Dry Cleaners Businesses in the 1920S - DOC

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Dry Cleaners Businesses in the 1920S - DOC Powered By Docstoc
					ENVIRONMENTAL BANKERS ASSOCIATION
TECHNICAL DEVELOPMENTS COMMITTEE

St. Pete Beach , FL Meeting
January 2000
Lead Author: Georgina Dannatt, Bay View Bank


AN OVERVIEW OF DRY CLEANING ISSUES

Introduction

Dry cleaning is the process of cleaning soiled fabrics with solvent rather than water. The
process was invented in France in the 1880s. A variety of solvents were used in the early
years, such as petroleum chemicals and various chlorinated solvents, but problems with
flammability and toxicity eventually led to the prevalent use of perchloroethylene (also
known PCE, perc, or tetrachloroethylene). PCE has also been used as a degreasing
solvent in industrial settings, however about 90% of PCE manufactured has been used for
the dry cleaning industry.

The concern is for dry cleaners which have performed cleaning on-site at a “plant”, both
currently and in the past, since environmental contamination may be present and
remediation of solvent releases is one of the most expensive environmental problems to
resolve. In addition to retail dry cleaners, linen supply and uniform companies typically
operate a plant. Drop off stations where the clothes are ferried to a central plant for
cleaning did not become common until the late 1980s, and such an establishment may
have performed cleaning on-site in the past.. In suburban locations, dry cleaners have
been most common in strip malls, and often cleaners may have occupied multiple tenant
suites within the same complex. Early machines were large in size, typically installed in
retail spaces of 1000 square feet or larger, with smaller units introduced in the 1960s.
Coin-operated dry cleaning machines were common at self-service laundromats in the
1960s-1970s, and many hotels had units for fast turn-around service, some as small as a
closet. Use of dry cleaning services was much more common in the past, particularly in
urban settings, since many fabric types could only be dry cleaned and the process was
relatively inexpensive. As an example, in 1953 there were over 300 dry cleaners within
the San Francisco city limits. As material and disposal costs and regulatory requirements
increased beginning in the 1970s, the number of dry cleaning establishments decreased.
Today, there are approximately 30,000 dry cleaners in the United States. Searches of
historic city directories which list businesses by street addresses are typically used to find
past dry cleaners, with yellow page listings, city building or fire department records, and
historical fire insurance maps sometimes providing information as to whether cleaning
was actually performed on-site.

Dry Cleaning Process & Dates of Concern
The dry cleaning process includes three main steps: 1) the initial spotting process where
clothes are placed on a spotting board and individual stains are pretreated with small
quantities of liquid solvents dabbed on by hand; 2) immersion of clothes in a liquid
solvent bath in an agitating washing machine, extraction of solvent via a rotating drum,
and heated air drying; and 3) steam pressing of the clothes. Clothes are held onto
spotting boards and pressing equipment by a plant-wide vacuum system, which suctions
liquids out of the clothes, resulting in solvent-contaminated wastewater generated within
the vacuum system.

Several generations of dry cleaning machines have been used, with each successive
generation having a lower potential for solvent release to the environment. First
generation machines were in common use from about the 1920s until the late 1960s.
Known as “transfer” or “wet-to-dry” machines, they had separate washing and drying
units. Filters and screens removed particulates and dirt, a separation process removed
extraneous water, and a distillation/condenser apparatus boiled and condensed the solvent
for purification and subsequent reuse. There was a high potential for solvent drips and
spills since clothes were manually transferred between machines, bulk chemicals were
not secondarily contained, and machines were not designed to maximize solvent
recovery. In the late 1960s, second generation machines termed “dry to dry” or closed
loop machines were developed which combined the washing and drying functions into
one machine. Up until the 1970s, concentrated waste solvent was typically disposed
down the sanitary sewer, and machine design allowed solvent and contaminated
wastewater to be routinely released to the sewer. Consequently, dry cleaners in operation
prior to the 1980s are the most likely to have had an environmental release.

Third generation closed-loop machines came into use in the 1970s with refrigerated
condensers built into the machine to more efficiently capture solvent vapors. Fourth
generation machines came into use in the mid-1990s. These closed loop machines have
internal carbon adsorbers, which act as a vapor-recovery system, further reducing fugitive
emissions during loading and unloading.

There are four main types of wastes generated during the dry cleaning process: 1) spent
solvent; 2) machine filters which must be changed regularly and are saturated with
solvent; 3) solid residues left behind in the still bottom after the solvent has been boiled
away; and 4) wastewater separated out of solvent and that collected in vacuum systems.

Hazards of PCE

PCE is a colorless liquid, volatile chlorinated organic solvent, which is non-flammable,
relatively inexpensive and an excellent degreaser. The qualities than make it desirable as
a cleaning solvent are the same qualities that make it a problem as an environmental
contaminant. PCE is very stable for repeated reuse, but therefore very persistent in the
environment and not readily biodegradable. It has relatively low solubility in water,
which causes it not to bind to soil and to be very mobile. It is heavier than water, so it
sinks to the bottom of a ground water aquifer, where it coalesces into pockets of
relatively pure material which are difficult to remediate. PCE is a potential human
carcinogen which remains stored in body fat. Short-term exposure effects are headaches,
dizziness, and respiratory irritation, with long term effects of kidney and liver damage.
Due to the potential for health hazards of PCE in drinking water supplies, clean up levels
in soil and ground water are low.

Summary of Regulations

Numerous regulations have been enacted to prevent environmental contamination and
human health exposures to PCE. Strict emissions standards and workplace exposure
limits are in effect which govern releases of PCE to the air, protecting worker health and
safety as well as overall air quality. Older dry cleaning machines are now required to be
retrofitted with emission control systems such as carbon adsorbers and refrigerated
condensers. State air pollution control agencies may have environmental training
requirements for dry cleaning industry workers. The development of improved
technology to reduce levels of PCE in air, has also resulted in improvements in removal
of PCE from wastewaters and increased capture and reuse of solvent materials.

Environmental regulations have been developed which limit releases to industrial
wastewater, prohibit discharges to soil and surface water, and require proper disposal or
recycling of solvent. Cradle-to-grave tracking of chemicals was instituted in 1976
through the Resource Conservation and Recovery Act (RCRA) which was primarily
intended to prevent contamination of the land by requiring disposal at approved landfill
locations and banning “midnight dumping”. Later regulations eventually phased out land
disposal of liquid volatile organic solvents, once it became clear that solvents could leak
into ground water even from disposal only at appropriately designed disposal sites.
Hazardous materials storage regulations were enacted in the 1980s which instituted
requirements for secondary containment, chemical inventory tracking, and on-going
agency inspections at small facilities such as dry cleaners. Previously, dry cleaners had
been largely without oversight since PCE is not flammable, so local Fire Departments did
not inspect the chemical handling aspects of these establishments.

The Clean Water Act in 1972, Safe Drinking Water Act in 1974, and amendments in
1986 set forth requirements for water discharges and drinking water purity. Discharges
to surface water and sewer treatment plants have the potential to eventually migrate into
ground water, so discharges of PCE and other chemicals are strictly regulated. It is
important to note however, that PCE has a limited solubility in water, so typically levels
of contaminants found in a facility’s wastewater discharged to the sewer will be relatively
modest. Due to the persistence and toxicity of PCE, clean up levels are low; usually 1000
milligrams per kilogram (parts per million, ppm) or lower in soil, and 5 micrograms per
liter (parts per billion, ppb) in ground water.

The Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA, also known as Superfund) was enacted in 1980 to address
contamination from sites not covered by RCRA, including dry cleaning sites. The most
important feature is that CERCLA establishes joint and several liability for cleanup of
contamination for any past or current owner or operator of a site. A property owner can
be held responsible for the entire cost of a cleanup, even if their site contributed only a
portion, and even if the business that caused the contamination was owned by a tenant. A
property owner can also be held responsible for contamination caused by a past dry
cleaner business on-site which the current owner may not have even been aware existed.
This highlights the importance of performing adequate due diligence up front.

Dry cleaners and third parties such as property owners and lending institutions can also
be held liable for the cost of cleanup and damage to neighboring parties through common
law nuisance and trespass actions, and other tort actions.

Chemical Practices and Release Pathways

In the past, volatile organic solvents were thought to completely volatilize. It was not
known that these chemicals could migrate into ground water, and it was common to
dispose of volatile chemicals by pouring them onto soil or concrete at the rear of the
business. The dry cleaning process uses chemicals similar to those used in the past by the
computer industry, with contamination problems resulting which are similar to those at
many State and Federal Superfund sites.

Between 50 % to 90% of dry cleaner sites are found to have soil or ground water
contamination problems. By far the most common source of contamination is chemicals
migrating out of sewer piping. Typically, the sewer lateral extending from a building to
the street is made of cast iron, and the sewer main beneath the street is made of clay or
concrete pipe. PCE migrates very rapidly through clay and concrete; studies have found
measurable concentrations on the outside of such pipes within hours. In addition, since
PCE is heavier than water, the solvent tends to pool in low spots in the sewer line,
resulting in an on-going low level contamination of the sewer’s wastewater discharge.
But more importantly, the pool acts as a significant source of solvent to migrate into the
underlying soil and eventually down to ground water.

Other sources of contaminants are drips from transferred clothing, spills of bulk solvent,
and leaks from solvent drums or machine reservoirs. Cracks in building slabs provide a
direct route for migration into the subsurface. Until the mid 1980s to early 1990s, most
retail shops did not provide secondary containment for chemical storage areas for virgin
solvent, waste solvent, and spent filters. Chemical storage frequently occurred both
inside the building and along the exterior of the building on bare soil or parking lot
pavement. Filters disposed as regular garbage typically drained into dumpsters and
leaked onto the ground surface.

There are numerous potential routes of impact for ground water contamination, such as
subsurface migration into drinking water supply wells, seepage through basement walls,
and discharge into surface waterways and sanitary sewer systems through pump systems
used to dewater underground facilities (e.g. basements, parking garages, utility vaults).
Contamination beneath a building or basement seepage may result in an indoor air
problem within the dry cleaner’s space, or within adjacent tenant units, or even other
nearby buildings.
Investigation Scope & Typical Costs

Sample collection and analysis is generally conducted to assess whether contamination is
present in soil, and ground water may be assessed also, particularly if the water table is
shallow or underlying sediments are very permeable. Typical locations to drill soil
borings include the vicinity of the dry cleaning machine, chemical storage areas, sewer
lines, and floor drains. Soil borings are drilled using either manual equipment to shallow
depths of 5 feet or so, or a drill rig to collect samples from deeper depths. Generally, at
least two soil samples are collected and analyzed from each boring. Deep soil borings
may have a casing installed and be converted to ground water sampling wells, or a grab
ground water sample can be collected through special apparatus which momentarily
converts the soil boring hole to a monitoring well (Hydropunch), giving a “snapshot” of
ground water conditions. Less intrusive methods are available to collect samples of soil
gas (air from between soil particles which contains solvents in the vapor phase), either
though active pumping out of the soil gas, or collection by passive monitors (Geoprobe).

Costs for investigation (usually called a Phase II ) vary depending on factors such as the
number of sampling locations, number of samples to be analyzed, depth to ground water,
and difficulty of drilling. Costs range from $4000 to $6000 for a less invasive study, to
$10,000 or more for an initial investigation with a broader scope, more difficult terrain,
or deeper ground water. Further investigations and full characterization of a problem can
range between $50,000 to $200,000, with even larger additional costs to remediate the
problem as described below.

Remediation methods & typical costs

Like the investigation, requirements and costs for remediation can vary widely depending
on a variety of factors such as the location of the source areas, how far the contamination
has spread laterally and vertically, the types of underlying sediments, whether it is in
ground water and has traveled off site, proposed future uses of the property, and State
cleanup requirements. Risk Based Corrective Action (RBCA) programs are now accepted
by most States. These programs allow the responsible party to conduct risk assessments
to demonstrate that residual contamination can be left in place without creating undue
risks to human health or the environment. Generally, soil source areas with high levels of
PCE and related compounds resulting from breakdown of the PCE (e.g. > 1000 ppm)
must be excavated. If source areas are under buildings or other structures, costs will
escalate, particularly if demolition is required.

Contaminated soil which has been excavated may be disposed off site directly, or
bioremediated either on or off site. Active bioremediation involves augmentation of the
microbes that break down PCE and addition of nutrients and aeration to increase the rate
of activity, and is often applied to excavated soil which is placed in piles of plastic
sheeting on-site. Passive bioremediation, also called natural attenuation, is allowing
naturally occurring microbes to break down the solvent without enhancement, and is
frequently used for soil that has been excavated, with the soil occasionally aerated
through rototilling to enhance the natural processes. One complicating factor for any
type of bioremediation is that naturally occurring organisms are often killed by
chlorinated solvents such as PCE, and the rate of solvent breakdown is quite slow. For
contamination problems which are not moving off site in ground water, natural
attenuation with active monitoring is often appropriate. Lower level residual
contamination is left in place for natural biodegradation, and ground water samples are
collected and analyzed periodically to ensure the contamination levels are either holding
steady or falling, and the plume is not moving off site.

A more active remediation approach is soil vapor extraction. Dry wells are installed in
the soil above the water table, and a vacuum is applied to the wells. The contaminants
volatilize into the air between soil particles and are then sucked to the surface.
Contaminated air is run through carbon drums to redeposit the solvent, and the drums are
later incinerated for disposal.

For sites where high level ground water contamination is present, a pump and treat
system may be required. Ground water extraction wells are installed, and ground water is
pumped to the surface. The water is run through a treatment system such as an air
stripping tower to volatilize the contaminants into the air, and then through drums of
activated carbon. With all remediation approaches, there is likely to be a significant
amount of residual contamination left in place, and remediation of the problem can take
many years.

All these remediation technologies can be very expensive. Costs to remediate a soil only
problem start at about $50,000 for the simplest problem and run up to $500,000 or more.
Where ground water and off-site contamination is involved, the total cost can be well
over $1,000,000. An “average” problem is between $250,000 and $500,000.

State funds

In response to the potential for large environmental problems associated with the dry
cleaning industry, several States have developed dry cleaner reimbursement fund
programs. Typically, facility owners are individuals with a limited net worth, who are
unable to pay for cleanup of the contamination generated by their facility. State
programs have been developed to provide incentives for cleaners to minimize chemical
use and implement proactive practices, protect public health by remediating
contamination before it enters the water supply, and relieve the financial stigma
associated with owning a dry cleaning establishment or a property leased to such a
facility.

The following ten States have programs or statutes specifically dealing with dry cleaners:
Connecticut, Florida, Illinois, North Carolina, Oregon, South Carolina, Kansas,
Minnesota, Tennessee, and Wisconsin. The best known of these is the Florida program
which went into effect in 1994. The intent is to limit the liability of the owner, operator,
and real property owner by paying for cleanup of dry cleaning solvent contamination if
all parties have complied with the conditions of the law. Each facility must register with
the State, comply with environmental regulations, pay registration fees and taxes which
fund the program (including a $5 per gallon tax on PCE and 2% tax on dry cleaning
charges), and perform initial soil and ground water testing. If contamination is found, the
site must be fully investigated and then ranked for cleanup priority. A deductible
payment between $1,000 and $10,000 is required before cleanup of the contamination
will be funded.

Other State programs have deductibles and fees on a similar scale, though per gallon PCE
taxes range up to $12 per gallon (Oregon), deductibles may be as high as $46,000
(Wisconsin), and maximum reimbursements can range between $200,000 and
$2,000,000, usually with annual pay-out limitations. Most State programs place great
emphasis on pollution prevention through elements such as prohibition of older dry
cleaning equipment, tax incentives for installing new equipment, time limitations for
wastes to be kept on-site, prohibitions on wastewater discharges, requirements for direct
coupled systems for delivery of PCE to the facility, and installation of secondary
containment devices and blocking of floor drains.

Role of Insurance

For most businesses, environmental insurance can be purchased to cover environmental
clean up costs for pre-existing but undetected contamination, bodily injury and property
damage, legal defense costs, business interruption, diminution of collateral, contract or
pollution errors and omissions damages, etc.. Due to the high potential for impacts,
insurance covering cleanup costs for dry cleaner operations is not readily available at
reasonable costs within the means of the typical “mom and pop” dry cleaner businesses.

Cost Overrun insurance is available for existing contamination problems, whereby the
property or business owner involved in a cleanup has already characterized the extent of
the contamination and buys a policy to cover any costs exceeding the remediation cost
estimate. In the event pre-existing but previously undetected contamination sources are
discovered or the contamination is of significantly greater extent, the insurance coverage
would be triggered. The premium costs for this type of insurance typical runs from 5 to 8
% of the entire remediation cost.

Secured creditor insurance is available to lenders providing payment of the loan balance
in the event a property goes into default and is then discovered to have an environmental
problem. This insurance may have both a default trigger and/or a contamination trigger.
This insurance is available for one-off transactions, though generally at great cost. More
typically is applied to pools of properties in lieu of performing detailed site-specific due
diligence at the time of loan origination. If a property is known up front to have had a
dry cleaner, the insurance company may decline coverage unless Phase II investigations
are conducted to determine that significant contamination is not present. There is also
borrower-paid remediation insurance coverage where the lender would be an additional
insurance on the policy.

Within States with a dry cleaner cleanup fund, facility owners may be required to
demonstrate financial responsibility. This is in essence qualifying for and abiding by the
State financial assurance program, rather than the purchase of pollution insurance.
Alternative Cleaning Technologies

PCE has been proven to have a variety of health and environmental issues, as well as
regulatory and liability actions, and ever increasing regulation, taxation, and liability
costs. In an attempt to reduce the use of PCE, the dry cleaning industry has begun using
an alternative technology called “wet cleaning” and is in the process of commercializing
several other technologies, though most businesses offering an alternative method offer
still also offer the PCE method.

Professional wet cleaning using water as the primary solvent is becoming the most
widely recognized alternative. During the cleaning process, clothing is placed in a
washer, and then placed in a dryer or line dried. Various research studies have indicated
that a significant portion of items labeled for “dry clean only” can safely be wet cleaned.
Though wet cleaning reduces many of the concerns associated with PCE use, there are
still untested concerns associated with wastewater generated during the wet cleaning
process which may contain spotting or degreasing solvents. Further studies are being
conducted to research the volume and quality of water being discharged.

Several other technologies are under development and include: a liquid carbon dioxide
process, ultrasound, and use of alternative solvents such as water-soluble glycol ethers,
petroleum solvents, and trademarked products called “Rynex” and “Biotex”. The
effectiveness and possible adverse health and environmental impacts of each of these
technologies are still being studied.

A property occupied by a facility utilizing wet cleaning or alternative processes has the
potential to be contaminated by past solvent operations, unless it is a new start up facility.
It is important to establish whether the facility has historically used PCE or other solvent
in its operations prior to switching to alternative cleaning methods.

Conclusion

Dry cleaners were a common business in the past, and one with significant risks for
costly clean ups and on-going liability issues. It is important to determine the potential
for presence of such a business, though use of appropriate due diligence. If a dry cleaner
is identified, your institution’s environmental risk department should be consulted well in
advance of transaction dates to determine risk avoidance policies related to dry cleaners,
the scope of any investigations needed, local oversight agency requirements, and the
applicability of insurance.


Georgina Dannatt
Bay View Bank
January 2000

				
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