Volume 48, Issue 1 - January 2013

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Disappearing Demountables
Are Glazing Contractors Missing Out on In-Demand Interior Glass Partitions?
By Megan Headley


“In the old days, wall systems were very much seen as an interior construction product,” says Nigel Long, CEO of Faram U.S. Inc. in New York. Glazing contractors who count interior glass partitions among their revenue streams might still see these wall systems very much as an interior construction product. But Long is one of several demountable wall system providers who has seen evidence of a potentially challenging change within this segment.

As Long explains it, “The major furniture manufacturers … have taken on board this idea of a wall system and said, ‘you know, we used to make these [partition] panels, let’s take what we know about making panel systems that are 52 or 84 inches high and take them all the way to the ceiling.’ They promoted these office wall systems as furniture rather than as an interior construction product.”

That’s right: one trade’s glazed walls are another’s floor-to-ceiling furniture.

“There are two views about this,” Long continues. “There is logic in doing that, in that a client or end-user can go to a furniture dealer and buy a package of all this stuff. But these systems that have been developed with furniture tend to have challenges in responding to the interior architecture of the building. Furniture is designed to go into the space and sit there; whether your desk is six inches to the left or six inches to the right probably doesn’t matter too much. But when you’re dealing with these wall systems, and they have to connect to the building structure to give you good acoustic performance, then not all the furniture manufacturers have all the skills that lead them to doing that very well.”

Integrating the wall system product with interior construction is getting trickier in many ways, as evidence indicates that some furniture manufacturers are selling systems that, much like those installed by contract glaziers, install on-site using anchors rather than the easily movable compression systems of yesteryear.

“In most, but not all cases, they bring in aluminum extrusion, just like a glazier, they install the metal to the floor and the ceiling just like a glazier and then they glaze the glass, just like a glazier. But, they call this a temporary furniture installation and get around using union installers as well as compliance to the structural standards that glazing requires,” points out Bernard Lax, CEO of Pulp Studio Inc. in Los Angeles.

“In the original systems, years ago, these systems were designed as compression systems where the supporting elements of the walls pushed against the ceiling and the floor, but did not penetrate with an anchor,” Lax adds. “Today they are violating this general concept and use anchors, just like any other extrusion or rail and, as far as I am concerned, are using terminology to break a tax law and steal work away from glazing contractors.”

Tax Loops
The tax aspect comes from the fact that “furniture” systems can depreciate faster than a capital improvement element.

“It can be considered what we call personal property and so when a client purchases a product they can actually take it with them,” explains Rob Wittl, senior product manager for KI’s movable wall products, of these temporary partitions. “From a cash flow standpoint, that’s why many times we are considered like furniture. At the same time, when we’re taken holistically … that wall provides that transition to the furniture, so it’s very important in that selection process that everything marries well together. That’s why we work directly with the furniture manufacturers because our system will integrate with the furniture. At the same time our electrical systems and technology all will need to be integrated and, conversely, we need to work together with the permanent drywall solutions as well.”

Glazing Around the Union
Even if these demountable partitions are installed with the intent of being temporary, more of these systems are meeting today’s demands for transparency with privacy by going from floor to ceiling. And Lax points out that glazing contractors could be missing out on revenue in cases where what are essentially stick-built walls are being installed by other trades.

“Essentially they’re doing the same thing that the glazier’s doing, but they use millworkers and furniture installers to do the work,” Lax says of some interior partition manufacturers.

“What’s happened is these demountable systems used to be the system where they were pressure fit so what you would do is make these walls in a factory and then have a foot on them and then another foot at the top and you’d take a wrench and maybe tighten between the floor and the ceiling. Then they would just put trim pieces on so you wouldn’t see how these things were developed. Somewhere along the line, maybe six, seven years ago, they started making these systems and all they really do is they cut the metal in a factory and they bring it out in pieces and then assemble it in the wall and they shoe it into the floor and they mount it in the ceiling, just like you would if you were a glazing contractor. It’s just that the glazing contractors aren’t selling a system, they’ll use this metal one day and they’ll use this metal another day.

“What it’s doing, is it’s taking away the work from the union glaziers.” Lax adds, “It deprives these companies that are doing this type of metalwork as part of their trade. They’re losing that business over something that is considered a tax benefit, which in reality it shouldn’t be.”

KI’s panel products, for example, are installed by those the company certifies.

“We have certified installers across the country,” Wittl says. Those installers are putting in pre-assembled glass solutions that sit directly on top of the carpeting, as opposed to some systems on the market that are installed direct to concrete. But those installers are not glaziers, per se.

“We like to say ‘KI’s product doesn’t assemble onsite, it installs onsite,’” Wittl adds. “There is a track that connects to the ceiling but it doesn’t need to be reinforced; all of the weight of the suspended ceiling is supporting is the track. The weight of the glass is actually on the floor. That track goes in, the pre-assembled glass panel incorporates into the ceiling track, and then it has its own unitized floor track that sits right on top of the carpeting. Then you bring in the next glass panel.” At least one of the company’s systems, Lightline, has a pre-fabricated seal on the edge of the glass to help link two lites together for a simple solution that goes together in a snap.

Of course, Wittl also points to the use of the company’s installers as a cost saving that clients seek out. “Our material cost is going to be very similar [to glazed walls] but the real cost benefit that we have seen is that the labor is going to be far less,” he says.

While Faram doesn’t install its own systems, its glazed materials aren’t being marketed directly to glazing contractors either. “Faram, for example, generally is selling to the major general contractors around the country and dealing with it still as interior construction, rather than treating it as a panel system that’s going to the ceiling,” Long says. What the general contractor does with the system is out of the glazing trade’s hands.

But Long says selling through the construction trades, versus furniture installers, keeps costs down due to competition.

“It’s generally cheaper for the customer to buy this through a construction route where there’s a lot of construction competition and contractors keep the overall cost of the construction down, rather than a furniture route where furniture dealers as middlemen between the manufacturers and the end-user tend to have more costs and less expertise in the interior construction, which is what these full-height walls need to be,” Long says.

But is there any evidence to suggest that a team of installers certified to a company’s best practices would do a job inferior to those done by a professional glazier?

While Atlantic Contract Glazing Corp. based in Ocala, Fla., routinely installs anchored glazed partitions for office interiors, project estimator Brent Fish is astonished at the idea that furniture companies might be handling glass partitions that install floor to ceiling. “I haven’t really heard of anything like that,” Fish says, adding, “You don’t want a roofer to put in glass, or a framer. It just makes sense for the glazier to be handling the glass.”

Still, Fish does acknowledge that installation guidelines on these types of systems generally come from the product manufacturer. “With these systems, it’s all up to the manufacturer.” However, he adds, “Honestly, it’s nothing someone outside of our division can really do.” Or is it?

A Growing Problem?
These questions become all the more important in considering that glass office partitions only continue to grow in popularity.

“What people are looking for is acoustic privacy but visual openness,” Long says. “What I have seen nowadays is that people want managers and conference rooms to have private work spaces, but ones where they can see out into the workspace, see what’s going on with the rest of their team, and where people can also see into the office. Equally important [is a space] where light comes into the total space.” Thus, glass is all the rage. Long adds, “People have realized that using a glass office front system where you use ½-inch glass in it will provide the same level of acoustic performance as one used to get by putting up one of the old demountable systems or even traditional drywall. You can get the same level of acoustic performance if you join the glass together appropriately as you could from drywall and yet you can get this visual transparency but acoustic privacy.”

For KI, the overall demountable partitions division has grown between 10 and 20 percent over the last couple of years, according to Wittl. “The reason for that is there’s been a real influx of requirements for sustainability and reusability, and obviously when you have a product that can be movable and reusable that really supports that aspect.” He reiterates that the advent of glass has been a result of demand for the connection to the outdoors. “The natural daylighting within a space is very important to clients, and is the reason why they’ve actually moved offices from the perimeters of the building to the core in many situations.”

As the segment continues to grow, it could pay—literally—for glazing contractors to watch how these walls are going in very closely.

Which is Which?
So is it a demountable piece of furniture or an integrated structure? And where is the line that decides which system should be installed by professional glaziers and which by furniture installers? Turns out it’s a fuzzy line at best.

Anthony Burke with the Internal Revenue Service’s (IRS) media relations department says that determining the depreciation of specific systems “depends on the facts and circumstances of each situation.”

However, Burke does offer a list of factors that the IRS considers in determining whether or not something is classified as an inherently permanent structure. Those factors were set forth in a ruling from the tax court in Whiteco Industries v. Commissioner:
1. Is the property capable of being moved, and has it in fact been moved?
2. Is the property designed or constructed to remain permanently in place?
3. Are there circumstances that tend to show the expected or intended length of affixation; that is, are there circumstances that show the property may or will have to be moved?
4. How substantial a job is removal of the property, and how time-consuming is it?
5. How much damage will the property sustain upon its removal?
6. What is the manner of affixation of the property to the land?

This is one instance where the IRS doesn’t offer hard and clear guidelines for recognizing violations, leaving a lot of leeway for those who install these systems.


USG
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