 million is slated to go toward more diversity-training programs within the company.

After Texaco announced the settlement, civil rights leaders called for a boycott of the company. So far, that hasn't affected Phillips's stations; he says his customers have known him for years and will likely continue coming, anyway. (Phillips makes most of his money on automobile repair and service, not gasoline sales.)

A Kansas City native, Phillips worked as a life-insurance salesman before moving to Denver in 1969. His brother, the Reverend Acen Phillips, owned a shopping center at 35th and Elm, and Roy Phillips soon was managing an Amoco station there. Over the next few years he acquired seven more stations from a variety of companies, including Exxon, Chevron, Amoco and Husky. Most of the stations were north of 30th Avenue, although he did run one for a time at Seventh Avenue and Quebec.

"It didn't cost a lot to get into the business back then," Phillips says. "Just buy the gas and buy the inventory." But what ran between $15,000 and $20,000 then would now cost anywhere from $75,000 to $100,000, he adds.

Phillips eventually added Texaco stations at 42nd Avenue and Colorado, 34th Avenue and Colorado, 46th Avenue and Steele, and Colfax and Williams. He bought his two current stations in 1980, converting the York Street shop from an Amoco dealership to a Texaco in 1983. He says he went with Texaco because its advertising campaigns and training programs were better than those of other oil companies and because there were more Texaco credit cards in the market--and therefore, more potential customers.

When changing EPA standards in the mid-Eighties required the installation of expensive new gas tanks, Phillips wound up selling some of his properties to the likes of 7-Eleven and McDonald's. He now has two stations left, both of which he owns. As an independent franchise operator, he doesn't work for Texaco. (About 60 percent of Texaco's local stations are independently owned.) Instead, he buys gasoline and automotive products from the company indirectly, through a "jobber," or middleman. And although being black may have affected her husband's luck with Texaco, "generally, gasoline companies don't treat their independents well," Phillips's wife, Shirley, points out. "You don't want to overlook that."

Still, while Phillips has been operating stations in black parts of Denver, other minorities have been able to set up shop throughout the city. Sam Hajj, the Lebanese manager of a Texaco-owned station at Monaco and Leetsdale, says his experience with the company has been positive. When Texaco was looking for new managers for some of its stations a few years ago, Hajj and his brother, who were both working at Texaco shops, were asked to apply. They both were accepted; Hajj's brother now oversees a station on Pierce Street in Lakewood.

"As a minority, I expressed to them that they should give us a chance to see what we could do," Hajj says. "They've been very good to me."

But Phillips says that no one from Texaco ever told him the stations had become available. "In 27 years," he adds, "they've never called me and said, 'We have a place and we want you to run it.'" Nor, he says, was the company supportive when he tried to improve the stations he already had. At one point, Phillips wanted to turn the shop on St. Paul into a lube center and add a convenience store to the York Street outlet; Texaco offered no help on either project. "They said they didn't have anything available and the place we had would not be qualifying for upgrades," says Shirley. "And you say to them, 'What do I need to do to qualify?' and they don't say anything. We were never told, 'You need to do A, B or C.' There was never any guidance."

Local Texaco officials, however, say that the first time they learned of Phillips's interest in expanding was last week. "We were not aware of any requests made to expand his operations and us denying him," says Rick Powell, Texaco's Denver marketing manager. "This is the first we know about it. Now that we know he wants to expand, we're trying to help Mr. Phillips find other locations."

But Phillips is worried that there are fewer locations available these days. The big oil companies, he says, and Texaco in particular, are moving away from neighborhood-based stations like Phillips's in favor of larger stations that pump more gas. "They didn't want any stations in the black community," Phillips says. "It's maintenance and upkeep. If you put $25,000 on this property on Welton versus $25,000 on a property on south Tamarac, what makes more sense?"

Powell denies that Texaco is bailing out on minority communities. "We're not pulling away from the inner city, by any means," he says. "We're looking at sites in downtown Denver. It is an economic decision, but we're not targeting black neighborhoods."

Phillips hopes Texaco's new awareness might help fuel his plans to diversify into potentially lucrative jobberships, which would allow him to buy gas directly from the company and sell it to various clients in metro Denver, including perhaps the city itself. "I want to be optimistic," he says. "But you never know whether they'll string you along for a few months, and everyone'll forget the big picture, and then they'll say, 'Well, we tried--we just don't have anything for you.'