Brew Oil was forced to close Sinclair-branded convenience stores in Eastern Iowa, including Cedar Rapids, Hiawatha, Eldridge and Davenport, after attempts to renegotiate leases for the properties were unsuccessful, Brew Oil officials say.
Brew LLC, also known as Brew Oil and based in Storm Lake, issued a news release this week in response to a Corridor Business Journal article regarding the abrupt closing of five Sinclair stores in Cedar Rapids and Hiawatha in September.
The five stores, formerly Kwik Shops, were sold in separate transactions recorded from mid-January through mid-February, according to Cedar Rapids assessor’s records. The adjusted transaction amounts ranged from $1.02 million to $1.18 million.
After the purchases, the Cedar Rapids stores were gradually rebranded from Kwik Shop to Sinclair stores, a process completed just months ago with the addition of new signage at all five locations.
At the time the CBJ story was published, Brew Oil officials hadn’t responded to requests for more information.
However, Brew Oil issued a release this week. The release confirmed that the family-owned company ceased operations in Eastern Iowa in September, resulting in the closure of 15 Sinclair convenience stores. However, Brew Oil officials say the company hadn’t purchased the store locations – they had signed an operational lease to manage the locations under the Brew convenience store brand.
Brew officials say they operated the stores under a lease agreement with MEX RE-NW-IA LLC, a Wyoming company, and its parent company, Mountain Express Oil Company, headquartered in Acworth, Georgia.
Shortly after Brew began managing the Eastern Iowa stores, Mountain Express Oil filed for federal bankruptcy protection in Texas. Thereafter, the Eastern Iowa locations were purchased by an out-of-state investment group, InCommercial, which was not affiliated with either Brew or Mountain Express.
Then on Aug. 25, a federal bankruptcy court ordered the termination of Mountain Express Oil’s master lease with the out-of-state owners, which included its lease with Brew for the Eastern Iowa stores.
“This unexpected development had significant repercussions for Brew’s lease agreements and rents,” Brew Oil officials said in the release. “Despite Brew’s earnest efforts to negotiate a new long-term lease with the owners of these properties, negotiations ultimately failed. InCommercial, the new property owner of all 15 sites, directed Brew to exit the properties.”
In the wake of the stores’ abrupt closure, Brew Oil owner Inder Singh donated over $170,000 worth of merchandise from the stores to several Eastern Iowa food banks, including food and personal care items.
“The Davenport Community School Food Pantry (DCSFP) is overjoyed by the generous donation from Brew that has been given to our guests at the JB Young Opportunity Center over the last month,” DCSFP director Ralph Kelly said. “We had lines of people who were very appreciative.”
Brew Oil continues to operate 28 stores, mostly in northwest Iowa, and company officials say expansion plans are under way.
