The Dirt on Dry Cleaners: Industry Anything But Clean 

ANDREA HOLECEK / Munster Times (Indiana) 18jan04

From cradle to grave, Indiana dry cleaners are liable for the cleanup of ground and groundwater contamination caused by the environmentally hazardous dry cleaning solvents they used in their business.

The cradle-to-grave designation means the owners and previous owners or operators of dry cleaning establishments remain responsible for environmental cleanup no matter when the pollution occurred. And while the regulation protects the environment, it also has cost dry cleaning businesses their life savings.

Indiana considered but failed to pass a law establishing a trust fund to clean up contamination from the hazardous chemicals used in dry cleaning, said Rick Armstrong, executive director of the Indiana Dry-Cleaning and Laundry Association. Currently 12 states including Illinois have the trusts fund which are funded by licensing fees and taxes on the solvents used by the industry.

"In Indiana, individual cleaners pay the cost of cleanup," Armstrong said.

The majority of Indiana dry cleaners use PERC—the common name for the contaminant and suspected carcinogen perchloroethylene—in their businesses, Armstrong said. Perc is suspected of causing cancer in humans, is considered toxic, and can cause dizziness, nausea, and headaches when either inhaled or absorbed through the skin.

When a dry cleaner—or the owner of a property where a dry cleaner is or has been located—tries to sell property, there are two inspections. One is a walk-though by the Realtor. During the second inspection, samples of ground and the groundwater are taken.

"If there is contamination, the trouble starts because no financial institution will get involved unless there's a cleanup," Armstrong said.

And there usually is contamination from drips and spills.

"If you don't have an operation that started in last five years, you probably have some kind of problem," Armstrong said. "Most older plants have some form of contamination. Many of the older cleaners did things the way that was legal, but the laws have changed. What was legal before became illegal. So it's like being fined now for driving through a red light at an intersection five years ago when it didn't have a traffic light."

Unique law causes problems

An Indiana dry cleaner who has been in the business for almost 50 years but didn't want to be identified because of a pending sale of her facilities said the cleanup costs for her business, which has multiple locations, is between $4 million and $5 million.

For her and others, the saving grace is the Indiana law—the only one of its kind in the nation—which requires insurance companies to pay for cleanup of pollution which occurred prior to 1989 if a cleaner can prove the insurance was in force. The cleaner, who is selling the business, was able to establish insurance coverage.

"Indiana recognizes old policies have liability," Armstrong said. "In about 1989, insurance companies started changing the policy to give you only $10,000 in coverage."

If there is no insurance coverage or if a cleaner can't prove the business had insurance, they have to either file a lawsuit to prove insurance coverage, pay for the cleanup or find a previous owner to pay. The process can be costly.

"It can cost $50,000 to 60,000 in legal fees and nothing is done in cleanup," Armstrong said. "If that money went to cleanup things would have been a whole lot better."

Linda Dygert, who owns Valparaiso's Mercury Cleaners with her husband, Norm, said for someone just starting in the business the perc cleanup regulations could be a nightmare. The Dygerts have owned their business since they bought it from his father in 1982.

"Banks can be very intolerant because they also would be liable for any cleanup," she said. "It makes it fairly difficult for cleaners to get loans on land. You can take a loan for building and equipment, but not on the property. Then from the time you get started you're liable ad infinitum."

It could be worse

Despite the lack of the environmental trust fund, Dygert said it's better to be in business in Indiana because dry cleaners don't have to pay the hefty tax on cleaning solvents. However, they are responsible for the proper disposal of the perc residue and cartridges.

"We have to have a licensed hauler to take it away," Dygert said. "Since the early '90s we've had to be licensed by the state. We have to keep records of perc purchases; weekly records of the waste disposed of; of the leak detection procedures and of problems with the machines and how it was taken care of. They're detailed and significant records."

Dry cleaning establishments and their record can be inspected by the Indiana Department of Environmental Management at any time.

"If you're not compliant, you can be fined in the thousands of dollars," said Dygert, who has never been fined but knows of business that have. "The biggest challenge is trying to be competitive and do the right thing. We want to turn out the very best products and do the best job while doing right for the environment at the same time."

Unless there's a contamination problem, it's better to be in the business in Indiana than Illinois because Hoosier dry cleaners don't have to pay the extra tax and fees, she said.

"So in theory we can hold line on retail prices more," Dygert said. "But I wouldn't recommend anyone getting into the business. My husband works six days a week. On the seventh day he does maintenance. He gets up at 5 (a.m.) leaves at the business at 5:30 (p.m.) when it closes. So there are very long hours and huge commitments.

"And you're never out of debt because you always have to buy new equipment."

source: http://www.thetimesonline.com/articles/2004/01/18/business/business/98065deb5131aa8586256e1d0081770d.prt 18jan04