Cleaning up Featured

10:01am EDT July 22, 2002

Dennis Bell, president of Sunbury Cleaners & Laundry Ltd., found a way to clear the air without cleaning out his cash reserves.

He knew planned improvements at his dry cleaning plant on West Granville Street would be no small investment—nearly $150,000, in fact. But he did it for the long-term savings.

He got help from the Ohio Environmental Protection Agency and the Ohio Air Quality Development Authority’s Clean Air Resource Center—even though he was not required to make the improvements under EPA regulations.

Those offices helped him get the necessary permits and financing. Now, he’s seeing savings in solvent reduction and energy use, and his plant has become more efficient—an important fact considering he intends to add, in the next two years, two stores to his existing three.

Finding the funds

About two years ago, Bell, like other dry cleaners in the state, received notice from the Ohio EPA and the Clean Air Resource Center regarding environmental regulation changes. He was a step ahead of them.

Bell had already secured bank financing and a loan through the Delaware County Economic Development Revolving Loan Fund Program for his project, but the resource center’s mention of potential tax breaks intrigued him.

“We applied for their program, which allowed us to get a rebate on the sales tax and get a tax abatement on the personal property tax for the [seven-year] life of the loans, so it was an attractive program,” Bell says.

Bell had been planning the improvements even though his business did not fall under the new federal regulations, which applied to dry cleaners that use perchloroethylene, a chlorine-based solvent. Bell uses a petroleum-based method his business has used since his mother founded Sunbury Cleaners in 1948.

“While we don’t burn solvent, we evaporate it out into the atmosphere of the clothes. Like your clothes dryer, the water molecules go out the stack. In our case, the petroleum molecules went out the stack,” he explains. “While it’s not considered particularly a hazardous pollutant, it is a pollutant.”

Bell’s new equipment will recover more than 90 percent of the solvent used.

Mark Shanahan, the Clean Air Resource Center’s executive director, says funding is available for business owners for the purchase, construction and/or installation of air pollution control equipment, regardless of whether the business is required to do so under state mandates.

“I think that small business owners like Dennis Bell come from the community where their stores are, so operating cleanly is very important to them,” he says.

Shanahan says the authority issued two bonds, one purchased by Delaware County, the other by Bell’s bank, Delaware County Bank. Then the authority loaned the proceeds of the bond sale to Bell. The relationship is arranged, however, so that Bell makes payments to the bank.

Business owners approved for the financing receive, on equipment purchased through financing, exemptions on real estate and personal property taxes for the life of the loan and on sales and use taxes.

To qualify for financing assistance, the project must be in Ohio and contribute to air quality through pollution control, pollution prevention, energy efficiency or innovative technology or operational process changes. The authority has approved financing for projects ranging from $20,000 to $350 million.

Bell anticipates his financing arrangement through the authority will save him more than $10,000.

“By discounting the sales tax, that gave us a significant amount of cash to help the whole project,” Bell says. “Any project like this has cost overruns. We had major floor problems we didn’t know about. That ate up the whole thing. We should still see savings obviously off the personal property tax.”

Although Bell borrowed approximately $100,000 for his project, the loan from the authority is for $125,000, so if there are overruns, he does not have to reapply.

The arrangement, Shanahan points out, also is an incentive to the lending bank.

“The benefit to the lender, as well, is that the interest payment to the bank is exempted from Ohio income tax. What the bank is legally receiving is interest on a bond issue,” he says.

Long-term savings

Bell expects to cut his net solvent usage between 80 and 90 percent thanks to the improvements.

"It's a small reduction in the short run, but tremendous in the long run," Bell says, noting the equipment's life expectancy is 30 years. "We'll save thousands of gallons per year. At our level, that's a couple thousand dollars a year."

In addition to the new petroleum equipment, Bell purchased a high-efficiency hot water system for his coin laundry. That, and a new boiler used for the dry cleaning, will save him on gas bills. New cooling systems on his dry cleaning machine and boiler also are more efficient.

In addition, he reconfigured the work space in the plant as part of the overall renovation.

"We should increase our worker efficiency, but I think it will be awhile before we realize it," he says. "We were moving a lot of things by hand that will move mechanically in the future. Also our equipment is automated and much faster."

Because he just began operating his new equipment in October, he's still waiting to determine the savings.

Bell says the entire process for such massive improvements took a considerable amount of time. He began gearing up for his plant improvements in November 1997 and applied for financing in June 1998. He tried to get preliminary work, such as checking gas lines, finished before purchasing his equipment. He also took into account his need for EPA permits for the new equipment, which he applied for in February 1998 and received in May.

He suggests that business owners applying for financing through the Ohio Air Quality Development Authority keep in mind the legal fees involved. The state supplies an attorney to prepare documents, but Bell had to pay the fees, about $2,600 in his case.

Considering the cost of his project and the savings he'll realize, he felt those fees were reasonable.

"If you're borrowing enough money," he says, "I would say particularly with getting the loan, it would make the whole thing really worthwhile."