Dry Cleaning Issues:
Prevention, Remediation and Litigation
Arthur H. Siegal and Jennifer Formoso

A commercial dry cleaner in your neighborhood shopping center appears to be a convenience and not something to keep you awake at night worrying about hazardous chemicals. Unless you are a banker, lawyer, developer or other real estate professional that has been involved in the investigation and remediation of a dry cleaning site, you may not be aware of the dry cleaning horror stories. By being aware of the environmental risks associated with dry cleaners, a shopping center owner can act to minimize the risk of a release and avoid becoming a stigmatized site of contamination. And, if it is too late to prevent contamination, then a property owner needs to know when and how to get involved to protect itself.

Dry cleaning operations typically involve a chemical named tetrachloroethylene, perchloroethylene, perc, or PCE. Most commercial dry cleaners prefer PCE because, among other reasons (unlike the lighter-weight cleaning solvents), PCE is not flammable. Generally, PCE is twice as heavy as water, highly insoluble and extremely viscous. As such, PCE has the ability to infiltrate porous materials (like concrete) and cracks, migrate through all soil types (including clay), and sink to the bottom of the water table, where it is extremely difficult to clean up. PCE is also a carcinogen that can cause health problems at extremely low levels. We know of businesses that have “funded” environmental cleanups of PCE released to surrounding soils from floor drains and sewer lines. These types of releases often go undetected for years and, in many cases, are only identified and investigated during a property transaction.

Regardless of the hazards associated with dry cleaners, they are a fact of life in this day and age. So, how do you minimize the risk of leasing to a dry cleaner?  Focus on the actions that you can take to prevent a release of PCE to the environment by your tenant; be vigilant to ensure compliance to the extent possible and if a problem occurs, be prepared to be creative and flexible in dealing with the government.

Prevention

Currently, dry cleaning operations are monitored and permitted by various states’ agencies, often with an emphasis on air permitting and not on waste handling. Discharges to the sanitary sewer system or to floor drains go largely unregulated and as noted before, this can cause a series of very expensive complications. It is important to know that your dry cleaner tenant may be in strict compliance with all applicable environmental regulations and still be contaminating your property. Therefore, you should require:

•that all equipment and associated piping and chemical reservoirs be above ground;

•secondary containment to prevent and contain incidental leaks;

•filters and other hazardous waste be stored within proper secondary containment;

•periodic inspections to be conducted by an independent party and reported to you (and your lawyer);

•if possible, that an alternative chemical petroleum-based solvent be used.

Further, you should forbid modifications to the plumbing or discharge of chemicals or any process water to utility sinks and/or floor drains (PCE can dissolve PVC piping and joint compound, providing a ready pathway for migration).

Investigation and Remediation

As noted above, typically, these matters come to light when there is a sale or refinancing. At that point, time tends to work against you. Certainly, lenders and new owners can pursue protection under state laws but often will require “closure” or an agreement that no further action is required. There are various novel and traditional technical approaches that may make sense depending on a variety of circumstances. These approaches range from dig and haul to passive treatment with various chemicals to accelerate degradation, electrical resistant soil heating and technologies such as air-sparging as well as creative use of restrictions negotiated with governmental bodies.

Litigation

When all else fails, between common law, state statute and lease language, a prepared landlord is well postured to pursue damages from his tenant who caused contamination. The law imposes a fairly high burden on the operator of a dry cleaning plant to disprove that he caused contamination by dry cleaning solvents. Well designed lease language should do the same. Of course, one’s lease language is only as effective as the policing, and solvency, of the tenant. A tenant caught causing such contamination may raise a variety of factual and legal defenses.

Conclusion

Seemingly innocuous, a dry cleaner can cause significant damages to a landlord’s property. Landlords that lease to such tenants must approach them with a level of preparation and seriousness typically accorded to industrial tenants. Failure to do so can be extraordinarily expensive.

Arthur Siegal is a partner with Detroit-based Jaffe Raitt Heuer & Weiss, a full-service law firm. Jennifer Formoso is a manager and senior consultant with Clayton Group Services, Inc.’s Detroit regional office. Clayton is the largest independent provider of integrated environmental, health and safety consulting and laboratory services in the U.S.