Month: March 2021

DRYCLEANERS LEANING ON ASSOCIATIONS, EACH OTHER TO COME UP WITH SOLUTIONS AND INNOVATIONS TO ENSURE THEIR SUCCESS IN THE NEAR FUTURE

BY: DRU CARLISLE

I’ve worked closely with dry cleaners for almost 12 years. During this time, the well-being of the industry has become a passion of mine. Unfortunately, my drycleaning friends had been observing a decline in dry cleaning operations across the country even before coronavirus, and now with work-from-home, virtual learning, limits on gatherings, it’s become even worse. Although, with news of vaccines ramping up and another round of PPP, we’re all optimistic things will start to turn around sooner than later. Either way, it’s had an enormous impact on this industry. And if you’re one of the cleaners who is surviving and doing well – good for you! Seriously! And if you are doing well, I might even guess that you’re a member of the Drycleaning and Laundry Institute and have been taking advantage of all the resources they are offering their members.

Now more than ever, drycleaners have been leaning on their associations and each other to come up with solutions and innovative ways to ensure their success in the near future. I want to remind drycleaners of the resources available to you. And to me, the biggest resources is being a member of The Drycleaning & Laundry Institute (DLI).

The DLI has been the premier trade association and voice for this industry since 1883. Since their inception, DLI has worked hard to provide its member base all the tools necessary to aid in running a successful, professional operation. Its not just the benefits and services (like website production, social media posts, garment analysis, etc.) but it’s the education and advocation they have done on behalf of the industry, especially since Covid started.

If you’re a DLI member, you’re likely also well-aware of the twice-weekly Zoom meetings that it offers its member base. These Zoom meetings offer attendees an opportunity to ask questions about anything related to their drycleaning business and for feedback on issues important to them that DLI can help address either through additional educational opportunities or through advocation (i.e. PPP questions, Care Label Act, allied trade webinars, DLI webinars, etc.). They also have an opportunity for peers to share ideas and advice with each other. These Zoom meetings alone have proven to be invaluable to members looking for way to continue to be successful. Not to mention the Drycleaning & Laundry Institute Facebook Group where members congregate and share their insights.

Here are five more reasons why dry cleaners should join DLI:

1. GARMENT ANALYSIS APP
Have you ever wondered why a certain item can’t get clean? Now you can take a picture of the item and get feedback through DLI’s Garment Analysis App. There’s no need to send it out for analysis anymore, which will cut down on wait times.

2. ENCYCLOPEDIA OF DRYCLEANING APP
Learning from others’ experiences can solve your challenges faster than trying to forge ahead alone. With over a century of experience helping dry cleaners, DLI has a wealth of resources available with guides and articles to support dry cleaning businesses.

3. STAIN REMOVAL APP
Have you ever wondered how to clean a stain you’re unfamiliar with? DLI has an app that can help you identify the best way to get that item clean. For example, if you have a rayon blouse with an ink stain, through the app, you will be able to select the material and type of stain and it will provide you with step-by-step instructions to remove the stain

4. DIGITAL MARKETING AND CUSTOMER OUTREACH
DLI will set up a website on your behalf, manage social media posts, and email marketing to your customer base.

5. DLI EXPERTS ON DEMAND
DLI experts can provide the support you may not be able to find elsewhere for your questions or technical problems. Instead of waiting for an answer, you’ll receive a prompt answer via phone, email or online chat.

It’s important for dry cleaners to periodically ask themselves what they are doing to help their business. Having a tool such as a DLI membership as a resource to help improve your operations, your practices and to take a load off your shoulders is an easy item to prioritize to ensure future success.

If you’re interested in becoming a member of the Drycleaning and Laundry Institute, visit dlionline.org. To stay up to date with the latest industry news, you can also follow DLI on social media.

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Dru Carlisle, Director of Drycleaner Accounts
For over 10 years, Dru has helped numerous business and property owners facing regulatory action, navigate and manage their environmental liability. Dru has vast experience in assisting dry cleaners in securing funding for their environmental cleanups through historical insurance policies. Dru is a member of numerous drycleaning associations in addition to serving on the Midwest Drycleaning and Laundry Institute (MWDLI) advisory council and on the Drycleaning & Laundry Institute Board (DLI) as an Allied Trade District Committee Member.

WHETHER YOU’RE BUYING, SELLING, OR NEAR A PROPERTY THAT’S ABOUT TO GO ON THE MARKET, YOU CAN’T AVOID ENVIRONMENTAL LIABILITIES.

Our Director of Drycleaner Accounts, Dru Shields, is working overtime these days staying abreast of trends and events that are impacting our drycleaner clients. She and I talk nearly every day, so this month I asked her to collaborate with me on this article to address an issue, of which we are hearing more often.

ENVIRONMENTAL LIABILITY CANNOT BE AVOIDED  
Everyone has heard it’s “best to let sleeping dogs lie” at some point. This old proverb presents the question, “Why bring up issues from the past that will only cause trouble? Let’s leave these things alone and as they are.” There is wisdom in this saying, but it’s not necessarily applicable for every situation. Do you own a property with a potential environmental problem from past drycleaning operations? Are you in a position where you may be blamed for an environmental release? I don’t believe that the sleeping dog proverb applies here. If it were me, I’d rather wake that dog myself, gently and cautiously, than have someone else wake him abruptly and make the situation go from manageable to unmanageable. I’m referencing, as you have guessed, the question of if, when, and how you approach looking for a potential environmental release at your drycleaning property.

As experienced business owners know, a large number of environmental problems are discovered during commercial real estate property transactions. When properties are to be exchanged from one business entity to another, or even refinanced, potential liability for environmental issues may also be exchanged if the new owner or lender doesn’t perform an adequate inquiry into the environmental conditions at the property. In turn, financial lending institutions are especially interested in looking for environmental contamination. They would like to take possession of the property that was used as collateral in the transaction without assuming liability for a costly cleanup, should their loan become default.

Read our answers to the most common questions about buying or selling drycleaning properties

CERCLA AND HOW ENVIRONMENTAL LIABILITY IS ALLOCATED
The rules governing the transmittal of environmental liability are enforced by the United States Environmental Protection Agency (U.S. EPA) using the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly referred to Superfund. CERCLA defines a liable party as: (1) the current owner and operator of a contaminated property; (2) any owner or operator at the time of disposal of any hazardous substances; (3) any person who arranged for the disposal or treatment of hazardous substances or arranged for the transportation of hazardous substances for disposal or treatment; and (4) any person who accepts hazardous substances for transport to the property and selects the disposal site. In most cases, numbers (1) or (2) define the situation for commercial property owners.

Also, under CERCLA, a person is an “owner or operator” of a facility (or property) if that person: (1) owns or operates the facility; or (2) owned, operated, or otherwise controlled activities at that facility immediately before title to the facility, or control of the facility, was conveyed to a state or local government due to bankruptcy, foreclosure, tax delinquency, abandonment or similar means. Remember, the U.S. EPA is not only interested in uncovering environmental contamination; they also want to find out who is responsible for it.

This is not news to most of you, but an owner of a drycleaning business that currently uses petroleum or chlorinated solvents, has used them in the past, or owns a property where they were used by others in the past. There is likely an old environmental contamination hanging around that probably belongs to you, whether it’s known or not. Since potential purchasers don’t want to inherit environmental issues along with a property, they are going to make sure that the rightfully responsible party claims it before the deal is closed. This is done during the environmental due diligence process by performing the Phase I and Phase II Environmental Site Assessment (ESA) process.

ENVIRONMENTAL CHALLENGES OF PERC CONTAMINATION
Unfortunately, perc contamination does not get better over time. It does not degrade quickly, and it does not usually stay in one spot. In fact, perc contamination tends to get worse over time. It is persistent in the subsurface and it moves in groundwater, which ultimately means that what might have been a smaller issue in the past, could end up being a much larger issue in the future. This is why stakeholders in property transactions that don’t directly involve your property could uncover your perc contamination if they want to buy a property located adjacent or nearby where environmental impacts may have migrated across parcel boundaries. I understand that drycleaners feel that they have a target on their back, but ultimately, human health is at risk. It’s the reason why regulatory standards exist and tend to get more stringent over time. In the past, the standard for Phase I ESAs used during commercial property transactions to predict the likelihood of environmental impacts had focused primarily on releases of hazardous substances to soil and groundwater. Groundwater impacts can migrate a fair distance beyond property boundaries, so even real estate deals being conducted a block or more away may prompt a look in your direction. Also, with the increased concern regarding vapor intrusion issues, the number of people looking toward a potential source of solvent releases, like current or past drycleaners, has also increased.

Learn why perc contamination is so challenging to clean up

HOW OLD INSURANCE CAN HELP MAKE ADDRESSING ENVIRONMENTAL LIABILITIES EASIER
I’ve spoken with a number of drycleaners who at this point would rather put off buying or selling just to avoid having to look into the possibility of environmental issues, or frankly, they don’t want to believe there could be an issue at their property in the first place. I totally get this! It can be scary to consider whether there might be an expensive liability looming overhead or rather, down below. Especially given how the past year has treated the drycleaning industry, the thought of a possible one-million-dollar cleanup is the last thing that any drycleaner needs. The frequently forgotten saving grace is that there could be historical insurance assets that could help offset those costs. If you, or a predecessor, has old commercial general liability (CGL) policies, you can likely get some or most of the costs associated with environmental cleanup taken care of. Which of course is a win-win: 1) you’ll minimize your own out-of-pocket expenses, 2) you can take care of the environmental problem without leaving it for someone else to have to figure out and pay for it. This of course, would translate to “gently and cautiously waking that sleeping dog” but it would certainly be a fair trade knowing that there could be some funding available to you for taking care of that dog once he is awake.

There is no guarantee that every subsurface environmental release of hazardous chemicals is going to be discovered. Past or present drycleaning operations, especially those where perc was or is used are highly associated with environmental releases and are most commonly identified as reasons to perform subsurface sampling during property transactions, along with gas station sites. With the past changes and possible future changes to the environmental due diligence process and the continuing concerns about vapor intrusion, the odds are getting even higher that most former and currently operating perc drycleaner sites will be investigated at one time or another. Have a look at whether you may fit the definitions presented above as being liable for an environmental problem, pull together your property’s transaction history, look and see if there is a “For Sale” sign on that commercial property in your neighborhood, look into historical insurance assets that might help pay for possible investigation and remediation activities, and get some professional advice.

If you’re about to start the real estate transaction process or near someone who is, and you’re concerned about potential liabilities contact us today.

As seen in Cleaner & Launderer

 

TIPS FOR DRCLEANERS FROM A DECOMMISSIONING EXPERT

BY: JEFF CARNAHAN AND JEFF DUNN

Keeping in step with recent articles related to hot topics of the day, this month I decided to reach out to a friend who knows the ins and outs of decommissioning a drycleaning plant. Jeff Dunn with Machinex in Cincinnati, Ohio will talk us through the process, and I’ll add-in some commentary about environmental things to be aware of.

UNDER WHAT CIRCUMSTANCES DO DRYCLEANERS DECOMMISSION THEIR PLANTS?
JEFF DUNN: Changes in business, the economy and in your life can lead you to consider decommissioning your drycleaning facility. Be it planned retirement, downturns due to COVID-19, new opportunities, slow business, or the need for a larger place due to expanding business, putting together a plan to decommission your plant is important. Knowing what to expect and what to plan for will save you time and money.

HOW MUCH DOES IT COST TO DECOMMISION A DRYCLEANING PLANT?
DUNN: Each situation and every store is different so the cost to have this work done by a third party will vary from $1,000 to $25,000 or more depending on the scope of work, location and size of the facility, the number of pieces of equipment and the solvent. If you have the technical skill to do certain things, you can bring in service technicians, distributors or riggers to do specific portions of the decommissioning and reduce the overall cost.

WHAT IS THE PROCESS FOR DECOMMISSIONING A DRYCLEANING PLANT?
DUNN: There are three primary elements involved in a plant shutdown:

1. Landlord & Lease Concerns
2. Equipment: Disconnecting/Removal/Disposal
3. Safe Chemical and Solvent Disposal

STEP 1: YOUR LANDLORD AND LEASE
Unless you own a free standing building you will first have to coordinate a plant decommission with your landlord. Coordinate with the landlord on the timing of the shutdown and the precise conditions they have stipulated the space to be in. Most of this will be covered in your lease so carefully reviewing the lease conditions and expectations of the landlord will be the first step in insuring a smooth departure free of legal ramifications.

JEFF CARNAHAN: EnviroForensics and the law firm Davis Kuelthau in Milwaukee gave a recent webinar on How to Terminate or Renegotiate Leases for Dry Cleaners. The recording is available on our website. Check it out.

STEP 2: EQUIPMENT REMOVAL / DISPOSAL
DUNN: You will be responsible for removal of all equipment. If there is a residual value to your equipment this will have a big impact on your planning and the time required to vacate the premises.

Be prudent when valuing your equipment if you plan to sell it. Due to economy, many cleaners have closed, and others are reducing their footprint. This means that there are plenty of pieces of good used equipment on the market. So be honest with yourself, anything with 15 or 20 years of age will be of little value despite the wonderful years of service it has provided and the impeccable condition in which you have maintained it. In most cases what you think it’s worth is at least twice as much as reality. You also have to factor in timing. If you have to be out in 30 days, you should price it aggressively otherwise you may still have it and either have to move it to storage or junk it.

Basic questions of logistics apply for equipment removal:

• Do you have door openings large enough for the largest piece of equipment to come out?
• If not, do you have windows or doors that can be removed to get equipment out?
• Will you need to have windows removed and for how long? Can I secure the store for long enough with windows/doors removed to get the equipment out?
• Is there adequate room in the parking lot to remove and stage the equipment as it comes out?
• Do you need to coordinate the time and parking space needs with the landlord?
• Do you have a licensed electrician or knowledgeable technician available to disconnect the electrical from your equipment and safely secure and or remove the wiring back to the electrical panel?

Drycleaning Machines
Preparation is particularly important if your drycleaning machine solvent is perchloroethylene (Perc), due to its hazardous nature. But other solvents should also be handled in a safe manner. All solvent, waste, carbon and filtration should be removed from the machine. Transporting a drycleaning machine with any solvent in it is not recommended and certainly not with perc which would be illegal.

CARNAHAN: Here is where things have the possibility of going wrong from an environmental standpoint. I have seen contamination issues resulting from improperly transferred or stored Perc during decommissioning. It is a hazardous waste and must be managed as such, by law, as JD mentions. I’ve also seen empty drycleaner spaces with drums of solvent left behind after the operator left town. This is a dangerous situation because an empty store invites trouble. I was involved in a case once where someone broke into an empty, decommissioned drycleaner store with drums of waste Perc left inside and they turned them all over for fun. Guess who got the blame and had the ultimate responsibility for that?

DUNN: If the drycleaning machine is to be resold, there is a long list of things that need to be done before the boiler, the air compressor or the electric is shut off. There isn’t room to go into that topic here but contact Mechanix and we’d be glad to share it.

If you are going to dispose of the drycleaning machine, most scrap metal companies will want to see a clean dry machine with all tanks and doors open, filters and carbon removed, and refrigerant lines cut (following removal of the refrigerant).

CARNAHAN: If residual solvent is left in the machine and a scrap metal company accepts it, you may not yet be off the hook. If you aren’t the only person they took dirty equipment from, they could have a contamination problem of their own. It is common at regulated cleanup sites like scrap metal processors and landfills, for the regulatory agency to demand a list of all their customers. With this list, the agency starts making demands for a portion of the cleanup costs.

DUNN: Chillers
Chillers can also require special handling depending on their configuration. You may need to evacuate the chiller of refrigerant in a similar manner to the drycleaning machine.

Boilers
Depending on the age of your boiler, you may have mercury switches in the boiler which, if disposing of the boiler, will have to be removed and handled separately. States and municipalities have different ways of handling mercury disposal so it’s best to get in touch with your local Environmental Quality authorities.

CARNAHAN: Note that mercury switches are also considered a listed waste by the US EPA and must be disposed of at a designated facility. Usually, they can be dropped off at a local hazardous materials collection center. Most towns have at least one.

DUNN: Presses & Finishing Equipment
Consider leaving the air on to assist in preparing presses for removal. If presses are being sold and/or shipped it is sometimes a good idea to have a qualified technician close the pressing head while the compressed air is on and then block the head closed for safer and easier transport.

Also, the compressed air can be used to assist in blowing lint and dust out the facility. Consequently, my recommendation is to keep the air compressor and the electricity on until the very end.

General Preparation and Safety
Prepping for equipment removal by making sure machines are disconnected from anchors, placed on wooden blocks when possible and prepared for quick removal is essential if you are paying a rigger or distributor to remove the equipment.

Moving heavy equipment is dangerous. In addition to having the proper knowledge of weight distribution, center points and how and where to lift, having the experience, right equipment and tooling as well as pallets, straps, chains, shrink wrap and proper packaging is very important and best left to professionals.

Valuing Your Equipment
Selling equipment to a distributor or reseller will make scheduling of your departure easier as they will decommission and remove and then store the equipment while awaiting the prospective buyer. All of these things take money and involve risk so don’t expect them to offer you what the going retail price for used equipment is. Selling to an end user direct may net you more money but there is more work and risk involved.

STEP 3: SAFE CHEMICAL DISPOSAL
Know your spotting chemicals, check your Material Safety Data Sheets (MSDS) sheets for proper handling and disposal. Use resources like EnviroForensics and your local distributor to handle this the proper way. In many cases, properly packaged spotting agents and detergents can be given or sold to other drycleaners in the area.

CARNAHAN: I want to thank Jeff Dunn with Machinex for talking with us about decommissioning a drycleaning plant. I can’t stress how important proper solvent and chemical handling is during this process. There have been many instances where spills occur, or disregarded regulations cause lasting environmental liabilities. Nobody needs the capstone event at a closed and decommissioned drycleaning plant to be a contamination incident. Please contact a trusted advisor if you have questions.

Have questions about environmental concerns that may pop up during decommissioning? Contact us today.

As seen in Cleaner & Launderer

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Jeff Carnahan, President
Jeff Carnahan, LPG, has 20+ years of environmental consulting and remediation experience. His technical expertise focuses on the investigation and interpretation of subsurface releases of hazardous substances for the purpose of evaluating and controlling the risk and cost implications. He has been a partner of the drycleaning industry for the past decade and is a frequent contributor to the national drycleaning publication Cleaner & Launderer. He is an industry leader in understanding that environmental risk includes not only cleanup costs, but also known and unknown third-party liability.

 

Jeff Dunn, Owner, Machinex
Jeff Dunn has 30 years of experience in the drycleaning industry. He specializes in Equipment sales, Facility design and Analysis, Parts Supply, and Business Consulting. Dunn owns and operates Laundry and Dry Cleaning Equipment Distributor, Machinex in Cincinnati, Ohio.