So What If Joe Mamo Made $788 Million?
Attempts to curb a Washington, D.C., gas station mogul raise issues of money, power -- and race.
The Capital Petroleum CEO also says that he doesn't set the District's gas prices and that owning gas stations is a stepping-stone business. "We are really a real estate company. Long term, the real estate is where the value [of a station] is," he told the City Paper, a local weekly.
A Washington City Paper article reported that Mamo first worked in a gas station while he was a community college student. His entrepreneurial impulse emerged in 1987, when, with his savings and father's help, he bought his first D.C. gas station. Over two decades, Capital Petroleum became one of the area's largest motor fuel distributors, transporting gas from the refiners to the station operators.
Along the way, Mamo bought, leased or built gas stations, in effect supplying fuel to the stations that he owns but that others manage. Then, in 2009, as oil companies sold off company-owned retail stations, he joined a host of other entrepreneurs who wanted to buy those stations. Between April 2009 and December 2010, Mamo worked with the advisory firm Petroleum Capital & Real Estate LLC and bought 211 Exxon and Shell stations. Most are in the District and northern Virginia, but 71 are in New York City.
Mamo's website says that 2010 revenues were projected to be $778 million. That figure places Capitol Petroleum in the top 10 of the nation's largest black-owned businesses.
Most of the deal's financing came from an unnamed private-equity real estate investment trust that learned of Mamo through his advisory company. In 2009 one of Mamo's companies bought 36 Exxon stations and then completed a sale-leaseback with Getty Realty Corp., the nation's leading publicly traded real estate investment trust, which specializes in ownership and leasing of convenience store gas stations and petroleum-distribution terminals.
Friends in Many Places
A key to Mamo's success is his mastery of two important business attributes: corporate networking and making nice with politicians. According to a newspaper article, early in his gas station career, Mamo hired a Mobil oil executive-turned-consultant. That relationship led in 1996 to Mamo becoming Texaco's first black distributor. Two years later he became one of the first black distributors for Exxon.
Since the mid-1990s, Mamo has also met many of the D.C. region's elected and would-be politicians. In turn he, his family and his companies, as recorded by the District office of Campaign Finance, made donations to District candidates for City Council, mayoral and state and congressional office.
Recently, in light of the opposition to Cheh's proposed legislation, another of its City Council proponents, Phil Mendelson, urged a lobbyist working with disgruntled service station owners to find a compromise solution. Which raises the question: If Mamo makes his money in traditional -- and legal -- fashion, what's the problem?
Frank McCoy writes about business for The Root.