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News from the Industry

October 11, 2010
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Bud Belanger, industry pioneer, passes away
Lionel E. (Bud) Belanger, former CEO of Belanger, Inc., died Monday, Dec. 1, 2008, in his winter home in Florida. He was 78.

Belanger, whose company has been a pioneer in the field of automatic carwashing, was credited with introducing cloth to the carwash industry. He is pre-deceased by his brother, James A. Belanger, founder of Belanger, Inc., who passed away last May.

Upon retiring from Belanger, Inc. in 1994 after 17 years as CEO, Bud enjoyed spending his free time pursuing his longtime passion of golf, as well as traveling with his wife between their Northville, MI, home and Florida home. Belanger is now operated by second-generation members of the Belanger family.

In April 2002, Belanger was inducted into the Carwash Hall of Fame at the International Carwash Association’s (ICA) Car Care World Expo in Chicago.

Hoffman and IBA carwashes win tax appeal in NY
After a lengthy appeals process, Hoffman Car Wash, Inc., has won a petition to have its in-bay automatic carwash facilities exempt from the imposition of sales tax under New York Tax Law 1115 former (t), according to Tom Hoffman, Jr., CEO.

“It is over!” Hoffman said. “Our interpretation of the 1997 Sales Tax Law that cash transactions at coin operated in-bay automatic carwashes prior to December 2005 were not subject to the collection of NYS Sales Tax has been upheld.”

New York State Division of Taxation cannot appeal this decision. At issue was whether an exemption from tax under Article 28 of the law applied to in-bay automatic carwashes as well as to self-serve facilities.

The Division of Taxation argued that customers do not wash their vehicles when they use an in-bay automatic, although the court and Hoffman disagreed with that interpretation. The court has ruled the exemption does include in-bay automatic carwashes and that a customer, by inserting money and driving their vehicle into the IBA stall, is in fact washing the car on their own.

According to Hoffman, those carwash operators who filed for a refund within two years of the close of their audit can receive money back.

Debt saga continues for world’s largest carwash firm
Banks that lent £450m to Carlyle Group, owner of the world’s largest carwash company, have started the process to restructure the debt.

Caryle, a private-equity giant, used the nearly (US) $680 million loan to purchase the carwash company in 2006.

FTI Consulting and Close Brothers are believed to be two of three restructuring experts being considered as advisors to the banks. In October, PC&D reported that Carlyle had already lined up NM Rothschild as an advisor.

The practice chosen will represent both senior and mezzanine debt holders. Carlyle asked lenders in October to restructure the debt acquired when the company purchased IMO Car Wash, owner of 900 carwashes in 14 countries. IMO’s 300 UK sites do business as Arc Clean Car Centres, but its largest presence is in Germany where it has 335 IMO sites.

IMO was founded in Germany in 1965 and has had a series of private-equity owners since 1998 when it was bought by Bridgepoint Capital in a £116m (USD $203 million) management buyout. IMO was taken over by JP Morgan Partners in 2004, who then sold it on to Carlyle.

Drought ends for much of Southeast
The drought that had been plaguing the Southern states for about two years has been declared officially over for most of the states.

A wet December helped areas affected by the small amounts of rainfall and depleted reservoirs and resources. Northeast Georgia and the western portions of both North and South Carolina are still in a drought.

Last year, PC&D reported how many carwashes were affected by drought restrictions, which in some cases limited their hours of operation or even closed down operations all together. Many carwashes faced an uphill public relations battle because many municipalities wrongly considered them water wasters.

In the meantime, the U.S. Small Business Administration (SBA) is giving out loans to small businesses and nonprofits in Tennessee that were hurt by the drought.

The federal economic injury disaster loans are available up to $2 million with a 4 percent interest rate. The SBA is qualifying applicants based on the size and type of the business and on what financial resources are available.

History Channel takes a look at carwash industry
The History Channel, a cable television station, recently went “behind the suds” to uncover the secrets of the carwash industry in an episode that aired Dec. 8, 2008 at 8 p.m. as part of its Modern Marvels series. (The episode is available for purchase on DVD at www.history.com.)

The show started with snippets of interviews with carwash customers who gave various reasons for using professional carwashes and wanting clean, shiny cars, including one customer who said, “It brings shiny girls.”

The segment included footage of a chain carwash in 1925 and also showed extensive video of the 7+ acre Cloister Car Wash facility in Sinking Spring, PA, considered the largest carwash in the U.S. That site, which has been featured in Professional Carwashing & Detailing, includes a belted conveyor carwash, dog wash, motorcycle wash, self-serve facility and large lobby.

In addition to showcasing the Cloister site, the episode included interviews with Russell and Randy Coleman, president and vice president, respectively, of Jim Coleman Co., a well-known manufacturer of carwash systems. The Colemans explained the purposes behind pieces of equipment for conveyor carwashes, as well as the features of in-bay automatic (IBA) washes, by showcasing the manufacturing process at their Houston, TX, facility.

The episode also went to great lengths to give viewers an idea of how much environmental damage can be done by washing at home. Randy Coleman dug into an IBA pit with a shovel to show just how much dirt and debris is washed off a vehicle and the narrator explained that during a home carwash this is washed into local storm drains and into waterways — although it is prohibited by the Federal Clean Water Act.

After explaining the basic mechanics of conveyor and IBA carwashes, the Modern Marvels crew met with Victor Scalco of Mothers, a manufacturer of detail products, as well as the Dallas, TX, home of Auto Wax, an ITW Company that manufactures Auto Magic, Body Magic and Clay Magic products.

In the final segment of the episode, viewers were treated to some interesting heavy duty carwashes. The show’s producers visited Energy Solutions in Clive, UT, where radioactive waste is carried by train cars that are cleaned in a “nuclear carwash.” The show then took us to an undercarriage and wheel wash for salt trucks run by Stanton in the Northeast.

EZ Lube files for bankruptcy
EZ Lube, the national chain of fast lube centers, has filed for bankruptcy protection after being affected by high gas prices, decreased consumer confidence and bad press following an investigative report by a local television station.

The CA-based chain of 82 oil change stores and its Xpress Lube-Tech affiliate filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court for the District of Delaware following losses of $8.1. million for the first nine months of 2008, and a $44 million loss in 2007.

EZ Lube reached an agreement to sell substantially all of its assets (about $113 million) to EZ Lube Acquisition Co, an affiliate of its existing lenders Goldman Sachs Group Inc and funds managed by GSO Capital Partners LP. The company also has liabilities of about $114.4 million.

The company, which employs nearly 1,000, will be allowed to continue operating between the bankruptcy filing and the sale because Goldman Sachs has agreed to provide the company’s debtor-in-possession financing.