To get around the law, in 2012 Costco split its then-under-construction D.C. site into two, and created a wholly owned subsidiary — CWC WDC LLC — to run the gas station. Thus, the warehouse store could get its liquor license and the gas station could sell gas at around $.30/gallon cheaper than competitors in the capital.
But the Washington Post recounts how things got ugly when local gas station operators tried to fight Costco.
The station owners — and one owner in particular who operates a majority of filling stations in the city — first tried to challenge the zoning decision and have the liquor license revoked or give all gas stations the right to get a liquor license.
“The government decided they were going to do anything and everything to get Costco into town, including not complying with the law,” explained a lawyer for the gas stations. “In no other jurisdiction do they have this scheme.”
The matter eventually came before a local neighborhood advisory commission. One commissioner says he was accused of possibly taking kickbacks from the warehouse store for his support (a charge he denies), and that he received death threats from people opposed to the Costco gas station.
“This is serious, serious business,” the commissioner tells the Post. “If this was done back in the ’40s, blood would be everywhere. There would be a shootout at Bladensburg Road just like the shootout at the O.K. Corral.”
In the end, the commission and the Board of Zoning Adjustment approved the gas station, and in November the Costco-operated station became the first in five years to sell gas below the $3 mark in D.C.
The owner of the competing stations says all he’s asking for is for the law to be applied equally.
“If Costco is allowed to sell both gasoline and liquor, then my tenants should be able to do the same,” he explains to the Post.
Opponents of leveling the liquor/booze playing field in D.C. say that there is a huge difference between a convenience store where you can go in and buy beer/wine/liquor while your car is being gassed up and a business where one has to drive away from the fuel pumps to a separate parking area, walk all the way through the warehouse and then back to buy their booze.
“People are not going to have the same temptation,” says a rep for AAA Mid-Atlantic, which supports both cheaper gas and anti-drunk driving efforts. “You’re not going to be drinking a gallon of Jack Daniels in a Costco parking lot.”