Drycleaners Archives - Page 5 of 12 - EnviroForensics | Environmental Engineering, Consulting & Remediation

Rolling the Dice for Regulatory Closure—3 Rules on How to Hedge Your Bets and Come Out a Winner

Posted on February 10, 2020March 20, 2023 by Jackie Cabrera

Environmental cleanups involve a great deal of creativity to make sure that the goals are met within acceptable timeframes, regulatory requirements, and of course, budget. The whole game plan is to reduce the amounts of contamination in the ground to levels that are deemed safe for human health and the environment should an exposure occur at some time in the future.

While a good environmental consulting firm will be able to tell you what kind of cleanup approach is most likely to be successful, they will base that opinion on their own past experience in similar situations and the published past experiences of their professional peers in the industry. Unfortunately, there is not an “off-the-shelf” approach that is guaranteed to work, so in many ways, a cleanup effort is a proverbial roll of the dice.

However, there are some consulting firms like ours who will stand behind their designs and guarantee results. Our ability to do this is due to several factors that help us hedge our bets when performing an environmental cleanup. If you follow these three rules of creating a successful cleanup plan, you can come out on top as well.

1. Experience Counts!

During my college pursuits, I had a professor who always used to say, “The best geologist is the one who has seen the most rocks”. I always took that to heart and mention it often to my peers. I’m sure it’s also true that the best cleaner is the one who has processed the most articles of clothing or textiles. Why? Because they are the ones who have experienced the most situations where challenges have come up that needed to be solved. They’re the ones who learned from each of those situations and tweaked their process to make sure that the occurrence of the same problem was minimized in the future. Each challenge is a learning opportunity, and those who have learned the most, are frequently the best.

I’ve said it before, and I’ll say it a thousand more times that when you are choosing your environmental consultant to design and implement your environmental cleanup strategy, you need to find one who has a great depth of experience with dry cleaner sites. They are the ones who will understand the nuances of Perc contamination. They are the ones who have had to decipher the subtle differences between releases from dry cleaner operations and other kinds of processes. They’re the professionals who have seen the most cleanup challenges and solved them to get the job done and achieve regulatory closure.

Get a step-by-step process in “5 considerations when selecting an environmental consultant for dry cleaners”

2. Strategically Plan Investigation to Save Money During Remediation

Let’s face it; the subsurface environment is a bit of a black box. Geologists and environmental professionals are educated and trained to interpret a wide view of conditions beneath the ground from only a handful of data collection points and samples. The more data collected during investigation phases, the better conditions are understood and the greater the odds of a successful remediation later. Remember that the process is:

Investigate the nature and extent of contamination; and
Perform the cleanup.

If the full nature and extent of contamination is not really understood, the cleanup plan has almost no chance of success. Way too often, consultants with less experience think that just because they have the contaminant plume defined in all directions, they are finished with the investigation. There are a lot more data points that need to be explored to really understand the nature of the impacts, which will also allow for a good predictive cleanup approach to be prepared. These include, in part, the naturally occurring geochemistry of the soil and groundwater, actual measurements of porosity and permeability, the calculated rate of groundwater migration across the site, the organic content of soils, the infiltration rate of rainwater down through the soils and into the groundwater, etc. These data points are where the surprises usually come during cleanup if they haven’t yet been considered.

The trick to making sure that an environmental investigation is performed correctly is to collect information needed to design the cleanup approach and retrieve that data at the same time. If the focus of the investigation is to simply determine the extent of the contamination plume, then only part of the picture is being captured. Given that situation, a separate remedial planning phase of the investigation will then have to be undertaken to get this vital information, which will likely involve going back to areas where the previous sampling has already occurred. This adds cost to the project. Because of this point, there may be hesitation to approve the remedial planning investigation, leaving the consultant to design a cleanup approach without all the necessary information.

If performed appropriately, remedial planning investigation efforts can be added for as little as a 10% increase in costs. However, if something is overlooked during an investigation and a cleanup plan is inappropriately designed because of it, the extra effort could easily double the price of the cleanup itself. If you ask a remedial contractor what causes cleanup plans to fail, they will almost always say a lack of adequate investigation data. I always ask them that, and that’s what they always say. Spend the extra 10% on an investigation, it will save you money during remediation. Period.

3. Combine Remedial Technologies

Ideally, once a cleanup begins, it ends when the remedial objectives have been met and enough contamination has been removed. Sounds simple enough. Many times, cleanup projects start very well and appear to be heading toward closure (even under budget), but the cleanup appears to stop working. This is among the challenges requiring creativity to get the last bit of contamination out of the ground. Oh sure, the first 90 to 95 percent of the contamination is removed very quickly and effectively and this makes everyone happy. But as time passes, the effectiveness of the cleanup can dwindle making everyone unhappy. The levels of contamination may continue to slowly decrease, but never quite get to closure levels under a single approach. It’s not so much that it stopped working, as it is that it reached a point where it is no longer cost-effective to continue. This happens with a lot of good cleanup technologies. So, with the clock still ticking, the money still flowing into the project, and contamination removal rates slowing, there needs to be a shift in strategy to get the job completed.

With a multitude of remediation technologies available for use, it’s important to follow a logical, yet creative path to select the right combination from the very beginning. For example, let’s say technology A is used because the level of contamination is high, and it is expected to effectively reduce the level of impact to low, but not low enough. When the removal rate of technology A slows down to a crawl, we change to technology B to treat the remaining concentrations to a lower level and achieve closure. Usually, technology B can be performed at a lower unit rate cost than technology A and therefore, project costs can also be constrained. Clearly, cost considerations are very important, but for the purpose of this discussion, the point is that it should not be assumed that using one contaminant removal technology alone is the right approach.

Dealing with the stress and cost of environmental contamination issues is bad enough on its own. Paying attention to these three rules of cleanup planning will help you avoid a bad roll of the dice and let you double down on your bet for a successful project.

As seen in Cleaner & Launderer

Jeff Carnahan, President at EnviroForensics
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 focused on being a partner with the dry cleaning industry for the past decade, and he’s a frequent contributor to the national dry cleaning 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.

7 Drycleaning Industry Predictions for the Next 10 Years

Posted on February 4, 2020March 20, 2023 by Jackie Cabrera

Disclaimer: These responses were written in January 2020 prior to COVID-19 in the United States

Drycleaning business owners are accustomed to the ever-evolving industry standards and practices – making change a way of life for drycleaners of all sizes. They are constantly applying new ways to run their businesses more efficiently and keep their loyal customers coming back. Drycleaners are learning new ways to clean stains and new fabrics, grow their business, manage marketing programs, train their staff and explore new technologies such as point-of-sale systems.

While it’s impossible to see the future, we can make educated guesses about it. In this article, we asked seven industry leaders from across the country to share where they see the drycleaning industry going in the next 10 years. Here are their predictions.

Mary Scalco – CEO, Drycleaning & Laundry Institute
“In 2030, I believe we’ll be seeing fewer drycleaning facilities. I think we will go ‘back to the future’ with larger central facilities being fed by more and more drop-off retail locations, pick-up and delivery routes, lockers, and other convenient ways to transfer the items back and forth.

I think drycleaners will continue to offer a wider variety of services in addition to drycleaning such as wash-dry-fold, commercial linen cleaning, and other diverse services. As cleaners increase the percentage of customers wardrobes that they receive for cleaning they will also see an increase of household textiles as drycleaners care for more linens, draperies, carpets, and other household items.

They will offer their services in ever more convenient ways with longer business hours, routes, drop-off facilities, and on-demand pick-up.

Point of sale systems and apps will track when garments are cleaned and send reminders to consumers much like the oil change sticker on your car. Robotics will be introduced in some capacity. Consumers, who will be more and more environmentally conscience, will continue to drive how cleaners process and package their items.”

Mark Pollock, C.P.D. – Director of Operations, Signature Cleaners and Member, Drycleaning & Laundry Institute Board
“Going forward I see significant changes to the Fabricare industry. More central plants servicing more satellite locations. Automation continuing to lessen the reliance on a shrinking labor pool. The need to provide added related services giving customers more reasons to patronize your company.”

Chuck Hempstead – Executive Director, Southwest Drycleaners Association
“It looks to me that by the end of this new decade the growing drycleaning operations will be the ones that diversify their operations – be that routes, cleaning non-traditional items like footwear, wash and fold, and simplifying the customer experience. Differentiating from one’s competitors will include emphasizing quality and mastering marketing. Also, we’ll continue to see consolidation as economy of scale is applicable to all industries.

Association membership will grow in importance to the successful companies in order for them to remain competitive. Change and opportunity occur too fast for any of us to go it alone.”

Wisconsin Fabricare Institute
“The Drycleaning Industry has seen its ups and downs over the last 40 years. I feel in the next 10 years, the Drycleaning Industry will be thriving. There will always be a need to have your fine garments dry cleaned. With all the help from outside sources, dry cleaners are doing their best in being more environmentally friendly in their cleaning process and in their packaging process. We have continuing education at our hands-on how to succeed and to keep our industry from failing.”

Tim Burke – Editor, American Drycleaner
“Many garment care owners tell me they are adding services to their operations to offer more to their clients. The most progressive minded say they will continue to keep up with their clients’ need for convenience, such as with technology. And they tell me they strive to make their operations look modern, and to always help their clients look their best. That won’t change. It’s what they do.”

Darcy Moen – Drycleaning Industry Consultant and Columnist for Cleaner & Launderer magazine
“As the baby boom demographic bulge moves through the owners of drycleaning businesses we will see a decline in the number of dry cleaners as owners retire. Many of the children of owners have moved into other careers and won’t be following in the footsteps of their parents. But as one generation moves on, I see newcomers with fresh eyes stepping in creating new ways of doing business. As the gig economy influences drycleaning and laundry services I expect to see a dramatic surge of new ‘on demand’ types of drycleaning and laundry growing.

Mass supply of lower cost of clothing has led to closets stuffed with more and more designer goods. Despite advances in laundry detergents and appliances, nobody has any more free time for cleaning and pressing clothes than they did ten years ago. In fact, with most people experiencing increased demands on their time from careers, family, and social commitments, there are fewer hours for personal fashion care than ever before. I can see huge pent up demand for cleaning services from masses of people with masses of clothes wanting affordable, quick and reliable fashion care maintenance for those mountains of clothes. The question is, who is going to do all that work? Most likely it will be done by a cleaner/launderer who can deliver a low cost and profitable service through a plant designed with efficient capacity to deliver cleaning. And by cleaning, I don’t mean a conventional drycleaning service but a hybrid of drycleaning and laundry services. I can foresee a new type of cleaner, one that focuses on delivering a crisp, clean, like new appearance but at a cost that is relative to the cost of quick fashion of today. Customers don’t care how we as an industry deliver service, just as long as their clothes are clean, pressed, looking like new and ready to wear at an affordable price with quick turn-around. The challenge of the next decade will lie in transforming plants of today into a new type of cleaning facility that can service a broader range of clothing at a price that is as affordable as doing your laundry at home while generating a profit. It’s up to us to rise to the challenge and find the solution of the magic bullet plant for the new markets that are emerging.”

Jeff Carnahan – President, EnviroForensics & PolicyFind
“In the twenty-plus years that we have been serving the drycleaning community, we have certainly seen changes in the market. Less small players, more consolidation, franchises, etc. What hasn’t changed is their hard work ethic, commitment to customer service, or comradery among peers. Regardless of how the drycleaning industry morphs in the coming years, I can’t see any of these going away. EnviroForensics and PolicyFind are proud of our association with dry cleaners and we’re honored to continue our commitment to them into the future.”

This decade will be trying for some and filled with opportunities for others. As with trends of any nature, some come and go, whereas others stay the course and become fundamentals. No matter a dry cleaner’s unique situation, they can rest assured that the entire drycleaning community is behind them and wants to see the best outcome for them.

For more drycleaner articles, visit our blog.

Emerging Contaminant Alert for Dry Cleaners: PFAS is the New Bad Guy in Town!

Posted on January 6, 2020March 20, 2023 by Jackie Cabrera

DRY CLEANERS EVERYWHERE HAVE BEEN WORRIED FOR DECADES ABOUT POTENTIAL ENVIRONMENTAL CONTAMINATION FROM THEIR PAST OPERATIONS. THROUGH THE YEARS, YOU’VE BECOME ACCUSTOMED TO THE FACT THAT PETROLEUM-DERIVED SOLVENTS AND CHLORINATED COMPOUNDS LIKE TETRACHLOROETHENE (PERC) ARE BAD IF RELEASED TO THE ENVIRONMENT. WELL, NOW THERE IS A NEW PROBLEM TO THINK ABOUT, AND IT IS CALLED PFAS.

BY: JEFF CARNAHAN

I believe that most dry cleaners were just beginning to feel like they were well-informed of the risks environmental liability contributes to their businesses, then all of a sudden came the onset of vapor intrusion (VI) issues a little over 10 years ago. It was gradual in the beginning, but at one point it seemed like dry cleaners were utterly swamped with new regulatory demands to immediately assess whether there could be VI problems emanating from their sites. Now, although still a part of environmental investigations, the VI panic has mostly subsided. As the VI exposure pathway was further studied and understood, the ultra-conservative approach initially unleashed by the regulators began to soften to a more reasonable level.

Well, there is a new bad guy in town, and its name is PFAS or perflouoroalkyl substances. It’s a big deal, and although the dry cleaning industry is in no way at the epicenter of the developing PFAS issue, dry cleaners will get involved before this is all over with. Similar to what we saw with VI, I certainly anticipate that the regulatory community will initially react with an abundance of caution as the toxicological and political process settle into a plan. There have already been incidences of dry cleaners being forced to include PFAS in their sampling plans when a solvent release is known to exist. In this article, I want to explain what PFAS really are, wherein the dry cleaning industry they may have been used historically, and how the regulatory process development has been progressing. You will need to stay aware as the toxicological study and regulatory reaction develops related to this emerging contaminant.

WHAT ARE PFAS AND WHY ARE THEY SO BAD?
Fluorosurfactants, otherwise known as perflouoroalkyl substances, or PFAS, are a wide group of engineered chemicals created to lower the surface tension of water. The various individual chemicals are created by replacing the Carbon atom on normal petroleum hydrocarbons with a Flourine atom. Essentially, anything that has been developed industrially or commercially to be non-stick, or waterproof owes its success to PFAS. Although initially created in the 1930s, the first widely used PFAS material was polytetrafluoroethylene (PTFE), which was a non-stick coating developed by DuPont that became known by its trade name, Teflon. Given the wide success of Teflon, further research and development led the way to a total of nearly 5,000 different PFAS chemicals in subsequent years. Some of the other products that were created using this group of chemicals focused on water repellency and stain resistance, such as 3Ms Scotchgard. One of the most prevalent uses of PFAS chemicals has been in the production of fire-fighting foams, especially in the air transportation industry and especially at the United States Department of Defense facilities. There have been, and still are, a very wide range of products that contain PFAS chemicals, including:

Firefighting Foam

Some grease-resistant paper, fast food containers/wrappers, microwave popcorn bags, pizza boxes, and candy wrappers

Nonstick cookware

Stain-resistant coatings used on carpets, upholstery, and other fabrics

Water-resistant clothing

Cleaning products

Personal care products (shampoo, dental floss) and cosmetics (nail polish, eye makeup)

Paints, varnishes, and sealants

PFAS compounds are one of several groups of chemicals referred to as “Forever Chemicals”. This means that they are so well-built, so to speak, that they are extremely durable and don’t break down easily. It was great for the products they are used to make, but that also makes their presence in the subsurface very troublesome now that they have been determined to be hazardous to human health and the environment. Of course, when I say “now” they are known as hazardous, I really mean that it has been known by researchers for over 20 years that exposure to PFAS chemicals is harmful to humans, but it has taken this long to get the giant commercial and regulatory ship to turn. In fact, there are estimates that PFAS compounds can be found in the bloodstream of 98% of the United States population.

HOW ARE DRY CLEANERS INVOLVED?
I’m sure that you all know better than I do, the whole host of products that have been available through the years to make textiles, rugs, and leathers waterproof and stain-resistant. Clearly, these are the primary connection between the dry cleaning industry and PFAS, although there has been some discussion regarding detergents and other additives during the cleaning process. The theory is that during the cleaning process, some of the PFAS enter the waste solvent solution. As such, anywhere there has been an environmental release of dry cleaning solvent to the subsurface, the presence of PFAS is also possible because materials treated with related products may have been cleaned at the facility. The dry cleaning operations that actually performed waterproofing would be the most at risk.

HOW ARE PFAS BEING REGULATED?
Once released into the subsurface, PFAS chemicals are highly resistant to breakdown and are very soluble, and as such, they can migrate quite far in the groundwater. Drinking water supplies are of primary concern to the Federal and State environmental regulators. The U.S. Environmental Protection Agency (US EPA) has established health advisories for two of the most prevalent PFAS chemical contaminants, called PFOA and PFOS, based on the agency’s assessment of the latest peer-reviewed science. These advisories will provide the most up-to-date information on the health risks of these chemicals and aid drinking water system operators and state, tribal and local officials in making determinations as to the appropriate steps needed to address PFOA and PFOS in their communities.

Infographic explaining what the EPA is doing to regulate PFAS — The EPA has established PFAS measurement methods, issuing drink water health advisories, supporting site-specific challenges and providing tools and information so communities can better understand processes and procedures. Courtesy: epa.gov/pfas

The EPA’s assessment indicates that drinking water with individual or combined concentrations of PFOA and PFOS below 70 parts per trillion (0.07 micrograms per liter ug/L) is not expected to result in adverse health effects over a lifetime of exposure. Current studies indicate that exposure above these levels in drinking water could increase a person’s lifetime risk of several types of cancer, immune system dysfunctions, or developmental disorders.

One of the primary concerns about PFAS, given its widespread use and known releases to the environment, is its impact on the country’s drinking water supply. Although the US EPA issued its PFAS Action Plan on February 14, 2019, many states have expressed frustration with the EPA’s proposed plan and have started the process of regulating PFAS in drinking water themselves. As we saw the vapor intrusion regulation process evolve, some states have moved forward with their own versions of regulations and standards that present significant challenges to impacted industries.

WHAT CAN I EXPECT?
From the environmental consultant’s perspective, I see this playing out very much as VI did in the 2000s, as I mentioned. As new toxicological studies are completed by those agencies to whom the US EPA relies upon to make their policy and regulations, there will be an ongoing debate in Washington D.C. This is certainly to be expected since PFAS chemicals have become such a large industry, the regulators will want to make sure they respond appropriately. There is a very large amount of money at stake, and a misstep that leads to over-regulation could create a huge financial crater in the US manufacturing, commercial and retail, and insurance sectors. As a business owner, I’m sure you can understand that perspective.

We have already seen some of our dry cleaner clients with known subsurface releases of Perc being asked by the state regulatory agency to start looking for PFAS as well. We’ll just have to keep an eye on regulatory developments across the states this coming year. In the meantime, it would definitely be worth the time to consider how PFAS could be associated with your past operations.

The good news is that subject to the same limitations I have written about many times, your business’ old commercial general liability (CGL) insurance policies could be used to pay for the investigation and cleanup of PFAS, if they are identified, just like Perc. Most of the time, however, if you are going to find PFAS, you will already have a solvent release problem.

The main impacts of this PFAS issue will be to draw even more dry cleaners into the regulatory process and to increase the cost of environmental investigation and cleanup. Instead of seeing it as another blow to the dry cleaning industry, you could see it as another reason to sit up and take notice of your potential environmental problems.

Have you been asked to include PFAS in your environmental sampling? Share your thoughts.

Contact EnviroForensics, the dry cleaning industry’s most trusted environmental consultant.

As seen in Cleaner & Launderer

The History of Dry Cleaning Solvents and the Evolution of the Dry Cleaning Machine

Posted on December 16, 2019 by Alex Miller

DRY CLEANING HAS BEEN AROUND SINCE THE 1600S AND HAS BEEN A RELIABLE WAY TO GET CLOTHES CLEANED EVER SINCE. CHEMICAL-BASED SOLVENTS TOOK OFF IN THE 1800S, AND THE CONVERSATION ABOUT INDUSTRY BEST PRACTICES AND LONG-TERM IMPACTS ARE HOT TOPICS TODAY.

BY: DRU CARLISLE

Perchloroethylene, also known as perc, has been around for nearly a century and it’s still the dominant solvent used by U.S. dry cleaners compared to hydrocarbons or alternative solvents like GreenEarth.

However, the number of dry cleaners using perc has started to go down. From the 1970s to 1990s a barrage of increasingly stringent rules and regulations covering dry cleaning operations and the use of perc, past and present took place. Over the past few decades, 80-85% of dry cleaners in the U.S. used to use perc. Now, about 60-65% of dry cleaners use perc and the rest now use hydrocarbons (20-25%) or alternative solvents (15-20%).

Timeline of drycleaning solvent usage between 1600 and today — Here’s a timeline of dry cleaning solvent usage. Inventors and industrialists experimented with kerosene and gasoline-based cleaning through the 19th century. In fact, dry cleaning as we know it was discovered by Jean-Baptiste Jolly on accident when a kerosene lamp was spilled on a linen tablecloth in the late 1800s. As you can imagine, washing clothes inflammable liquid was not ideal. An American dry cleaner, Wiliam Joseph Stoddard, is credited with developing the first non-gasoline-based solvent but it was Michael Faraday, a prominent chemist, who discovered tetrachloroethylene, also known as perchloroethylene or “perc” which has been a solvent favorite for 80 years.

Perc is well-liked by dry cleaners because it is much more effective and quicker to use than hydrocarbon cleaning, which takes 75% more time to do the same cleaning that perc does for clothes. With these efficient attributes, it’s no wonder that perc has stayed as a popular choice for so long.

However, there are some downsides to using perc for dry cleaning:

Perc is a very strong chemical, which is what makes it a great cleaning solvent, however, it can easily seep into the soil and groundwater beneath a dry cleaner with a few minor spills causing serious contamination issues. Additionally, perc doesn’t naturally degrade over time and without treatment perc will actually sink deeper and spread out farther, which creates a large plume of perc contamination.
The historical perc regulations didn’t instruct the industry to handle and dispose of the chemical safely, which is a heartbreaking story because dry cleaners were following the proper regulations at the time, but they’re now on the hook for the contamination.
Perc dry cleaning machines are expensive and can cost $60,000-$80,000, which is why they are a big expense for dry cleaners and are not replaced often. Additionally, the perc machine was considered to be an investment and an asset. Therefore, if a dry cleaner can’t afford a new machine nor sell their old perc machine, then they are most likely still using a Perc machine instead of a machine that can use alternative solvents.

THE EVOLUTION OF THE DRY CLEANING MACHINE

Now that we’ve covered the history of dry cleaning solvents, we’ll dive further into the evolution of the dry cleaning machine.

The dry cleaning machine as dry cleaners know it has gone through multiple generations of functionality and use. First, there were wet to dry machines, then dry to dry machines, then the current machine on the market, closed-loop machines. The different machine generations solved operational issues for dry cleaners and helped them use their dry cleaning solvents more effectively.

1ST GENERATION MACHINE

1st generation drycleaning machine with separate washer and dryer — Wet clothes were transferred between the washer and dryer. Some systems did incorporate a separate vapor recovery unit, utilizing either a carbon bed or water cooled coils. Image Courtesy: Wauwatosa, Wisconsin

2ND GENERATION MACHINE

2nd generation drycleaning machine with combined washer and dryer — In the first dry-to-dry machines or second-generation machines, vapors are vented to the atmosphere from the machine washing drum when the machine is opened after the drying cycle. Again some machines utilized either a carbon bed or water-cooled coils. Image Courtesy: Newtone Drycleaners

3RD GENERATION MACHINE

3rd generation light blue drycleaning machine — These were the first “closed-loop” machines. The vapors from the dryer are routed to a refrigerated condenser for solvent recovery. Image Courtesy: Böwe Textile Cleaning

4TH GENERATION MACHINE

Image #4 alt-text: Back view of 4th generation drycleaning machine — These closed-loop machines utilize both refrigerated condensers and carbon adsorbers to recover solvent vapors. Reducing the vapor concentration in the wheel to below 300ppm. Image Courtesy: Wauwatosa, Wisconsin

5TH GENERATION MACHINE

5th generation drycleaning machine — In addition to a refrigerated condenser and carbon absorber, these closed-loop machines have inductive fans and sensor-actuated lockout device that will not allow entry to the machine door, button trap, or filters until solvent vapors in the machine are below certain levels (generally 300 parts per million (ppm)). Image Courtesy: Oasis Max Clean

Dry cleaners are keenly aware that the use of perc has become as heavily regulated as nearly any other industrial chemical to date, and some have started to switch over to hydrocarbon or alternative solvents. As mentioned earlier, changing machines is a costly endeavor for dry cleaners and it’s understandable why they would prefer to keep using perc compared to other solvent options, such as hydrocarbon and alternative solvents like GreenEarth, K4, Sensene and wetcleaning.

While dry cleaners evaluate different solvent options and their future business plans, it’s important to prepare for addressing an environmental issue if it’s placed in your lap. The costs of addressing environmental contamination without funding though historical insurance can range up into the hundreds of thousands, sometimes even millions, which is why we recommend using insurance archeology, which is a small fraction of that cost, to locate insurance assets that can be used to cover the necessary environmental and legal costs associated with a cleanup. Being proactive means that you are in command of the situation and by being in front of the issue, you will save yourself a lot of stress and money.

As chlorinated solvent experts, we’ve helped hundreds of dry cleaners navigate their environmental concerns with little to no out-of-pocket costs to them. Our goal is to help our clients get out of a challenging situation without a large financial burden. We understand how challenging this process can be for business and property owners and have successfully helped our clients navigate through these often uncharted waters.

Want to hear what our clients think? Hear from our dry cleaning clients and get an inside perspective on their environmental challenges.

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.

Understanding remediation strategy: Environmental contaminant removal vs environmental risk management

Posted on December 16, 2019March 22, 2024 by Jackie Cabrera

A shortsighted view during environmental remedial planning can make it tempting to favor short-term over long-term savings for dry cleaner cleanups. However, when looking at the entire cleanup process and all associated costs, the need to balance present-day cleanup efforts with anticipated future costs becomes far more important.

With perchloroethylene (Perc; PCE) and other chlorinated solvents, the threat of future exposure does not readily go away. These lingering contaminants may present serious problems for future environmental cleanup costs and long-term environmental liability.

In this article, I’ll share why it’s important to work with an environmental consultant who understands the value and significant cost savings that can be realized by choosing a more active remedy instead of long-term stewardship.

The strategic options for eliminating contamination exposure pathways and attaining regulatory closure can have vastly different costs when it comes to future liabilities and long-term stewardship that will be required following regulatory closure. For example, source removal can be a relatively large short-term expense compared to a vapor mitigation system. In fact, that same vapor mitigation system might end up costing far more over time than source removal if the system is not properly maintained or the building on which it has been installed remains in use for a long time without any meaningful remedy to the contaminant source.

Look at the total lifecycle cost when planning your remedial strategy

Post-closure monitoring, legal risk, and administrative costs really add up over time. When dealing with environmental issues, regulatory closure is often seen as the end goal. While regulatory closure can be attained through various strategies, most revolve around the elimination of exposure pathways, at least in part. Regulatory agencies typically prefer a remediation strategy where a large amount of contamination is removed, but when push comes to shove, they usually will approve remedies with little or no contaminant reduction if the risk of exposure to people is controlled. Because of this, it has become increasingly clear that regulatory closure should be viewed as only an interim milestone when dealing with contaminated properties.

Proper cost-analysis that takes all these factors into account can help you find a balance between short-term and long-term costs and make decisions that are right for you. There is a reverse relationship between money spent on immediate cleanup versus the costs of stewardship and the often-overlooked component of potential legal damages resulting from dry cleaning contaminants left behind. The demand of cash-flow considerations in most businesses, especially small businesses like dry cleaners, can really drive decisions regarding remedial planning. By looking at the total lifecycle cost during the decision-making process and attempting to keep your sights on the longer game, it could save hundreds of thousands of dollars over time.

Whether we’re treating the contaminants in soil, groundwater, or vapor directly or implementing a mitigation system to cut off the pathway, the goal of any environmental remedial strategy is to eliminate exposure.

Understanding the decisions in selecting an environmental remediation strategy

The following case studies provide a helpful guide for property owners, developers, and environmental professionals to consider when evaluating remedial efforts vs. long-term stewardship. The cases outlined are actual sites where EnviroForensics was involved in recommending and then implementing an effective remedial plan and ultimately saving both time and money in addressing the environmental contaminants of concern.

The costs of future legal liability included in our case studies below were estimated by experienced attorneys who performed an analysis taking court cases nationwide and assigning a higher cost component for prevalent claims in similar cases. Alternatively, in a situation where claims were not made, they assigned estimated damages to parcels that may be potentially affected. The cost examples presented are case-specific and subject to margins of variability.

Case Study 1: A Dry Cleaning Site Uses Enhanced Reductive Dechlorination (ERD) Approach to Achieve Site Goals and Lower Lifecycle Costs and saves $420,000

This dry cleaning site had PCE contamination that extended beneath several buildings, including residential property impacts that were present in the soil, and exceeded direct contact thresholds and the migration groundwater standards. The groundwater plume was also expanding and contributed directly to vapor intrusion (VI) exposure issues. VI mitigation was necessary for both the source area and at downgradient residential structures.

These were the two remedial strategies considered.

Remedial Strategy A:

Impacted soil would be excavated to promote future contaminant plume stability
Institutional controls would be implemented to cut off exposure pathways from the groundwater. Institutional controls typically consist of groundwater usage restriction (i.e. no drinking water wells allowed) but requirements vary from state to state
VI mitigation would be installed and maintained

Remedial Strategy B:

Impacted soil would be removed
Groundwater plume would be treated in situ via amendment injections

Comparing the two strategies, the upfront cost of Strategy A is lower as there is no cost associated with groundwater treatment. However, as can be seen in the cost analysis of Strategy B, by removing the groundwater contaminant reservoir, the cost of groundwater monitoring and VI mitigation are eliminated. Future liability is also significantly reduced because exposure pathways to outlying properties would be cut off.

The Results

Based on projected cost savings, the client chose to implement Strategy B and long-term VI issues were eliminated by virtue of removing the groundwater impacts, and short-term VI mitigation implementation where there were known exposure pathways. Shortly after the remedial injections, PCE concentrations across the site sharply decreased while, as expected. While remediation is ongoing, post-injection PCE concentrations have remained at non-detect.

The total cleanup costs, including investigation and remediation efforts, was $1,450,000. By spending $200,000 upfront to remediate the groundwater, the client avoided long-term expenditures and achieved a lifecycle cost savings of $420,000.

Case Study 2: A Multi-Residence Site’s Remedial Approach Mitigates Vapor Intrusion and Saves $250,000

This multi-residence site had a large soil gas plume located deep in the soil. The contaminant plume was under a seven-story multi-family residential unit onsite and several residential buildings offsite. There was significant contamination onsite and the soils held very high vapor concentrations. There were complete VI exposure pathways at numerous offsite properties with basements, so interim measures were installed to mitigate risk during the investigation process.

No matter your situation, we’re ready to find the best solution for you. Contact us today.

As seen in Cleaner & Launderer

5 reasons why dry cleaners are joining the Drycleaning & Laundry Institute

Posted on December 2, 2019 by Alex Miller

I’VE WORKED CLOSELY WITH DRY CLEANERS DURING MY 10-YEARS WITH ENVIROFORENSICS, AND DURING THIS TIME THE WELL-BEING OF THE INDUSTRY HAS BECOME A PASSION OF MINE. UNFORTUNATELY, MY DRY CLEANING FRIENDS HAVE OBSERVED A DECLINE IN DRY CLEANING OPERATIONS ACROSS THE COUNTRY AND THEY THINK THIS IS A TREND THAT MAY CONTINUE.

BY: DRU CARLISLE

Dry cleaners have noticed that people don’t wear clothes that require dry cleaning as they did years ago – workplaces don’t require day-to-day business professional attire, society has become lax in what is “acceptable” dress for public outings, articles of clothing no longer have tags recommending dry cleaning as the cleaning method of choice, etc.

This is why dry cleaners have been discussing the importance of adapting their businesses to remain successful, and therefore, I believe it’s important to share resources that can help dry cleaners do just that.

The Drycleaning & Laundry Institute (DLI) has been the premier trade association and voice for this industry since 1883, and since their inception, DLI has worked hard to provide its member base all the tools necessary to aid in running a successful, professional operation.

It’s not just the educational opportunities and professional training they provide that help business owners give their clients top-of-the-line garment care and the best practices available for the industry, but it’s also the benefits DLI offers its members.

Both Budget and Silver membership levels come with industry news, discounts, and experts available on-demand to answer technical questions. Additionally, with a DLI membership, you automatically get a membership with your local regional association for free. These alone are great benefits, but it’s the additional benefits of the Silver level membership that can really set a dry cleaner apart from their competition.

Here are five reasons why dry cleaners are joining 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.

In my opinion, the website and customer outreach services are worth the upgrade to a Silver Membership because these services offer invaluable hands-off marketing that is designed to give an online presence for the cleaner who doesn’t have the time (for less than $1,000 annually, I might add). Website design can be expensive and social media maintenance can easily fall by the wayside when you’re already tied-up with running your business. We live in a digital world and prospective clients look for businesses online – if you don’t have an online presence you can easily be overlooked and miss out on new business.

It’s important for dry cleaners to periodically ask themselves what they are doing to help their business. It’s easy to get sidetracked by employee retention issues and day-to-day operations (which of course, are very important), but 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.

What is a Phase I and a Phase II Environmental Site Assessment?

Posted on December 1, 2019 by shenshaw

MOST DRY CLEANERS HAVE HEARD THE DREADED PHRASE FROM THEIR COLLEAGUES, “THEY DID A PHASE I.” FROM THIS POINT ON, DRY CLEANERS ARE LEFT WAITING ON PINS AND NEEDLES TO HEAR WHEN THE RESULTS WILL BE READY. IN THIS ARTICLE, I’LL EXPLAIN WHAT YOU CAN EXPECT DURING A PHASE I AND A PHASE II ENVIRONMENTAL SITE ASSESSMENT.

BY: STEVE HENSHAW

WHAT IS A PHASE I ENVIRONMENTAL SITE ASSESSMENT?
A Phase I Environmental Site Assessment (ESA) or Phase I ESA, is short for a study conducted on a property to evaluate the likelihood of environmental contamination. There is a standard that must be followed under the American Standard for Testing and Materials (ASTM) to satisfy an All-Appropriate Inquiry (AAI), which is the process of evaluating a property’s environmental condition and assessing potential liabilities for any contamination. This is also under Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).

The thing about conducting a Phase I ESA on real estate that has a dry cleaner is that invariably, because of the history of dry cleaning operations, a Phase II ESA is nearly always required as follow-up. In other words, one can be certain that if a property has an active or historical dry cleaner on the site is being considered for refinancing or purchasing, follow-up soil, soil gas or groundwater samples will likely be required.

Download a questionnaire to begin collecting helpful information about your dry cleaning property.

WHAT IS A PHASE II ENVIRONMENTAL SITE ASSESSMENT?
This is a follow-up sampling called a Phase II ESA. While this common terminology is not accurate, it does convey a step further in the process of determining whether a dry cleaner has affected a piece of property. The Phase II ESA, also referred to as a “subsurface investigation” or more commonly “site investigation,” typically consists of collecting a series of soil, soil gas, which includes sampling for vapor intrusion, and groundwater samples and sending the samples to a laboratory to determine if dry cleaning operations have impacted the property negatively through environmental contamination.

Phase II ESAs initial soil and groundwater samples are collected at a few locations where the highest likelihood of releases has likely occurred. These samples can be collected by hand using hand-held equipment, or by small to large drilling rigs. The type of equipment used depends on the types of soil and depth of groundwater at the site, and whether the samples are collected from underneath the building or outside. These areas are typically current and former dry cleaning machine locations and/or dry cleaner solvent transfer locations. Once collected, the samples are then sent to a laboratory to determine how much, if any, dry cleaner solvents are present in the soil and groundwater. If impacts are present, additional soil and groundwater samples are collected at more locations until the entire area of soil and groundwater contamination has been determined. This process may take several months. Once the extent of soil and groundwater contamination has been determined with Phase II ESA activities, remediation activities can begin.

HOW MUCH DO PHASE I ESAS AND PHASE II ESAS COST?
While a Phase I ESA costs are generally low and predictable, Phase II ESA costs vary by many factors. Some of these factors are “site specific.” For example, the types of soil and depth to groundwater at the site, the length of dry cleaner operations, and even prior operations will influence the cost of a Phase II ESA. Other factors include the reason for conducting a Phase II ESA. For example, if the dry cleaner is thinking about refinancing, the Phase II ESA may consist of the fairly simple question, “Is my site affecting the environment?” If the desire is to know the costs to reach site closure, the cost of a Phase II will be higher than the first question.

The biggest cost factor associated with a Phase II ESA relates to the experience of the consultant chosen and their attention to the needs for the Phase II. One of the first needs is to consult with the dry cleaner on what the goals are, what the needs could be, and the costs associated with the range of possibilities for an initial Phase II ESA. The dry cleaner needs to understand what will be completed and for what cost, what the potential downsides are, and what makes the most sense for their situation. In order to do that well, your consultant needs to have experience with your business, business and technical savvy to understand the situation, and finally, the sense to know if there are other sources of funding that can eliminate or, at least, ease the cost burden.

Phase I ESA costs generally range from $1,000 to $2,500 while Phase II ESA costs vary as summarized above. Typically, a Phase II ESA can cost anywhere from $5,000 to well over $100,000. Phase II ESA initial sampling activities (to determine if there is a problem) usually cost around $5,000.

The success of the experience is tied to communication of needs and matching effort to the needs. The most important variable under the control of the owner is to pick a qualified, responsive consultant.

No matter your situation, we’re ready to find the best solution for you. Request a quote today.

As seen in Cleaner and Launderer

Stephen Henshaw, Founder at EnviroForensics & PolicyFind  has over 30+ years of experience and holds professional registrations in numerous states. Henshaw serves as a client manager and technical manager on complex projects involving contaminated and derelict properties, creative litigation, deceased landowners, tax liens, non-performing banknotes, resurrecting defunct companies and cost recovery. Henshaw’s expertise includes a comprehensive understanding of past and current industry and waste handling practices and the fate and transport of chlorinated solvents in soil and groundwater. He has served as a testifying expert for plaintiffs and defendants on high profile cases involving causation and timing of releases, contaminant dispersion, allocation, damages, past costs, and closure estimates. He has a strong knowledge of state and federal regulations, insurance law, RCRA, and CERCLA. He has managed several hundred projects including landfills, solvent and petroleum refineries, foundries, metal plating shops, food processors, dry cleaners, wood treating facilities, chemical distribution facilities, aerospace manufacturing facilities, and transporters and provides strategy instrumental in funding projects and moving them to closure.

7 Things to Know About Using CGL Policies with State Cleanup Funds

Posted on November 20, 2019March 22, 2024 by Alex Miller

ADDRESSING ENVIRONMENTAL ISSUES FOR A DRY CLEANING BUSINESS CAN GET EXPENSIVE. TO HELP DEFRAY THE COST, SOME STATES HAVE CLEANUP TRUST FUNDS FOR DRY CLEANERS TO PAY INTO AND EVENTUALLY USE. AS OF NOVEMBER 2019, THOSE STATES ARE ALABAMA, CONNECTICUT, ILLINOIS, FLORIDA, KANSAS, NORTH CAROLINA, OREGON, SOUTH CAROLINA, TENNESSEE, TEXAS, AND WISCONSIN.

BY: DRU CARLISLE

While it would be ideal to rely on these funds alone to pay for necessary investigation and remediation services, it’s not always the most viable option because while there are certainly strong funds still in operation, we have seen that some funds are considering sunsetting, and with others, reimbursement payments are being delayed.

Another or additional solution for dry cleaners is to track down their historical Commercial General Liability (CGL) insurance policies. By locating these policies, a dry cleaner can use them as assets (money) to help cover the costs associated with environmental investigations and cleanups, such as investigation, remediation, and legal fees. We’ve been assisting dry cleaners in states with and without trust funds through this process for over two decades.

Here are some common questions we hear from the dry cleaning community about state cleanup funds.

1. WHAT CAN DRY CLEANERS IN STATES WITHOUT ADEQUATE CLEANUP FUNDS DO TO GET HELP WITH FUNDING THEIR CLEANUPS?
The first thing that a dry cleaner should do is look for all of their old insurance policies. Typically, the older the policy, the fewer restrictions they have regarding covering environmental contamination claims. Generally, we need policies that were issued before 1985. Dry cleaners should look through all old bank records, and write down the name and company of all insurance brokers they have worked with. Secondly, they should jot down a history of when they started at the location, who they purchased insurance from, what types of stores were at that location (or adjacent) and what other insurance was part of the property. They will also need to identify whether or not there was a previous dry cleaner who may have caused or contributed to contamination. Finally, we recommend not moving forward without expert advice. Often times if a dry cleaner launches into a cleanup without notifying insurance carrier(s), they will not be reimbursed for money spent on the site investigation and cleanup.

2. WHY ARE INSURANCE CLAIMS SO SIGNIFICANT IN TRIGGERING INSURANCE COVERAGE?
Making a valid claim to your carrier can mean the difference between paying hundreds of thousands of dollars for a site cleanup compared to paying a small amount for startup costs like. In most instances, a valid claim made to an insurance company will be defended. Among other things, this defense can include legal fees and site investigation activities.

3. SHOULD A DRY CLEANER PAY OUT-OF-POCKET EXPENSES FOR A CLEANUP THEN LATER TENDER A CLAIM TO RECOVER THAT LOSS OF EXPENSES?
Depending on the state, it is common for an insurance carrier to decline paying costs incurred before a claim was tendered. We have had several clients that spent money on investigations and cleanups, but were only reimbursed a fraction of their costs because the insurance carriers felt they could have managed the work differently and cheaper.

4. IF A DRY CLEANER IS WAITLISTED FOR A CLEANUP FUND, CAN HE OR SHE PROCEED WITH THE SALE OF THE BUSINESS? WILL THE VALUE OF HIS OR HER BUSINESS BE ADEQUATELY PROTECTED?
In many states that have cleanup funds, a prospective purchaser agreement (PPA) will allow a property transaction to proceed prior to a regulatory release and sign off of no further action. However, a PPA generally does not remove any contingent liabilities associated with the dry cleaning site; but instead delays the inevitable site investigation and potential cleanup. It also allows the purchaser more time to discover any additional problems that the seller’s are often responsible for.

Furthermore, the involvement of a dry cleaner in a fund does not remove any contingent environmental liabilities from the site itself, nor does it fully protect the dry cleaner from any potential actions that might arise from contamination. These issues could include diminished values to property or to other properties that might be affected by contamination coming from the site. Also, the cleanup funds do not fully protect a dry cleaner from a citizen or third party suit associated with contamination coming from his/her site.

Learn how to sell your dry cleaning business in three steps

5. HOW CAN DRY CLEANERS IN STATES WITH CLEANUP FUNDS EVALUATE WHERE THE BEST FUNDING IS FOR THEM?
Such funds may best be used for either actual cleanup efforts, known as remediation, for which insurance dollars are generally more difficult to recover, or for sites at which such insurance dollars or other responsible parties cannot be identified. Cleanup fund dollars may also provide seed money to perform any insurance archaeology or pay for other efforts that can identify where dollars for cleanup may be found. The bottom line is that a fund with enough money to pay for cleanups is a good thing. However, the problem is that most states do not have enough money in the fund to cover the necessary cleanups at this time.

6. WHAT WOULD BE AN IDEAL SITUATION FOR A DRY CLEANER WHO HAS ACCESS TO A STATE CLEAN-UP FUND AND INSURANCE COVERAGE?
An ideal situation is a fund that allows dry cleaners to pursue any and all avenues to bring dollars to the table and be available as a safety net for cleaners that do not have other avenues to pursue. Ideally the fund would be used to seed initial efforts, such as finding insurance dollars to bring to the table. We have had situations where the historical insurance paid the deductible required by the fund, the fund monies kicked in and the insurance addressed dollars above the fund limit.

See how one dry cleaner’s state funding challenges were solved by insurance archeology

7. WHY SHOULD DRY CLEANERS FEEL CONFIDENT ABOUT THEIR ABILITY TO FIND HELP WITH CLEAN-UP WHEN STATE CLEANUP FUNDS ARE NOT AVAILABLE OR ARE NOT FINANCIALLY ADEQUATE?
Our experience has been that dry cleaners, particularly dry cleaners that have been at their site since at least the early 1980’s, have an excellent opportunity to get the site investigation and remediation paid for by either their old insurance companies or other responsible parties. We have even conducted individual site investigations costing over $2,000,000 at no cost to individual dry cleaners by using liability insurance policies from the 1980’s to pay for contamination problems. After successfully working on over 200 dry cleaning sites nationwide, we have helped settle over $500,000,000 in insurance coverage claims, including individual projects in excess of $44,000,000. There’s no reason why contamination has to destroy the value of a dry cleaning business when there are viable solutions available.

To find out if historical insurance assets are an available funding avenue for you, contact us for a confidential consultation.

How to Sell Your Dry Cleaning Business in Three Steps

Posted on November 18, 2019March 22, 2024 by Alex Miller

ENVIROFORENSICS AND EHRENREICH & ASSOCIATES DISCUSS HOW ENVIRONMENTAL CONTAMINATION ISSUES CAN IMPACT THE PROCESS OF SELLING A DRY CLEANING BUSINESS, AND HOW DRY CLEANERS CAN BEST PREPARE FOR THE TRANSACTION.

BY: JEFF CARNAHAN & RICHARD EHRENREICH

We’ve talked several times in this featured column about what triggers an environmental cleanup, and you likely know by now that buying or selling a property or business is the most common catalyst for environmental cleanups. While businesses are put on the market routinely, there are several factors at play today that have resulted in higher than normal transaction activity amongst dry cleaners.

THE DRY CLEANING MARKET DOWNTURN

A downturn in the dry cleaning market has been brewing for a couple of decades, but the biggest hit began during the 2008 recession created by the housing lending market. Unemployment rose and many service businesses, dry cleaners included, were heavily impacted by a tightening of discretionary spending by consumers. Profit margins were reduced across the industry as customer spending decreased, and many smaller operators were not able to weather the storm. To make matters worse, the environmental concerns related to the use of many dry cleaning solvents, mainly perchloroethene (Perc), were on the rise. Dry cleaners started being pressured by property owners, regulatory agencies, and consumers to switch to less problematic solvents. This is not as easily said than done since making the switch means buying expensive equipment, which can compound the burden of already depressed profits. Some dry cleaning business owners who had been prosperous during previous decades and who were nearing retirement age took the clue that it was time to sell and retire. Others just couldn’t make the numbers work anymore and started looking for larger operators to sell their business to without much hassle.

Now that the national economy has been in slow recovery for around ten years, rent is on the rise. For those dry cleaning operators who don’t own their property and are still waiting for business to pick back up, this further compounds the problem. Property investors are renovating and improving many retail centers to substantiate the higher rents, and some dry cleaners are losing their leases unless they make a solvent change away from Perc. Retail property owners want to be associated with “green” dry cleaners only.

In addition, business fashions have become more casual and hasn’t required as much dry cleaning, thereby removing the potential relief from the recovery of discretionary spending habits alongside the lower unemployment rate. While the industry is already adapting to meet the changing wants and desires of their customers, many smaller and long-term family dry cleaning businesses find themselves between a rock and a hard place.

FACTORING IN THE POTENTIAL FOR ENVIRONMENTAL CONTAMINATION

Whether you are considering a sale of your dry cleaning business or considering a purchase of a dry cleaner whose owner may be implementing an exit from the business, the fear of possible environmental contamination will need to be addressed during the process.

Selling or buying a dry cleaning business is no different than the mergers or acquisitions that you may read about involving much larger companies. When one business buys another, there are assets and liabilities that must be transferred, held, or dispersed. Buyers will want to pay a fair market rate for the positive assets of a company and try to avoid taking the liabilities as part of the deal. Liabilities typically carry with them a negative monetary value and serve to lower the purchase price.

Environmental contamination issues are always on the liabilities list. From the seller’s perspective, they want to be able to get the full value for business and be able to walk away from the liability as well. Many dry cleaner deals fall through when the negative value of the environmental liability offsets the positive value of the business assets to the extent that the sale price is no longer motivating to the seller.

In order to save the deal, the environmental liabilities can be separated from the sale such that the buyer only purchases the assets of the dry cleaner at fair market value under a new corporate entity and the seller retains the environmental liability. This allows the deal to go through and maximizes the value of the sale, but the seller is left holding a bag of liability with a huge potential negative price tag. Keep in mind this is not Plan A and will not provide you the most value.

The fact that a dry cleaner’s old commercial general liability (CGL) insurance policies are viable positive assets to the business often goes without consideration. If a business is sold leaving the corporate entity intact, those old policies will transfer as well, thereby offsetting the negative value of the environmental liabilities. Similarly, if a business is sold as an asset-only acquisition into a new corporate entity, the old CGL policies will remain with the policyholder who retains the environmental liability. The fact that your historical CGL policies can play so monumentally into this process is a testament to finding and utilizing them.

THE THREE STEPS TO SELLING YOUR BUSINESS

There is some good news out there for dry cleaners and the garment and textile market as the industry changes and adapts to meet the changing needs of their customers. Some operators are even looking to take advantage of shrinking competition and double-down on a consolidation strategy. If you are looking to sell your business within the next couple of years, take the time to do some planning so that you can maximize your returns and avoid surprises that could kill a deal to sell your business. It’s a buyer’s market right now, so give yourself a fighting chance.

1. ASSEMBLE A TEAM THAT WILL WORK TOGETHER EFFECTIVELY TO PROVIDE YOU WITH THE EXPERIENCE AND SPECIFIC KNOWLEDGE YOU NEED TO MAKE SURE NOTHING GETS MISSED. YOUR TEAM SHOULD CONSIST OF THE FOLLOWING SEASONED ADVISORS WHO ARE FULLY AWARE OF YOUR STATE’S REQUIREMENTS, AS NEEDED:

A Business Broker and maybe a Commercial Real Estate Agent – Find a business broker that knows the dry cleaning industry. A good business broker is not just going to list your business for sale, and then collect their commission. A good business broker will spend a significant time with you to help you understand what will be attractive or repulsive to potential buyers. It’s important to understand the playing field because it’s a huge part of the process.
A Business Attorney – You’ll want a business attorney by your side because there will be numerous rules and laws that need to be closely adhered to during the sales process. The last thing you want to do is break the law by accident.
A CPA and maybe a Tax Attorney – You’ll need to understand the tax implications of gains realized from the sale and having a CPA and Tax Attorney can be there to explain these implications.
A Commercial SBA Banker – Chances are there will be some lending involved on the buy-side, and you’ll need to manage net proceeds from the sale on your side.
An Environmental Consultant – Since dry cleaners are historically known for environmental contamination, you’ll want to have an environmental consultant with chlorinated solvents experience by your side to help fulfill your investigation and/or cleanup requirements.
An Insurance Archeologist – You’ll want to gather all of your valuable assets as you’re preparing for this process and your old CGL insurance policies should be part of your list for asset protection.

2. DO A BUSINESS EVALUATION TO UNDERSTAND THE GOOD, THE BAD AND THE UGLY BY TAKING INVENTORY OF THE COMPANY’S ASSETS AND LIABILITIES. HERE ARE A FEW QUESTIONS TO HELP YOU GET STARTED.

What is your debt?
What asset contracts do you have that would transfer with the business?
What is your discretionary cash flow?
What environmental liability might you, or do you, have?
What historical insurance assets may be accessible to offset latent liabilities?

3. DEVELOP WHAT YOUR OBJECTIVES FOR THE SALE BY ANSWERING THE FOLLOWING QUESTIONS.

How much money do you need to clear from the sale?
What are the upfront costs of the transaction?
Do you want any residual corporate entities to manage liabilities and assets?

By taking these steps before you’re actively ready to sell your dry cleaning business, you’ll be prepared with the information you’ll need to move forward. You’ll also have the right team by your side to help you achieve your goal of selling your business for the best price. Don’t let environmental contamination stall your plans to sell your dry cleaning business.

If you are currently going through this process or you are planning on selling your business soon, contact EnviroForensics President, Jeff Carnahan at jcarnahan@enviroforensics.com or Managing Member and Principle Consultant/ Broker of Ehrenreich & Associates, LLC, Richard Ehrenreich at richard@ehrenassoc.com as resources. We’d be more than happy to have a conversation with you about transaction preparation and environmental contamination.

As seen in Cleaner & Launderer

Richard F. Ehrenreich, F- CBI, CED, SBA is the Managing Member and Principle Consultant/Broker with Ehrenreich & Associates, LLC. Richard is a recognize national expert in the Exit Strategy and Sale of Privates Owned Businesses. Richard has served in leadership roles for multiple dry cleaning associations. He is the third generation of family businesses that serve the Dry cleaning Industry for over 60 years. Over the past 15-years, Richard has completed over 800-unit evaluations, plus various legal and financial issues.

Q&A: EnviroForensics Answers Questions From Members of the Pennsylvania Delaware Cleaners Association

Posted on October 10, 2019March 22, 2024 by Elizabeth Hemingway

An environmental investigation and cleanup at a dry cleaner presents a series of complex and unique challenges. With the help of an insurance archeologist, a trusted environmental attorney, and an experienced team of environmental consultants, it doesn’t have to be so difficult.

EnviroForensics’ President, Jeff Carnahan, LPG, Director of Accounts, Dru Shields, and Account Executive, Joe Miller discussed this in a recent webinar co-sponsored by the Pennsylvania Delaware Cleaners Association (PDCA). At the end, attendees submitted questions about their own environmental situations for the panel to answer.

Watch the webinar “How to use old insurance to pay for environmental cleanup,” to see the recorded presentation and Q&A session, and download the slideshow

This Q&A session has been lightly edited for clarity.

1. I completed a cleanup and it was of great expense. Who can I talk to to look into historic insurance?

Dru Shields: When a cleanup has already been completed, it is possible to recover some of the costs that have been spent already. You may not recover all costs. Depending on case law in your state, there may be some hurdles. But, seeking out an insurance archeologist can help you go through your information, and locate historical insurance policies by:

recovering old business records and old historical insurance policies,
walking through the process of pulling together the corporate history,
pulling together any information on stakeholders that were involved in the business, and
pulling together any business records that you do have will be helpful when you initially reach out to an insurance archeologist.

2. How does a dry cleaning business owner start the insurance archeology and environmental cleanup process if there hasn’t been a lawsuit or a sale to trigger a defense?

Shields: That is a really good question. We’ve actually had a few of these situations come through recently. Even if you don’t have an action against you that’s going to trigger your insurance, locating those policies and making sure you have a safety net in place for when that situation arises, is always going to put you in a much better position than if you were to be in a reactive position, when it comes to actually getting the claim needed, whether that’s the lawsuit or a letter from your state regulatory agency. As I mentioned before, with the lawsuits it doesn’t necessarily have to be a contentious lawsuit. It could be an agreement you have in place with someone—whether it’s a neighbor or a landlord—someone who understands that to get the situation cleaned up and addressed, you’re going to need a lawsuit. So, that is something that we can assist with as well.

3. What is the average cost of a Phase I and a Phase II investigation?

Joe Miller: The average cost of a Phase I and a Phase II can vary all over the map. A Phase I is mostly a desktop investigation to see what the history of the property usage was, so not only was there just a dry cleaner, but what was there in the past? What could have potentially impacted that property beforehand? And also, what, in the surrounding area, could be impacting that property, too? What is the risk? So, the cost of a Phase I can range anywhere from $1,800 to upwards of $2,500-$3,000.

A Phase II are a little more difficult to name a price on because that’s really tough to determine how many holes to poke in the ground. That’s an actual investigation where you’re sampling; you’re taking samples of the soil beneath your site, you’re taking samples of groundwater beneath the site, sending those for analysis, and then generating a robust report of those findings. So, in any case a Phase I or a Phase II, we still suggest that you do your insurance due diligence first; Make sure we have a safety net of payment in place, in case something does pop out of those, especially a Phase II. And, be ready to go in case an environmental issue is found in those investigations.

Jeff Carnahan: I think the cost of a Phase II—if you’ve done what you’re talking about and actually have done the homework and find out that you’ve got coverage in place—the cost of your Phase II investigation can be mitigated, it can be kept minimal. In that situation what you’re concerned about is: Do I have a problem or don’t I have a problem? And, since we’ve worked with a lot of dry cleaners across the country, we know of three or four locations at a site where a problem is likely to be found. If that Phase II is to satisfy a lender, they might need more data confirming a property’s compliance. So, on the short-end, you’re looking at $10,000 – $12,000 for a minimal Phase II. If you need to satisfy your lending institution for a transaction, it might be closer to $25,000.

4. Can you use insurance archeology in addition to state-funded environmental cleanup programs?

Shields: The short answer here is yes. We have worked with a few different state funds to keep dry cleaners eligible for the fund. The goal is to use the historical insurance policies to pay for the cleanup. We have also worked with funds to implement language where a dry cleaner is required to look into locating historical insurance policies before they’re eligible for the fund. So, those funds want members to make sure there isn’t another source of funding before they’re able to dip into the funds provided by the states. And, that’s not to say though that there aren’t some funds that may have rules in place that would maybe not allow for insurance where they would prefer people who are using insurance to use only insurance, but if you have insurance and it’s going to cover it, and you have a state fund, and we’re able to keep you eligible, then yes, you can use both.

Learn more about how insurance archeology can help dry cleaners in states where the dedicated cleanup funds are drying up.

5. Will PERC naturally degrade over time if nothing is done?

Carnahan: I’ll try not to geek out too much on the science, guys. A lot of times we’ll go investigate gasoline sites and we’ll find evidence of impacts, but gasoline contamination will naturally degrade over time. If it’s a really old spill, sometimes you don’t have to do much. On the other hand, chlorinated solvents are considered recalcitrant compounds. That means that they don’t go anywhere, and they are very stubborn. Under natural conditions, there can be some breakdown, but not substantial over time. With Perchlorethylene, the degradation process that microbes will assist with; it goes from perchlorethylene down to trichlorethylene, so these chlorine atoms will cleave off of the molecule over time. We have investigated 50, 60, 70 year old dry cleaners or chlorinated solvent sites where we only see perchlorethylene; There’s been zero degradation over time. So, if your plan is, “Gee, my grandpa never did anything because he was hoping it would go away over time. My dad did the same thing. My mom did the same thing. And, now I’m doing the same thing,” it may not work out for you very well.

Miller: One other piece to mention is the differences of geology in different areas. One of these degradation materials that Perc turns into is vinyl chloride, which likes to hit sand and travel even faster through sand than actual Perc does. So, sometimes a problem that could have been a big problem to begin with, can be a miles-long problem after years and years of motion in groundwater.

See why Perc contamination expensive to clean up, and why an experienced consultant is required to manage the issue in a cost-effective way.

6. What if contamination is found on my property, but money is not available for me to clean it up? Can I be shut down?

Carnahan: Not really. But you can be essentially hounded by the regulatory agency, and they’ll be on your back for a long time. Regulatory agencies are able to enforce stipulated penalties and/or fines if work does not move forward, but realistically if the money is just not there, there’s not a whole lot they can do about it other than to continue to be on your case about it. Now, ultimately if there’s actually a human exposure because of the contamination at your site, but you literally do not have the money to clean it up, the EPA or the state agency can actually come in and take control of your site and spend money to take care of that ongoing exposure. However, just because the state comes in it doesn’t mean that they’re going to shoulder that cost. You’re going to get hit with a bill for money that somebody else spent. So, again, if you’re having trouble like that, we really recommend looking for your old policies. Let us look for those historical insurance assets so you can take control of the environmental issue yourself, because only then will be able to really take care of the situation.

7. On average, how long does it take to look for old insurance policies?

Shields: We typically give our insurance archeologists about 90 days to complete a project. If it needs to be expedited, we can take that into consideration as well, but the average time is 90 days.

8. How do I select a good environmental consultant?

Carnahan: Dry cleaner sites can be very specific. The contamination that occurs at a dry cleaner site is most likely operations-oriented. Whether it’s been a series of boil-overs in your still, whether or not there’s been a release to the sewer from the separator water, whether or not it’s been from a muck pile or from a drum of spent cartridges out back, you really need to find a consultant who has specific dry cleaner experience because they’re the ones who are going to know where to look. They’re the ones who will be able to more efficiently define the nature and extent of contamination in a reasonable manner. Also, chlorinated solvents are really tricky. They don’t break down over time. The pure product is heavier than water, which means that whenever it migrates down to the water table and continues down beneath the water table, it’s really hard to find, and if you don’t have a consultant that’s experienced with that specifically, it can be difficult to get your site cleaned up. So, how do you go about doing that? We can help you with that and can work with you. If you’re located where we can’t specifically get out there and start doing the investigation ourselves, which is of course one of our specialities, we’ll work with you. We’ll stand beside you during the claims process. We’ll stand beside you during the investigation process, and make sure that everything is on the up and up and looking good.

See our list of 5 considerations for when a dry cleaner is selecting an environmental consultant

9. We’ve found our insurance policies, but what happens when the insurance company no longer exists?

Shields: We’ve seen cases where insurance companies have been acquired by other insurance companies, and in that case you can find the chain of ownership and figure out who the main carrier is and whether or not you can still tender claims on those policies. We have also seen cases where the insurance carrier has been completely liquidated, and in some instances, there have been time stamps on how long you can tender claims. If that timeframe is up, you won’t be able to tender on those policies. In many cases we’ve found that dry cleaners switch insurance carriers over time. The likelihood of a dry cleaner having one insurance carrier for the entire extent of their ownership is low. It’s more likely that they would have changed to get better premiums, so the goal there would be to find policies that would have been held by insurance carriers that are still solvent.

Do you have a question that hasn’t been answered here? Contact us for a confidential consultation.

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 focused on being a partner with the dry cleaning industry for the past decade, and he’s a frequent contributor to the national dry cleaning 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.

Dru Shields has over 10 years of account management experience in the environmental consulting and engineering industry. She manages a team of account executives who work across the country. Shields is a member of numerous regional dry cleaning associations in addition to serving on the Midwest Drycleaning and Laundry Institute (MWDLI) Advisory Council. Shields has extensive experience in assisting clients in securing funding for their projects through historical insurance policies. As Director of Accounts, Shields helps business and property owners facing regulatory action to navigate and manage their liability.

Joe Miller brings 15+ years of account management and environmental due diligence experience. He has a background in geology, is a licensed mitigator, and understands the technical aspects of contaminated sites as well as the associated business liabilities. As an Account Executive, Miller conducts preliminary assessments and provides proven solutions to private business owners, small-large manufacturing facilities, municipalities, and redevelopment coalitions.