At a premium: by selling only high-octane fuels, gas station and auto detailer becomes the main pit stop for L.A. collectors of classic and performance vehicles. (Small Business).

A gas station selling fuel for $6 per gallon is an easy "no thanks" for most drivers. But to car collector Tom Castellano, Canyon Service & Detail is indispensable.

"It's a throwback in time," said Castellano, who has a collection of rare Mercedes. "If it wasn't for that 100 octane gas, I couldn't own the cars I have."

Like sushi at $100-a-plate, the 76-year-old, three-pump service station on Entrada Drive in Santa Monica Canyon serves a market willing to pay for premium product. At the full-service only station, with its gleaming, orange and white vintage pumps, motorists fork over as much as $6.50 a gallon to load up on 118 octane leaded fuel that can't be found anywhere else in the city.

"We have a niche market in the sense that car enthusiasts come from all around," said co-owner Craig Clark, who noted that Canyon serves the most 100 octane unleaded fuel in the state. (Canyon abandoned the 87- and 89-grade gas found at most stations a couple years ago.)

"We don't want to price ourselves out to where nobody will come, but the fact is nobody else carries this stuff," he said.

The station is complete with retro touches like bottled Coke in a vintage vending machine and that "ding-ding" sound signaling a car has pulled up. It has a 30,000-gallon capacity, about a third of the typical gas station's, and serves anywhere from 25 cars on a typical weekday to a few hundred throughout the weekend--small potatoes for most chain stations that do many times that level of business.

The clientele is a mix of affluent residents of nearby Pacific Palisades willing to pay extra for the convenience of filling up close to home and classic and high-performance car collectors looking for the high-octane fuels.

"Most of our business is local, but we do have weekend warriors that cruise up the Coast Highway," said Clark. "We'll get car clubs that'll come in and bring 20 to 30 cars, and everybody just waits in line to fill up."

Broadening services

Operating the station for a hardcore group is not enough to keep business going, so Clark, who owns and operates the station with his brother Brian, has hedged his bets by operating an auto detailing business at the site. More than half of Canyon's $800,000 in revenues--and about 85 percent of its profits--come from its detailing business, which was begun six months after the Clarks took over operations.

The Clarks owned Zen Bakery on Montana Avenue in Santa Monica for four years before selling the operation in 1995 ("Starbucks put us out of business," quipped Clark). Looking for a new venture, they saw the success an associate was having with an auto detailing business in Malibu and began looking for a location to open a similar business. That's when Canyon was put on the market.

"We saw the potential based on the draw for the fuel and the visibility, as well as the type of cars coming into the station," said Clark, who grew up working on his father's car collection.

By focusing on detailing, the Clarks would also avoid the fate of the station's previous owner, whose business was shut down by the city of Los Angeles because his engine repair business did not comply with the property's zoning that barred auto repairs.

Most chains are affiliated with refineries, leaving independents to buy fuel on the open market. That makes them more vulnerable to the price swings that habitually hit the fuel supply market, according to Jay McKeeman, executive vice president of Sacramento-based California Independent Oil Marketers Association.

"The margins on gasoline are getting slimmer and slimmer, especially for the independents," said McKeeman.

With Canyon's cheapest gas running 70 cents a gallon higher than the self-serve premium fuel sold at the Chevron on Pacific Coast Highway, its nearest competitor, price sensitivity is not nearly the issue it would be for a station competing on price alone.

"It's exactly what independents have to do--to figure out creative ways how to make a business run:' said McKeeman. "It's all about how much revenue or profit you're generating per square foot that matters."

Avoiding the mundane

The station was built in 1926 and sits on land still owned by descendents of Francisco Marquez, who, with Ysidro Reyes, was granted the 6,600-plus-acre Rancho Boca de Santa Monica by the Mexican government in 1838.

Descendents of the family ran the station in its early years, after which it was operated by a string of independent owners before the Clarks took over in 1995.

The brothers spent about $50,000 retrofitting the gas pumps and cleaning up the tiny building and property.

"It was a fluke thing," said Craig, 42. "We grew up in the area and thought it would be really fun to reopen the old station. It was an idea that took off a lot more than we anticipated."

In addition to its detailing and fuel sales business, the Clarks are looking to bank on their station's gleaming, retro image by expanding the brand of its flying "CS" logo, seeking to produce a line of caps and t-shirts.

RELATED ARTICLE: PROFILE

Canyon Service & Detail

Year Founded: 1995

Core Business: Premium gasoline and auto detailing

Revenues in 2001: $680,000

Revenues in 2002: $800,000

Employees in 2001: 8

Employees in 2002: 8

Goals: To grow detailing business and brand image into clothing industry

Driving Force: Word-of-mouth between car enthusiasts, locals