Parkview Gardens

PARKVIEW GARDENS 697 Karl Gerber, Max Taetle, Nathan Metz & Estate of Bernard Katz, Co-Partners d/b/a Parkview Gardens and Government Service Employees' Union Local 536, Building Service Employees In- ternational Union, AFL-CIO, Petitioner. Case 5-RC-5834 June 30, 1967 DECISION AND DIRECTION OF ELECTION Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, a hearing was held before a Hearing Officer of the National Labor Relations Board. The Hearing Of- ficer's rulings made at the hearing are free from prejudicial error and are hereby affirmed. Briefs have been filed by the Employer and the Petitioner. Upon the entire record in this case, the Board finds: 1. The Employer' contends that the petition should be dismissed on the ground that its opera- tions do not satisfy any of the Board's jurisdictional standards because it is engaged exclusively in the ownership and management of local residential apartments. Alternatively, it contends that, should the Board decide to assert jurisdiction over re- sidential apartments, it should establish standards that are meaningful and appropriate, both in terms of the industry, generally, and in terms of the appli- cation of the Act. The Employer is a partnership of three in- dividuals and the estate of a fourth individual (as named, supra). The partnership d/b/a Parkview Gardens is engaged in the operation of Parkview Gardens, a garden-type apartment project com- posed of 592 units located on 25 acres of land in East Riverdale, Maryland. The project was completed 4 years ago at a cost of approximately $4,500,000 and since that time its annual gross rental revenue has been about $650,000 per year. In excess of $250, 000 of this revenue is transferred interstate to national insurance companies annually in mortgage money payments. In addition, about $87,000 is spent annually for goods and services. The record does not establish the origin of the sup- plies and materials purchased, nor does it show that these materials are manufactured in Maryland. The project is operated by a property manager, who is employed by the partnership. The partnership owns no other property, assets, apartments, or commer- cial enterprises. The individual partners (including the estate of Bernard Katz) consider themselves real estate investors, and, in addition to their interest in Parkview Gardens, they individually, and in vari- ous combinations, have investment interests in other residential properties located mostly in the State of Maryland. Since the enactment of the National Labor Rela- tions Act in 1935, the Board has not exercised its discretionary jurisdiction to the fullest possible ex- tent under the authority delegated to it by Congress. In 1957 the Supreme Court's decision in P.S. Guss d/bla Photo Sound Products v. Utah Labor Rela- tions Board2 denied to the States authority to assert jurisdiction over enterprises as to which the Board declined to exercise its statutory jurisdiction. In 1958 the Board re-examined its jurisdictional poli- cies in light of the experience under its 1950 and 1954 standards and the Supreme Court's decision in the Guss case, and revised its jurisdictional standards3 so that more individuals, labor organiza- tions, and employers could invoke the rights and protections afforded by the statute, establishing ap- propriate monetary standards for different indus- tries.4 However, in revising its jurisdictional stand- ards in 1958, the Board did not establish a stand- ard for the residential apartment housing industry and has, therefore, determined whether or not to as- sert jurisdiction over employees in this industry on an ad hoc basis.5 The Board has asserted jurisdic- tion over apartment house employers in the District of Columbia,6 where the Board exercises plenary jurisdiction7 over employers whose operation of re- sidential apartments affect national defense;8 over employers primarily engaged in the ownership and management of residential properties but who are also engaged in other operations;9 over a large scale interstate apartment house operation; 10 and over employers engaged in operation or management of apartments and other operations which are covered by existing jurisdictional standards." Because of an increasing incidence of cases in- volving this industry, the Board has now decided to establish an appropriate jurisdictional standard for the residential apartment industry. This industry is one of substantial size, it is a highly financed seg- I The name of the Employer appears as amended at the hearing 2353US.I i The Board's 1958 review of jurisdictional policies was consistent with a practice of periodic review of its jurisdictional policies. Coca-Cola Bot- tling Company of Stockton, 110 NLRB 840,841 4 Twenty-Third Annual Report of the National Labor Relations Board, p. 7. 5 In 1959, Congress passed the Labor-Management Reporting and Dis- closure Act, which, inter aha, amended the Act to include Section 14(c)(1). This section permits the Board, subject to certain limitations not here ap- plicable, to limit in its discretion the exercise of its statutory jurisdiction to enterprises whose effect on commerce, in the Board' s opinion, is substan- tial. 6 Westchester Corporation, 124 NLRB 194; The Mensh Corporation, 159 NLRB 156; Shannon & Luchs, Agents for Capitol Park One, Inc., 162 NLRB 1381 See also Pentagon Plaza, Inc, 143 NLRB 1280. ' M. S Ginn & Company, 114 NLRB 112 8 Western Area Housing Company, 107 NLRB 1263 0 E.g , Horizon House, 151 NLRB 766 10 Leisure World Sales Corporation, Inc., 163 NLRB 668 11 Carol Management, 133 NLRB 1126, Claiborne Towers, Inc., 126 NLRB 187; Mariemont Inn, 145 NLRB 79 See also Pentagon Plaza, Inc , supra. 166 NLRB No. 80 698 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ment of our economy, and its operations exert a substantial impact on commerce.12 Apartment house construction in the United States has risen from 23.9 percent of all housing construction in 1961 to 33.8 percent in 1965, and construction starts for multifamily dwelling units have increased 67 percent in 4 years- 13 In 1965, permits were is- sued for the construction of $3.5 billion worth of multifamily units, i.e., for projects containing five or more units, in the United States. The apartment housing industry is already very large and con- tinually growing. There is a growing trend toward the corporate ownership of such real estate. In the past the laws of most States ". . . for many years prohibited the chain ownership of property by institutions, such as banks and insurance companies. 1114 In recent years, however, the need to promote capital pools for in- vestment in rental housing has led many States to authorize institutional ownership of apartment projects. 15 With this growth of corporate ownership, the in- dustry has become highly competitive. As a result it now provides many additional services to the housing consumer. Among them are reception and answering services, valet services, maintenance services, high speed elevators, recreational and so- cial facilities such as swimming pools, tennis courts, golf courses, varied function rooms, and the like. These added services and facilities require the ex- penditures of large sums of money and additional staffing for their operation and maintenance. In the case of a particular apartment house, purchases of materials and supplies may or may not directly in- volve interstate commerce. But, as shown by the facts in this case, an apartment development of any size is almost invariably financed by interstate financial institutions. Moreover, in the aggregate, purchases necessary for furnishings, appliances, and other maintenance supplies and materials of the industry clearly have a substantial impact on the interstate business operations of supplying firms and thus on interstate commerce. In addition, the operations of the indus- try facilitate the movement and placement of per- sons throughout the United States by providing adequate housing facilities within areas offering em- ployment. This is clearly illustrated by the develop- ment around military installations of apartment housing over which the Board has, on occasion, as- serted jurisdiction. however it is also observable in industrial areas where privateindustry has obtained large government contracts. In short, the growth of the apartment housing industry has been nourished 12 Whether the Board has jurisdiction over a particular operation is not to be determined by confining judgment to the qualitative effect of the ac- tivities immediately before the Board in a particular case See N L R B v Fainblatt, et al , 306 U.S. 601 13 U S. Department of Commerce, Business and Defense Services Ad- by a demand for housing created by our national economic development. The Board is aware that in some situations the impact on interstate commerce of labor disputes in the industry is more clearly identifiable than in others. Accordingly, although we have decided to assert jurisdiction over employers in the apartment housing industry, we are of the opinion, and find, that it will effectuate the policies of the Act to limit assertion of jurisdiction to apartment housing pro- jects which receive at least $500,000 in gross revenues per annum. In making this determination, we have been guided by our experience in asserting jurisdiction over retail concerns and over concerns in the hotel and motel industry, where we have ap- plied the $500,000 annual gross revenues standard. We are persuaded that this standard will enable the Board to exercise jurisdiction over that part of the industry which exerts a substantial impact on com- merce, wit out unduly burdening the Board's processes bj involving it in a multitude of cases whose total economic significance is slight. Moreover our experience persuades us that it is desirable to have a fixed dollar standard of general applicability to the industry, rather than to deter- mine the impact on commerce on some other basis, because the ease of application of such a standard as well as its predictable application to given cases, results in advantages to employers and employees in the industry, and to the Board. In the instant case, the Employer's operations are representative of operations in the apartment hous- ing industry generally. As indicated previously, Parkview Gardens is composed of 592 units which were built at a cost of approximately $4.500.000. It has an annual gross revenue of $650,000 per year. In excess of $250.000 of the gross revenues are dis- tributed in mortgage payments to national insurance companies annually. Its normal yearly operating and maintenance figures show that it spends $30,000 for fuel oil, $24,000 for cleaning materials, $3-400 for roofing repairs, $36-40,000 for electrici- ty which is purchased from Potomac Electric Power Company, and $6-7,000 for gas. In addition to the above some of the Employer's business ex- penditures mentioned in the record show that $8- 9,000 is spent annually on advertising, and $2,000 for accounting services. In sum, the record herein establishes that more than one-half of the Em- ployer's annual gross revenue ($650,000) is paid out each year for the operation and maintenance of Parkview Gardens. A substantial portion of such revenue is utilized in the purchase of materials, sup- plies, goods, and services which move in interstate ministration, Construction Review. Vol 12, p. 17, No 12 14 Downs, Jr, James C , P,inciples of Real Estate Management, 1964, p 436 1, Ibid PARKVIEW commerce. Accordingly, we find that the Em- ployer's operations affect commerce within the meaning of Section 2(6) and (7) of the Act, and, as the Employer's annual gross revenues exceed $500,000, we find that it will effectuate the policies of the Act to assert jurisdiction herein. 2. The labor organization involved claims to represent certain employees of the Employer. 3. A question affecting commerce exists con- cerning the representation of employees of the Em- ployer within the meaning of Sections 9(c)(1) and 2(6) and (7) of the Act. 4. We find that the following employees of the 16 An election eligibility list, containing the names and addresses of all the eligible voters, must be filed by the Employer with the Regional Director for Region 5 within 7 days after the date of this Decision and Direction of Election The Regional Director shall make the list available to all parties to the election. No extension of time to file this list shall be GARDENS 699 Employer, as stipulated by the parties at the hear- ing, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: All building custodial employees of the Employer at its 6400 Riverdale Road, Riverdale, Maryland, location, including maids. janitors, and painters, but excluding maintenance engineers, guards, office clerical employees, and supervisors, as defined in the Act. [Direction of Election 16 omitted from publica- tion.] granted by the Regional Director except in extraordinary circumstances Failure to comply with this requirement shall be grounds for setting aside the election whenever proper objections are filed Excelsior Underwear Inc., 156NLRB 1236