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SCOTTSDALE, Ariz. — A Northeast/Mid-Atlantic regional textile services company owner and the retired chief executive from one of the industry’s major chains received the Textile Rental Services Association’s (TRSA) highest honor at its Annual Convention & Exhibits recently.

The presentation took place at a ceremony that bestowed several accolades on member companies and individuals.

Recognized with the Operator Lifetime Achievement Award for their service to TRSA and the industry were:

• Patrick J. Dempsey, chairman, Dempsey Uniform & Linen Supply Inc., based near Scranton, Pa., serving that state as well as New York, New Jersey, Maryland, Delaware, West Virginia and Virginia.
• Lawrence “Larry” Steiner, retired chairman & CEO, AmeriPride Services, headquartered near Minneapolis. He is the third- generation leader of a family company that’s grown into a multi-national organization operating more than 150 production facilities and service centers throughout the United States and Canada, serving 150,000 customers.

Runners-up were Ed Darling, ARAMARK Uniform Services; and DeNeal Feldman, Economy Linen & Towel Service, Dayton, Ohio.

The Maglin Biggie Lifetime Achievement Award, TRSA’s highest honor for an associate member, went to Mark Brim, president of Brim Laundry Machinery Co., Dallas. He’s the second-generation owner of a company that builds washer-extractors, dryers, shuttle conveyors and touchscreen controls.

Jeff Frushtick, Leonard Automatics, Denver, N.C., was runner-up.

ARAMARK Uniform Services, Burbank, Calif., received the SafeTRSA Innovation Award for its access-control technology designed to prevent wash aisle accidents. Runners-up were Cintas Corp., Mason, Ohio; and Linens of the Week, Washington D.C.

Winner of the LaundryESP® Innovation Award was Roscoe Co., Chicago, for its plant renovation that achieved exemplary savings in the use of water, energy and other resources. Runners-up were ARAMARK Uniform Services, Chicago; and California Linen Services, Pasadena, Calif.

Volunteer Leadership Awards were presented to Bill Hermanns, W.H. Linen Supply Co., Clifton, N.J.; Steve Kallenbach, American Dawn, Compton, Calif.; Matthew Kartsonis, Superior Linen Supply Co., Kansas City, Mo.; and Mark Lewis, Dempsey Uniform & Linen Supply.

ARDMORE, Pa. — Thanks to the 100% “bonus” depreciation write-offs created by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, many laundry and dry cleaning businesses are discovering that capital investments in equipment, machinery and other business assets are more affordable today than ever before. Remember, however, the 100% bonus depreciation write-off is available only for qualifying purchases made by laundry services and businesses in 2011.

Those that have hesitated or postponed making capital investments because of the recent economic downturn might now want to consider how the combined use of incentives and the 100% bonus depreciation can substantially reduce the cost of capital investments. Even funding those new-equipment purchases is easier—at least for a while.

Opting Out

Although the 2010 Tax Relief Act included the best terms ever for bonus first-year depreciation, namely a 100% write-off of the cost of qualifying property, not all laundry and dry cleaning businesses will find it desirable to use front-load depreciation deductions. While it is possible to elect out of bonus depreciation entirely, it is, at least for now, less certain that a laundry or dry cleaning business can step down from 100% to 50% bonus depreciation.

The prime example of a situation crying out for a laundry business to opt out of 100% bonus depreciation is one where there are about-to-expire net operating losses, the value of which would be lost if current-year income were reduced too much by claiming the maximum depreciation allowance. Similarly, a laundry or dry cleaning business that currently is, and in the recent past, has been in a low tax bracket and expects to be in a higher bracket in future years may want to defer depreciation deductions to offset future higher-taxed income.

An election to take a reduced bonus-depreciation deduction was specifically authorized under prior law, when a taxpayer could elect 30%—instead of 50%—bonus first-year depreciation. Until recently, however, it appeared that the only choice for a laundry or dry cleaning business that does not want 100% bonus depreciation was to elect out of bonus depreciation entirely. Now, the IRS has decided to follow Congress’ “General Explanation” for the 2010 Tax Relief Act and permit a step-down election from 100% to 50% bonus depreciation.

Discretionary Incentives

When it comes to a financial helping hand, the best opportunity for laundry and dry cleaning businesses investing in capital improvements may come in the form of discretionary incentives available at the federal, state and local level. Although many of these incentives require some level of job-creation or, at least, job-retention criteria be met in addition to capital investment, there are some notable exceptions.

The Federal New Markets Tax Credit, for example, provides a significant financial incentive for qualified investments made in certain eligible census tracts. Also, Delaware and Virginia offer cash grants based on future capital investment made by existing businesses without requiring a commitment to job creation.

It is the incentives offered by many local jurisdictions that often provide the most significant level of benefit for capital investment activities. Many municipalities have the ability to offer property tax abatement or tax increment financing as tools to encourage capital investment. The property tax-related incentives are typically long-term in duration and provide significant savings for making qualified capital investment.

Funding Based on Need

Last fall’s Small Business Jobs Act created the State Small Business Credit Initiative and funded it with $1.5 billion to strengthen state programs that support lending to small businesses such as laundries and dry cleaning operations (and small manufacturers). Designed to spur up to $15 billion in lending, January saw the first wave of awards to the states.

Under the State Small Business Credit Initiative (SSBCI), participating states will use the federal funds for programs to leverage private lending to help finance small businesses such as dry cleaning plants and laundries that are creditworthy, but that are not getting the loans they need to expand and create jobs.

Last year’s Jobs Act included other provisions designed to help small businesses obtain funding. Among that bill’s many provisions were several new—but temporary—funding programs, such as the U.S. Small Business Administration’s amped-up extension of its lending guarantee programs and fee reductions. In addition, increases in the maximum loan size for the SBA’s 7(a), 504, and microloan programs will help. The 7(a) and 504 loan program maximums would bump from $2 million to $5 million and the microloans would increase from $35,000 to $50,000. Loans made under the SBA Express program would temporarily increase from $300,000 to $1 million. Also included is a temporary allowance for small-business owners to use 504 loans to finance certain mortgages to avoid foreclosure.

The SBA’s CDC/504 Loan Program provides long-term, fixed-rate financing to acquire fixed assets (such as real estate and equipment) for expansion or modernization. It is ideal for small businesses requiring “brick and mortar” financing. Rather than commercial lending institutions, 504 loans are delivered via CDCs (Certified Development Companies)—private, nonprofit corporations set up to contribute to the economic development of their communities.

Gone but Hopefully Not Forgotten

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 provided many opportunities designed to help businesses reap tax benefits for capital investments and provide funding for doing so. The 2011 tax year may be the optimal time to take advantage of the federal, state and local tax or financing incentives that encourage capital investments.

Under the right capital-investment scenario, a savvy business may be able to claim 100% federal bonus depreciation, New Markets Tax Credit, state investment tax credits and municipal property tax abatement on the same capital investment. Or, the laundry business may benefit from the soon-to-expire funding opportunities available today.

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CHICAGO — Gary Dolan, CHESP, director of environmental services at The Village at Penn State, State College, Pa., was recently elected president of the Association for the Healthcare Environment (AHE), formerly known as ASHES, for 2011.

Dolan is AHE vice president and will begin his yearlong term as president on Jan. 1. He has been an AHE member since 1995 and has 19 years of environmental services experience. Dolan has served on the AHE Board of Directors since 2009, and has served on the AHE Conference Planning Committee and Board Advisory Council.

RIPON, Wis. — IPSO honored two of its leading distributors, D&M Equipment and Laundry Equipment Services, with its Award of Excellence. The awards were presented based on sales growth, commitment to the IPSO brand, customer service and after-sale support, the equipment manufacturer says.

BENTON HARBOR, Mich. — Maytag Commercial Laundry recently honored its exceptional distributors, including top award-winner Equipment Marketers, during the company’s 52nd Annual Meeting in Orlando, Fla.

CHICAGO — Laundry services held the top spot among hospital department contracts in 2008 for a third straight year, according to the 31st annual Outsourcing Survey produced by our sister publication, Modern Healthcare.

Contracts for laundry services, clinical/diagnostic equipment maintenance, and housekeeping services represented nearly 63% of healthcare contracts last year, based on the responses of outsourcing companies that participated in the magazine’s voluntary survey.

“A laundry service is at a standstill — a key piece of processing equipment is out of commission, or a natural disaster has left the immediate area without power. What sort of contingency plan should a manager have in place to make certain his customers continue to receive clean goods in a timely manner?”

Long-Term Care Laundering: Albert J. Raymond, Healthcare Services Group, Bensalem, Pa.

DUBOIS, Pa. — Paris Companies has started operations at its new $14 million Healthcare Linen Services plant in east-central DuBois, the company announced.

“The new state-of-the-art plant is one of the most efficient in the world and positions Paris as a leader in providing healthcare linen services in the Mid-Atlantic region,” the company says in a press release.

At press time, Paris said it would share more details regarding the new plant and its plans for growth at a June 11 ribbon-cutting ceremony.

NORRISTOWN, Pa. — A facility that launders the protective garments used by nuclear industry employees is monitoring the buildup of radiation in the Schuylkill River, Pennsylvania environmental officials report, but the low levels detected to date present no danger to the public through recreational contact or fish consumption.

WAYNE, Pa. — Hospital laundry facilities are the most promising sector for reducing consumption and lowering expenses without affecting patient care, Crothall Services Group reports in a recent issue of Celebrations, its company publication.

LANCASTER, Pa. — Gorman Distributors has purchased the right to conduct business for Howard Enterprises, Harrisburg, Pa.

The purchase expands Gorman’s customer base, and Gorman will continue to provide service to Howard’s customers and expand product selections, Gorman says. The purchase, along with recently picked up distributorships for R&B Wire Products, Rema Dri-Vac Corp., Solomatic and others, has made the company into a national supplier.