From time to time, I’ve used this article to share some recent environmental conundrums brought to us by dry cleaner clients. The world of environmental liabilities and regulations is as large and complex as the variety of different circumstances that dry cleaners may find themselves in. For that reason, presenting some unique and real scenarios to you seems like an effective approach to contributing to the greater consciousness of the industry regarding these very significant concerns.
I hate that it’s true, but we are frequently being contacted because a dry cleaner is being evicted from their place of business by their landlord. Clearly, there can be many reasons a landlord may choose to break their lease with a commercial tenant, but in these situations, it is because of environmental concerns. Many commercial and retail property owners continue to take a hard line on the use of Perc. Even if there is no indication of a past environmental release to the subsurface, landlords are nervous about the use of Perc moving forward. They look out for their own interests, which are to keep liability low and keep a paying tenant in the space. Suppose landlords catch wind of a credible reason that one of their tenants may not be a reliable source of rent due to market conditions or public opinion. In that case, they will do their best to strategically remove the tenant in question. Additionally, suppose a landlord believes that there could be liability for them due to the operations or actions of a tenant. In that case, they could also make a move to evict, terminate a lease, or not renew a lease. That’s not even mentioning that the process of getting a lease as a dry cleaning tenant in a new commercial development is continuing to be harder and harder.
If you find yourself in a similar situation, firstly, make sure that you are consulting with a good attorney who is well-versed in lease language. That’s where your rights and those of your landlord are laid out precisely, but perhaps not intuitively for the unfamiliar reader. Secondly, if your lease is being terminated due to a recently discovered environmental contamination issue, you may have the leverage you need if you have the means to pursue a cleanup and regulatory closure. Whether or not the landlord knows it, you should know that they also have some liability. As the property owner, they are typically next in line for the responsibility of cleanup should something happen to your business. Perhaps you can negotiate with them if they understand that they would be holding the bag alone if you were out of business. By the way, if your business is an older one that dates back to the 60’s (or older), 70’s, and/or 80’s, those old general liability insurance policies would certainly be excellent for you to have in this situation because you can use those old policies to help pay for legal defense, environmental investigation cleanup. So, hire an Insurance Archeologist to find them for you.
Another situation that we see very commonly is that a property owner/former landlord of a dry cleaning location is selling their property, which has led to former dry cleaner tenants of that property being put in the cross-hairs for environmental issues. Commercial real estate transactions have been on fire this year, and many properties are changing hands. As I’ve written about often, buying and selling commercial real estate includes the need for a Phase I environmental assessment, which could lead to the discovery of an environmental problem. If one is identified, the potential buyer of that property is almost always first going to look to the current property owner to cover the cost of the cleanup or provide a lump sum of money to offset those costs. In the past, prospective commercial property buyers often just walked away from deals if there was historically a dry cleaner at the location. However, the intense competition in the commercial real estate market is very high for finding available investment properties, so even the complicated deals are being taken more seriously. This means that sellers are becoming much more aggressive with not only current but former tenants as well. How many dry cleaners do you know that have been sued by a former landlord? I know several, myself.
So, again, what can you do if you fall into this situation? First, make them prove that your operations contributed to the problem. We perform this kind of work very often, and I can tell you that the results are not always conclusive. Finding the difference between environmental releases from successive operators at the same location is very difficult if releases happened during both operators’ time at the site. We sometimes find the key to solving the puzzle is not only in the facts of the contaminant plume alone but also in the operations’ details. Keep a good record of the locations of dry cleaning machines, the timing of new machine purchases, your solvent purchase and waste logs, etc. Also, note when floor drains are closed, new ones opened even when the landlord relocates sanitary sewer laterals anywhere on the property. Environmental consultants can analyze the timing of these events alongside the analytical data from the plume, which could lead to a distinction between your old releases and those of other operators who may have occupied the same commercial space.
Here is another issue my buddy and dry cleaner consultant Mike Tatch shared that he frequently sees. I’m paraphrasing here, but the concern is related to newer solvents that are popular in the market today. Just because they are labeled as eco-friendly or green doesn’t necessarily mean that your solvent waste shouldn’t be managed with great care and documentation. As a geologist with a background in geochemistry, I know which common chemicals are harmful to human health and/or the environment. What I don’t exactly know is how new information related to existing or newly formulated chemicals will impact regulatory compliance, waste management environmental cleanup regulations in the future. For example, when Perc first entered the dry cleaning industry, owners and operators probably wondered if there were any rules to its use and disposal. Not finding any in existence, they moved forward in a way that best made sense. They had no way of knowing how that chemical solvent would end up causing so much heartache for so many good people and the environment. I know that we all want to use safe, effective economical solvents that are not harmful to the environment. But please consider erroring on the side of caution and keep handling your solvents and wastes in a manner that keeps them contained. Reach out to a dry cleaner consultant who can help you understand what that is, if you’re not sure.
So that’s what we are seeing these days, gang. Please take good care, and if you’re at Clean Show 2022 in Atlanta, be sure to find Dru Carlisle and talk to her about any of these topics.