Employee Spotlight: Brian Kappen

EACH MONTH, ENVIROFORENSICS RECOGNIZES TALENTED INDIVIDUALS, LIKE OUR SENIOR GEOLOGIST AND PROJECT MANAGERBRIAN KAPPEN. GET TO KNOW BRIAN INSIDE AND OUTSIDE OF ENVIROFORENSICS. 

Headshot of Brian Kappen in front of sunlit cornfield

BRIAN KAPPENSENIOR GEOLOGIST AND PROJECT MANAGER 

QUESTION: WHAT’S YOUR BACKGROUND AND CAREER PATH?
ANSWER: My background is in hydrogeology, which I started to pursue after a less than stellar fifth semester of engineering courses. It’s been 17 years since so my career path appears to be environmental consulting.   

Q: HOW DO YOU FEEL ABOUT BEING RECOGNIZED BY YOUR COWORKERS?
A: I’m honored  We have a good crew in Wisconsin, and I appreciate the support of Rob and Wayne on technical projects. 

Q: WHAT DO YOU ENJOY ABOUT WORKING AT ENVIROFORENSICS?
A: I like the size of EnviroForensics, which allows the company to be nimble and employees to be more than just a number. I also like the culture of hard work and camaraderie. Also singing happy birthday at 7:40 on Monday mornings once a month for staff meetings is always fun. 

Q: WHAT IS ONE OF YOUR MOST EXCITING PROJECTS AT ENVIROFORENSICS?
A: One of the most interesting projects has been a drycleaner in Madison, WI because of the scope of the project – a  big plume deep in bedrock and neighborhood-wide VI risk, and the effectiveness of the remedies that were implemented. We’re also testing for PFAS before the site can be closed.  

Q: WHAT IS YOUR LIFE LIKE OUTSIDE OF ENVIROFORENSICS?
A: I have two daughters aged 10 and 8 who are very nice to me (hoping that continues). I spend the warm few months outside as much as possible – mountain biking, camping, disc golfing, and during a non-COVID year festival going – and the cold months hibernating and drinking dark beer. 

How drycleaners can maximize value in real estate transactions

ENVIRONMENTAL CONTAMINATION ISSUES CAN SERIOUSLY IMPACT COMMERCIAL PROPERTY AND BUSINESS DEALS. IN THIS BLOG, WE’LL EXPLAIN HOW TO GET THE MOST MONEY FOR YOUR REAL ESTATE OR BUSINESS TRANSACTION AND HOW TO PROTECT YOURSELF DURING THE PROCESS WITH ENVIRONMENTAL, FINANCIAL AND LEGAL COUNSEL. YOU’LL LEARN HOW TO MINIMIZE YOUR RISK BY PREPARING FOR UPCOMING REAL ESTATE TRANSACTIONS AND INCREASE VALUE WITH ALTERNATIVE FUNDING OPTIONS AND EXPERT RESOURCES.

Drycleaner sitting at table negotiating real estate transaction of property and business

As environmental consultants, we keep a close eye on commercial real estate trends, and we’ve recently seen indicators that the commercial real estate market is experiencing a recovery and transactions are on the rise in response to falling interest rates. We’ve also seen an increase in the buying and selling of businesses, as investors look for strategic opportunities to pick up a struggling business for cheap. 

WHAT DOES THIS CHANGE IN REAL ESTATE TRENDS MEAN FOR THE DRYCLEANING INDUSTRY?  

The current economic downturn and the associated market disruptions will be another catalyst of change for the drycleaning industry. Drycleaner owners need to consider if now is the right time to buy, sell or refinance their business or property. 

All three of these options will likely prompt environmental due diligence activities like Phase I and Phase II Environmental Site Assessments (ESAs) as businesses change hands, properties are sold, or banks re-evaluate loans. Environmental contamination problems could be identified during this process, so now’s a good time to evaluate your options, strategy and environmental preparedness.    

WHAT LEGAL LIABILITIES DO YOU NEED TO CONSIDER AS A BUYER OR SELLER? 

It’s important to consider the legal implications of these real estate transactions and the environmental due diligence through your strategy – so it may be wise to consult a real estate attorney to help navigate your deal. Simply taking advantage of the low-interest rates can trigger the need for more collateral to secure bank loans. A few examples for drycleaners include:    

  • Selling your business or merging with another drycleaner 
  • Refinancing your bank loan for a better interest rate 
  • Acquiring new machines or a vehicle 
  • Adding on a new addition or remodeling the business 
  • Buying a new location like a drop plant 

Any time a lending activity in the commercial sector involves the use of an owned property as collateral, there is going to be a reassessment of the property’s value, and that is going to include an evaluation of its environmental condition. Especially if it’s a property with a history of drycleaning operations. It’s an unfortunate truth that drycleaners typically will be required to do a phase II just because they are a drycleaner. Sometimes it’s inevitable and unavoidableespecially when you’re not in control of the due diligence like in the case of a neighbor or landlord selling or refinancing 

A lot of times people wait until after they are facing an environmental contamination issue head-on to look for funding options, maybe they are being sued or have received a letter from their regulatory agency, but either way, now they’re in a reactive position trying to find a way to pay for the hefty cost of cleanup. 

There are funding options available to drycleaners that include insurance options to buffer risks like historical commercial general liability (CGL) insurance policies or purchasing Pollution Legal Liability (PLL) insurance if you don’t already have it. You can add value by purchasing PLL policies, especially if you are unable to locate historic CGL policies or are interested in an extra layer of protection. Pollution policies can cover new conditions at a site from the inception of the policy and onward or for unknown pre-existing conditions. PLL policies focus on the costs and risks associated with potential contamination both on and off the property, as well as unanticipated contamination found during site cleanup and/or redevelopment. These policies can be used as a nice addition to your funding strategy to save deals and manage legal liability. 

HOW CAN  YOUR OLD COMMERCIAL GENERAL LIABILITY (CGL) INSURANCE POLICIES ADD VALUE TO YOUR DRYCLEANING BUSINESS? 

CGL insurance policies protect the policyholder from third party liability. For a drycleaner, historical CGL policies directly from the policyholder or from predecessors that pre-date any absolute pollution exclusions can be used to help pay for environmental investigation and cleanup costs. These policies should typically pay for the site investigation to determine the nature and extent of the contamination, legal defense fees, contamination remediation, locating any other responsible parties who should also be held liable for the contamination and interfacing with the regulatory agency on your behalf 

There are three different ways that CGL insurance policies can add value to your drycleaning business.  

1. Be proactive and pull together insurance information to create a safety net in case environmental issues are uncovered down the road.  

These policies can be worth millions of dollars. Add value to your business by giving yourself that cushion. If you’re prepared for the future, it’ll be less stress and less money out of pocket to formulate a strategy if you know what kind of coverage you have available to you. This first scenario is really the most ideal to pull together your policy information without a deadline – and if you’re unable to locate it yourself, you can hire an Insurance Archeologist to help you track it down.  

2. If you’re already in the environmental due diligence, it’s time to pull together a team of experts to formulate a strategy.  

When you’re unprepared, environmental contamination is going to be a disruption. It can cause a business or property owner substantial stress about how they are going to react to the news of contamination. But this stress can be avoided with the right team in place to help you weather this storm. Addressing the environmental contamination by cleaning it up will add value back to your property, so it’s a win-win situation. Plus, you’ll be off the hook with the regulatory agencies. 

3. If you’ve already spent money out of pocket for environmental investigation and cleanup costs, you may be able to recoup the money.   

You may not be able to recover all that has been spent but you’ll be able to put money back in your pocket. That is certainly more valuable than being out whatever was spent on cleanup efforts in the first place. 

As you can imagine, as we get further away from the 1985 Absolute Pollution Exclusion (APE) timeframe, the more difficult it can become to track down usable policies that can protect you from environmental liability. And this is exactly what insurance archeology is for, but the further you get from the APE, the more likely it is that the records have been destroyed and potential leads are diminished 

Now is a good time to look at pulling together your own policies, and if you find that you’re having difficulty locating policy information on your own, don’t give up. Consider hiring a professional insurance archeologist to be a part of your team.  

WHAT’S YOUR NEXT STEP? 

So, whether you’re the buyingselling, or refinancing a dry cleaning businesspulling together any applicable insurance policies to address any unwelcome environmental contamination can not only save a real estate transaction or lending deal, but it can add value to the property. For the seller it will show there is a funding source to address contaminationwhich would otherwise devalue the property. And for the buyerwho knows that the property’s environmental issues are being addressed now, so that if later down the road they want to sell, they have peace of mind that its free and clear of contamination. Call an environmental consultant who can coordinate your team to maximize your business value 

Watch to the webinar recording to hear what fellow drycleaners asked during the Q&A portion.

Special thanks to DLI and Rubin & Rudman for their partnership on this webinar. 

How to pinpoint when a Perc release occurred

THREE METHODS TO DETERMINING WHEN PERC WAS RELEASED AND IF THERE ARE OTHER RESPONSIBLE PARTIES TO SHARE IN THE LIABILITY

Drum spilling drycleaning chemical Perc onto pavement

BY: JEFF CARNAHAN

Let’s get technical. With the recent and anticipated increases in the number of drycleaner businesses and properties changing hands, we’re seeing an increase in environmental issues needing to be addressed. It’s rare for a single operator to have occupied a drycleaning business property through the years, especially as far back in time as the 60’s or 70’s. If environmental contamination is discovered at a property with a history of drycleaning operations, every one of the corporate entities that conducted business at that location is subject to claims of the release(s) that occurred during their time at the property.

WHO IS RESPONSIBLE FOR A PERC TEST, INVESTIGATION, AND CLEANUP?

Can Perc releases be accurately age dated? The answer isn’t a straightforward yes. It can be extremely difficult to tell exactly when an environmental release occurred, but there are scientific methods available to help bracket a range of dates when it was likely. There are three ways to pinpoint when a perc release has occurred. I’ll explain this by using tetrachloroethylene (PCE), also known as Perc, contamination in the groundwater as an example.

1. DETERMINING THE AGE OF THE PERC RELEASE

One way to determine the relative age of a release is by evaluating the breakdown products of Perc. The process goes like this: trichloroethene (TCE)  dichloroethane (DCE)  vinyl chloride (VC)—these are known as “daughter products”, which come from decaying Perc. Perc is considered a recalcitrant compound, meaning it is pervasive in the subsurface environment and doesn’t break down easily under natural conditions. When Perc is released into a typical groundwater environment, where an ample amount of oxygen is present, it generally breaks down very, very slowly, if at all. We have seen groundwater plumes of Perc that are over 50 years old that haven’t degraded at all. Significant natural breakdown of Perc only occurs in groundwater when there is very little oxygen, and the microorganisms that thrive in those anaerobic conditions are abundant. These are the factors that can equate to the degradation of Perc to TCE, DCE, and VC. The longer the plume has existed under these optimal conditions for breakdown, the more daughter products there are. The sequence can be illustrated by the following sequence based on relative proportions of these compounds:

Infographic depicting PCE daughter products released over time as a way to determine the age of a Perc release

As mentioned, using the ratio of breakdown products to Perc is not singularly a reliable method for estimating the age of the Perc release in groundwater where there is plenty of oxygen.

Learn more about what makes cleaning up Perc spills so expensive

2. DETERMINING HOW FAR THE PERC RELEASE HAS TRAVELED

Another approach is to determine the horizontal extent of the contaminated groundwater plume. In general, the groundwater velocity multiplied by the amount of time since the release occurred equals the distance traveled. Fundamentally, if you know the velocity of the groundwater and the distance the groundwater plume has traveled, you should be able to mathematically determine the amount of time that has passed since the release entered the groundwater. Clearly, it is much more complicated than that and it takes a seasoned hydrogeologist to perform those calculations. Often, a computer model of groundwater conditions needs to be created to account for the vast multitude of variables that come into play.

This graphic is an example of a drycleaner releasing Perc into groundwater in the subsurface.

 

3. DETERMINING WHO IS RESPONSIBLE FOR THE PERC RELEASE

The age dating approaches are useful if you are trying to determine when a release of Perc happened at a single property and get a feel for who was operating at that time. A more complicated scenario is when one is trying to determine the age of a Perc release when it has merged with another release from a different property. This is known as a comingled plume. In this scenario, scientists may rely on evaluating the presence of differing chemical isotopes within the Perc found in the distinct groundwater plumes. To understand this approach, the scientist must have information on the original product that the drycleaner used over specific time periods. Different manufacturers of Perc had unique product formulas from their competitors and recycled Perc would have a very different formula from virgin Perc. Under this set of facts, the isotopic analysis, or fingerprint of the product, can be useful.

Find out how environmental forensics can help determine who is liable for a contaminant release

In comingled plume studies, the isotopic fingerprint of each source is established using these methods. In theory, this is not too difficult and would require just a couple of samples in the source area and at the leading edge of the plume. However, in actuality age dating a plume is more complex. As mentioned above, a precondition is that we know the isotopic fingerprint of the Perc product that was used at a given time and location versus the isotopic fingerprint of the Perc product used at a different time and location. If one is trying to establish the age of a release at the same site, we need to know the date when the Perc products that were used switched from one to another.

FIND AN ENVIRONMENTAL CONSULTANT THAT UNDERSTANDS PERC

These three approaches help the investigation process move forward and allow drycleaners to pinpoint when a Perc release happened. As with many things in life, there’s ambiguity, especially to an untrained eye. This is why it’s so important to find an environmental consultant who understands the complexity that comes with environmental work at drycleaning businesses. They will be able to guide you through this investigation with clear goals knowing which challenges may arise and which challenges that can be avoided.

As always, we’re here to support our friends in the drycleaning community and want to see the best outcome for you no matter your situation.

Learn more about how we can assist you through the environmental investigation and cleanup process. Fill out our contact form.

 


As seen in Cleaner and Launderer

Headshot of Jeff CarnahanJeff Carnahan, President
Jeff Carnahan, LPG, has 20+ years of environmental consulting and remediation experience. His technical expertise focuses on the investigation and interpretation of subsurface releases of hazardous substances for the purpose of evaluating and controlling the risk and cost implications. He has been a partner of the drycleaning industry for the past decade, and is a frequent contributor to the national drycleaning publication Cleaner & Launderer. He is an industry leader in understanding that environmental risk includes not only cleanup costs, but also known and unknown third-party liability.