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Hotel Lawyers -- featured subjects and articles
Meet the Money® 2014

ADA defense and compliance

EB-5 financing

Workouts, bankruptcies & receiverships

Hotel Management Agreements

Hotel Franchise & License Agreements

Hotel industry trends

This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer. Please contact me at Jim Butler at jbutler@jmbm.com or 310.201.3526.

Published on:

 

LOS ANGELES—The Meet the Money® 2017 conference will bring hospitality industry leaders together from May 8-10 in Los Angeles at the Hyatt Regency Hotel LAX. This marks the conference’s 27th year, where hotel owners, operators, developers, consultants, investors, brands, lenders and other capital providers will gather to get deals done and discuss and catch up on the latest issues and opportunities involving the hotel industry.

“This year’s conference is particularly important,” said Jim Butler, Chairman of JMBM’s Global Hospitality Group®. “The hospitality industry is at an interesting point in mid-2017. Intriguing opportunities will be available for the diligent and well-connected, but greater perils will also challenge investors. This conference will present many experts’ perspectives on what properties in which markets will thrive or perish. It is a great time to be an entrepreneur in the hotel industry.”

The theme this year is “Opportunity or Peril? Finding the right key to the right door.” Industry experts from top brands across the country will focus on the state of the industry and strategies that will aid in discovering opportunities and avoiding risks. Panelists will join discussions on successful development strategies, current capital markets, creative solutions for existing properties, foreign investment, and a range of other topics. The full conference program is now available online.

Since its inception in 1990, Meet the Money® has connected thousands of senior hotel financing experts, developers and hospitality insiders. Keynote speaker Richard K. Green, Ph.D., director of the University of Southern California Lusk Center for Real Estate, along with over 130 influential heavyweights in the industry have been assembled to provide insight on navigating the current market. Additional presentations will include a spotlight interview with Trump Hotel CEO Eric Danziger, and a CEO panel with top executives from Condor Hospitality Trust, Monday Properties, Interval International, CMB Regional Centers, and Aimbridge Hospitality. A full list of all conferences speakers can be found on the conference website.

About Meet the Money
For 27 years, Meet the Money® has provided a unique environment for forging relationships and gaining up-to-the-minute information about the world of hotel investment and finance. The conference is big enough to attract heavy hitters, but small enough to network with them. At Meet the Money®, there is time, atmosphere and availability to have meaningful meetings with deal-making potential. Register now at MeetTheMoney.com.

About Global Hospitality Group® of JMBM
The hospitality attorneys in the Global Hospitality Group® of Jeffer Mangels Butler & Mitchell LLP comprise the premier hospitality practice in a full-service law firm, and the most experienced legal and advisory team in the industry. Our team of hotel lawyers and business advisors has more than $71 billion in hotel transaction experience, involving more than 3,800 properties located around the globe, and providing one of the most extensive virtual data bases of market terms for deals and financings.

Published on:

1 April 2017

JMBM’s ADA Compliance and Defense team, led by my partner Marty Orlick, continues to help hotels and other businesses achieve compliance under the Americans With Disabilities Act (ADA), and is actively defending numerous ADA lawsuits brought against our clients.

As we predicted, more and more of these lawsuits allege that a company’s website and reservation system is not accessible to visually impaired customers. In his article below, Marty Orlick reports why a recent U.S. District Court decision may affect the future of ADA website litigation, and urges hoteliers to ensure their websites are accessible.

 

Judge Dismisses ADA Website Lawsuit
by
Martin H. Orlick, Chair, JMBM’s ADA Compliance & Defense Group

In September 2016, we published an alert that a group of plaintiff’s ADA lawyers had threatened a number of businesses – including hotels – with litigation claiming their websites failed to comply with “ADA Guidelines.”  (Read ADA Compliance & Defense Lawyer: ADA Website Accessibility Lawsuits Escalate.) These lawsuits have since been filed with greater frequency.

Since then, a number of threats have turned into lawsuits seeking injunctive relief (website accessibility), a multiple of $4,000 minimum statutory damages under California’s Unruh Civil Rights Act (per visit to the website or from being deterred from visiting the website), attorneys’ fees and litigation costs.

Years ago, the Department of Justice (“DOJ”) adopted rules requiring all federal agency websites to conform to the WCAG 2.0 A and AA Success Criteria as a means of providing accessible websites to persons who are blind, low vision, color blind or who suffer cognitive disabilities. In 2010, the DOJ issued a Notice Of Proposed Rulemaking (NOPR) stating that it intended to adopt formal ADA Guidelines for state and local government agencies to meet when designing websites. The DOJ intended to adopt the WCAG 2.0 A and AA Success Criteria for state and local government websites.  Justice then announced that it intended to adopt these same basic standards for private businesses’ websites.  But the DOJ withdrew its NOPR and has yet to issue final rules regarding web access standards for state and local agencies or private businesses.

ADA website lawsuit violates due process

Last week, in what is a ground breaking decision of particular importance to the hospitality industry, the U.S. District Court for the Central District of California threw out a serial plaintiff’s lawsuit which alleged that Domino’s Pizza’s website violated the Americans with Disabilities Act (ADA) and related California anti-discrimination laws by not conforming to the WCAG 2.0 A and AA Success Criteria. CONTINUE READING →

Published on:

22 March 2017

Unless Congress acts in time, a critical part of EB-5 financing will lapse on April 28, 2017

The Regional Center program was enacted in 1992 as a “pilot project.” Since then, it has been renewed or extended many times by Congress, with the current extension due to sunset April 28, 2017. Combined with some negative comments by a few foes of the program, some have begun to wonder out loud if the end of EB-5 financing is near. And, if Congress does not act soon, it would have a serious impact on the program.

Important people, is an important part.

What will likely happen if Congress lets the EB-5 program sunset on April 28

Most people involved with the EB-5 industry believe there is little chance the program will not be extended or made permanent. This “pilot program” has been renewed for more than 20 years, and in the last five years has provided hundreds of thousands of jobs for US citizens, and billions of dollars of vitally needed capital for both public and private facilities that would not otherwise have been feasible.

The breakthrough on resolution could come next week (the week of March 27)

Since President Trump’s inauguration, the Administration and Congress have been focused on transition matters, appointments and confirmations, and related issues. However, insiders now believe that by the last week of March, EB-5 industry groups will be able to meet with members of Congress and work through some reasonable resolution of all concerns. A new bill is likely to be introduced shortly thereafter. CONTINUE READING →

Published on:

The Lodging Industry Investment Council (LIIC) met in Los Angeles during the American Lodging Investment Summit 2017 and our friends from Hotel News Now (HNN) were on the scene.

Some of us were asked by HNN for our take on where the hospitality industry is headed in 2017 — including my friend and fellow LIIC board member, Mike Cahill, who will present the “LIIC Top Ten” hospitality issues of the year at the national hotel finance and investment conference, Meet the Money®, as he does every year.

To read my comments about why 2017 will be a year of change, as well as comments by my associate, Wei Deng, regarding the impact the possible depreciation of Chinese currency could have on the industry, see HNN’s coverage: LIIC: Hot takes on industry hot button issues.

I was also interviewed in the video accompanying the article, regarding predictions for M&A in 2017 (as were my colleagues Phil Ribolow of Deutsche Bank, Mike Cahill of Hospitality Real Estate Investors, Andrea Foster of Marcus Hotels, and Gary Gray 24/7Hotels). My comments in that video are as follows:

“It must have been about 20 years ago at one of our Meet The Money® conferences, an industry leader predicted that in the next few years there would be two hotel companies. I don’t remember which ones they were – I think it was Hilton and Marriott. Interestingly, the consolidation – the urge to merge – has been extremely strong. And while one can look at the brands and think that the smaller brands – a Hyatt, a Wyndham – might be more prone to being acquired. I’m not so sure that’s true. The scale of capital that is available really makes the entire hospitality industry subject to acquisition. The urge to merge is inevitable.” CONTINUE READING →

Published on:

1 February 2017

Theft of confidential data by hackers is a major threat to businesses worldwide and the hotel industry is no exception. Hoteliers remain vulnerable to hackers seeking confidential information such as guests’ credit card data and employees’ personal information. They are also vulnerable in other ways. In a recent hotel breach, the hackers did not go after confidential data, but rather sought a ransom payment after taking control of the hotel’s technology. My partner Bob Braun, senior member of JMBM’s Global Hospitality Group® and co-chair of JMBM’s Cybersecurity and Privacy Group, describes what happened, and shares what hotels can do in response to such threats.

Hotels and Ransomware — Something Special
by
Robert E. Braun

Last year, at the Global Hospitality Group’s Meet the Money™ Conference, I participated in a panel on Cybersecurity and we discussed how cybersecurity issues affect the hotel industry.  One of the comments was that hotels, more than most private industries, have to take into account the kind of physical harm that might be done by a hacker. We noted that not only are guest information systems targets, but also the life and safety systems – HVAC, elevators, electricity and so on.  We concluded that while financial theft could impact a hotel and its reputation, a hack of the physical structure of a business could put the hotel out of business.

Locked Out

Our discussion turned out to be prescient when, this week, Romantik Seehotel Jaegerwirt, in the Austrian Alps, had their systems frozen by hackers, which resulted in the complete shutdown of hotel computers.

The 111-year-old hotel had already been targeted by hackers twice.  This time, however, the hackers breached the key card system, made it impossible for guests to enter their rooms and prevented the front desk from reprogramming cards.

The hackers demanded €1500 in Bitcoin, promising that control of the key card system and room locks would be returned.  Management of the hotel, fully occupied at the beginning of the winter season, chose to pay the ransom, rather than attempt a solution that could have taken significant time and harmed their 180 guests. CONTINUE READING →

Published on:

 

10 January 2017

I have often mentioned how much I enjoy working with all my friends and colleagues in the hospitality industry.  I am also fortunate to work with the talented, committed group of lawyers who comprise Global Hospitality Group®.  It is with pleasure that I let you know that one of our members, Brandon Chock, has been promoted to Partner at Jeffer Mangels Butler & Mitchell LLP (JMBM).

Brandon has a keen legal mind, more than 10 years’ experience in the world of real estate, finance and hospitality, an awesome work ethic and is an all-around pleasure to work with. I love having him on my team, and our clients love him on their team, too!

Brandon has played a key role in numerous hotel transactions, including: CONTINUE READING →

Published on:

6 January 2017

ADA Hospitality Defense and Compliance Lawyer: Hotel mixed-use projects have proliferated over the past decade or two — projects that combine a hotel with retail, residential, entertainment, office and other uses. In recent years, many of these projects combine hotel and shopping center elements. We are big fans of hotel mixed-use.

Over the years, we have written about the numerous advantages that accrue to both hotels and shopping centers, when hotels are added to the right shopping or retail center.  One study showed that the right hotel can boost gross sales at shopping centers 20% – 40% — and hotels can get 30% – 40% RevPAR advantage over hotels in their competitive set.

But those of you with these hotel in mixed-use projects with shopping centers or other retail elements know that mixed-use projects inject numerous additional legal and business issues that hoteliers usually don’t deal with in stand-alone hotel projects. One such critical issue is that of “common areas.”

In the article below, my partner, Marty Orlick, writes about one aspect of common area liability that you may have overlooked in defense to ADA violations. Of course, the ultimate analysis will depend on the precise facts of the situation at hand and the structure of the hotel’s participation in the mixed-use project — particularly whether or not the hotel is owned in fee or is a tenant in the project.

How many judges does it take to rule that shopping center tenants
are not liable for ADA violations in common areas?
by
Marty Orlick

First published in the October 2015 issue of the California State Bar’s Real Property Law Section E-Bulletin

Congress passed the Americans with Disabilities Act of 1990 (“ADA”) “to provide clear, strong consistent, enforceable standards addressing discrimination against individuals with disabilities” in employment, public accommodations, transportation and federal, state and local government services. 42 U.S.C.§12101(b)(2). Title III of the ADA applies to public accommodations including shopping centers, theaters, arenas, restaurants, health clubs, hotels, banks, public space in office buildings, and nearly every manner of retail premises. Virtually every leased location which serves the general public and is engaged in commerce is subject to the accessibility requirements of the ADA. CONTINUE READING →

Published on:

31 December 2016

Yesterday, I had a delightful year-end lunch at the SoHo House with a remarkable man I have known and worked with about 25 years. I am very proud to call him my friend and include him amongst our “celebrity clients.”

When I first met this hotelier, he had recently left Four Seasons Newport Beach, and taken over the helm of the newly opened Beverly Hills Peninsula Hotel. With a hands-on intensity, he quickly turned around the financial performance at the hotel, earned the elusive 5 stars and 5 diamonds, and made the hotel the most profitable in The Peninsula Group with the highest guest return ratio in the market.

Ali Kasikci — a perfectionist’s never-ending efforts

Kasikci%203-2-09%20.jpg

Yes, I am talking the legendary Ali V. Kasikci, named Independent Hotelier of the World in 2004 by HOTELS magazine and holder of countless industry awards for excellence.

From the Peninsula Group, Ali enhanced his already keen skills for hotel development, new hotel openings, and then building the team and instilling discipline to deliver unparalleled levels of service and profitability. Thus, Ali was a key member of the team that developed and launched the Montage Beverly Hills. Under his management, the new Montage (like the Peninsula before) also earned 5 stars and 5 diamonds in record time. CONTINUE READING →

Published on:

12 December 2016

EB-5 financing for developers extended. Obama signs “Continuing Resolution”

On December 9, 2016, President Obama signed the “Continuing Resolution” passed by Congress to extend funding of the federal government until April 28, 2017, by which time it is expected that Congress will have approved a budget for the full fiscal year.

EB-5 Regional Center program also extended to April 28, 2017

As with several prior budget extensions, the Continuing Resolution included an extension of the EB-5 program’s Regional Center provisions, validating expectations of industry experts.

This means that developers who followed our advice to “get in line” with their projects last fall (when some concerns over EB-5 renewal were raised) have either raised their EB-5 capital by now or should have plenty of time to do so before the current extension signed by President Obama runs out next April.

Why NOW may be the best time for developers to start EB-5 financing

Developers who followed our advice last fall have been well served. On August 16, 2016, we published a blog article entitled “Why NOW may be the best time for developers to start EB-5 financing.” We feel the same way today.

In our earlier article, we warned that there is always some uncertainty in predicting what Congress will do. However, all people that we know who are knowledgeable about the EB-5 program and the political environment believe that EB-5 will be renewed and continued in a viable form. Some developers are uncomfortable with the uncertainty created by short-term legislative sunsets on the extensions, and on accepting predictions that Congress will continue the program we have maintained since 1992 — almost 25 years. These developers want to wait until everything has settled down and has more certainty.

We believe the “wait and see” approach is a mistake for many developers — particularly those who are ready to start construction now. Here is why: CONTINUE READING →

Published on:

12 December 2016

I was recently interviewed by GlobeSt.com to discuss Chinese investment in the United States, including why the US is an attractive market for Chinese dollars, how it helps the US economy, and what it means for the Chinese market. Some selected excerpts from our conversation are below.

The driving factors behind Chinese foreign investment in the United States:

Chinese investors will deploy a record $212.7 billion in investments outside China. This trend is driven by a number of factors: Chinese real estate and stock market bubbles are bursting; The Chinese economy is slowing down so foreign investment (as in the US) are more attractive; The yuan has been depreciating against the dollar, making US dollar-denominated investments more attractive. Many Chinese investors, ranging from very wealthy individuals to insurance companies, find themselves with significant amounts of cash that need to be deployed into large, high-yielding investments. US commercial real estate is one of the few markets and asset types that can meet these requirements (large, high-yielding).

Chinese foreign investment has been encouraged by the Chinese government for building “soft power,” which is building the image of China and expanding its influence. Finally, many Chinese investors see synergies for using their foreign investment to take advantage of the Chinese market. Chinese travelers are expected to spend more than $72 billion at home and abroad in 2016. So everything related to travel, tourism, lodging, and entertainment plays into this growing market.

CONTINUE READING →