Hotel Law Blog

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
30 September 2006

One of the top priorities of the Unite Here over the past two years has been obtaining neutrality agreements (also sometimes called card-check agreements or peace agreements). See yesterday's posting and many of the newspaper articles referenced below). So what do you do when the union is at your door -- whether you are a union hotel (not covered by a Multi-Employer Group contract), a non-union hotel, or a developer waiting to break ground?

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Posted In: Labor & Employment

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
29 September 2006

This has been a busy year for the hotel unions such as UNITE HERE. The union's latest action yesterday in closing down the main corridor to LA's International Airport with sit-ins in the middle of Century Boulevard garnered significant media attention. More than 300 were arrested in a demonstration "choreographed" with city officials and police. The protest was part of the union's effort to organize 13 non-union hotels ostensibly to publicize the treatment of immigrants by the non-union airport hotels.

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Posted In: Labor & Employment

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
27 September 2006

UNITE HERE hotel union officials announced that they are scheduling a protest for tomorrow afternoon (September 28) at 4:30 pm during rush hour traffic with the intent to close down Century Boulevard--one of the main corridors to and from LAX.

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Posted In: Labor & Employment

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
26 September 2006

Yesterday, we noted how Shaquille O'Neal is jumping into a $1 billion joint venture on a hotel-enhanced mixed-use project in Miami. Now it looks like Andre Agassi is looking for a new kind of grand slam.

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Posted In: Condo Hotels , Hotel Mixed-Use , Lifestyle Hotels

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
25 September 2006

Last week at The Lodging Conference in Phoenix, hotel-enhanced mixed-use was one of the hot topics which everyone was talking about. A recent example of this trend was reported in the September 19 news that Miami Heat basketball star and NBA champion Shaquille O'Neal is getting involved in a high-profile mixed-use project. He has formed The O'Neal Group, a real estate firm that plans big real estate projects across the country. Its first venture is with MDM Development in a $1 billion mixed-use project in downtown Miami. The so-called Met Miami will include an office tower, 1,100 residential units, a supermarket, a 24-hour fitness center and a high end Marriott hotel. O'Neal, who has amassed a real estate portfolio worth $50 million over recent years, will be involved in the sales and marketing arm of the development operation.

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Posted In: Condo Hotels , Hotel Mixed-Use , Lifestyle Hotels

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
23 September 2006

At a little after 7 p.m. on Saturday, September 22, 2006, CBS reported that Local 2 of UNITE HERE announced that the rank-and-file had approved the tentative contract negotiated with the 13 Multi-Employer Group (MEG) hotels. The union said that 99% of the workers voting approved the contract.

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Posted In: Labor & Employment

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
22 September 2006

As a record 1,200 delegates gathered at The Lodging Conference held at the Arizona Biltmore in Phoenix this week, the mood might be best described as "ebullient foreboding." According to Jones Lang LaSalle, we are seeing an unprecedented level of hotel transactions--more than $21 billion in the first six months of 2006 and more than all twelve months of 2005. And Smith Travel Research told us how well-positioned the industry is for sustained profitability and growth with continuing record RevPAR growth increases, demand growth still outpacing supply, and big barriers to entry.

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Posted In: Outlook and Trends

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
22 September 2006

We have been called in after-the-fact many times by developers who have been given unworkable condo documents drafted by expert condo lawyers. The problem is that they were experts in condos, but had scant experience with hotels, and no experience with condo hotels. Unfortunately, the best way to fix bad documents at the outset is to throw them away and begin again from scratch. Condo hotel deals are far too complex to try and bandage bad documents. But once they are in place, you may have to live with them for a long time, even if they are terrible.

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Posted In: Condo Hotels , Hotel Mixed-Use

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
20 September 2006

Maintaining the quality of the condo hotel is a key component to the success of a condo hotel project. The condo hotel must deliver the expected consistent quality levels of service, room finishings and other physical product for its brand or market segment. Face it: the fastest way to turn a four-star property into a three-star property is to have inconsistent standards.

The condo hotel regime must provide the legally enforceable structure to maintain consistency and quality, and the mechanics to enable the unit owners, through their HOAs, to meet their obligations under the hotel management agreement, and to enforce their rights.

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Posted In: Condo Hotels

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
19 September 2006

As a record 1,200 hotel industry members meet at The Lodging Conference at the Arizona Biltmore in Phoenix, Starwood Hotels & Resorts Worldwide held a special reception to announce the long-anticipated new name for its Westin extended stay product.

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Posted In: Outlook and Trends

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
18 September 2006

The Securities and Exchange Commission (SEC) may view the condo offering as a "security," if any one of the following exists: 1) The condo is sold to the buyer with an emphasis on economic (or tax) benefits; 2) the condo is put into a "rental pool," where income and expenses are pooled and each condo owner gets an allocated share; 3) the unit owner has substantial restrictions on use, occupancy or selection of a rental agent of the owner's choosing, or 4) the condo was offered with certain "ancillary services" such as a rental program. Because a successful condo hotel must have an adequate and predictable inventory of rooms to rent out to hotel guests, it is easy to see how these factors could present challenges.

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Posted In: Condo Hotels

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
17 September 2006

In past few blog commentaries, I have described the labor settlements in San Francisco and Monterey, and begun to look at what they portend. Last time, my partner, Marta Fernandez, helped us understand that although the union would like us to think that the deals cut with Multi-Employer Groups (or MEGs) in various cities set the standard for everyone else, that is not true. Nothing mandates that hotels adopt a "me too" agreement as the union proposes.

Today, we will look at one important area where it may pay for other hotels (i.e. non-MEG hotels) to avoid the "model" negotiated by the MEGs.

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Posted In: Labor & Employment

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
16 September 2006

For this comment, I talked with my partner, Marta Fernandez . She is one of the senior members of our Global Hospitality Group® who specializes in labor and employment issues related to hospitality. Her background and contact information are provided below.

As the strike threats resolve in New York, Chicago and now San Francisco and Monterey, one has to ask, "What does it all mean?" What is the significance, for example, of the deal Local 2 of UNITE HERE cut with the 13 San Francisco hotels making up the SFMEG (San Francisco Multi-Employer Group).

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Posted In: Labor & Employment

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
15 September 2006

On September 15, 2006, Unite Here Local 483 reached a tentative agreement with Hyatt covering 485 workers at the Hyatt Regency Monterey and Park Hyatt at Carmel Highlands Inn according to Marie Vasari, writer for the Monterey County Herald. The proposed four year contract is expected to be ratified by rank and union members next Tuesday, September 19.

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Posted In: Labor & Employment

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
15 September 2006

Adequate and predictable room inventory is critical to the success of a condo hotel project. Without adequate hotel rooms to accommodate the normal flow of guests, the project simply won't work as a hotel. Large groups and conferences tend to reserve up to 24 months in advance, so the hotel has to have predictable inventory.

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Posted In: Condo Hotels , Hotel Mixed-Use

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
14 September 2006

After two years of strikes, lockouts, boycotts and tense negotiation, the 13 hotels that make up the San Francisco Multi-Employee Group reached a tentative labor agreement this week with Local 2 of the Unite Here union. Rank and file members of Unite Here will vote on the pact Sept. 22, and it is likely to pass. While the union touts a victory, the agreement is very close to the proposals originally made by the union two years ago. Yes, the SFMEG hotels stood up to the union throughout this time, but the negotiation process was clearly costly to all.

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Posted In: Labor & Employment

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
13 September 2006

Each condo hotel program has specific needs and considerations -- there is no "one size fits all" situation. The design and allocations have to be designed for each project particularly as they become larger and more complex.

We quickly found out that the early revenue splitting formulas (e.g. 60% to the hotel and 40% to the unit owner) were really clumsy efforts to cover expenses that couldn't really be allocated to either the hotel or the unit owner. Where hotel guests and unit owners both use the service, which should pay for its maintenance and benefit from its revenue?

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Posted In: Condo Hotels , Hotel Mixed-Use

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
11 September 2006

Hotels and other targets of ADA lawsuits have found a friend in the U.S. Constitution: Article III.

Many thousands of ADA lawsuits have been filed in federal District Courts in the past few years. A large percentage of the plaintiffs filing these lawsuits are represented by a handful of plaintiffs' organizations that specialize in ADA lawsuits. Because plaintiffs can recover attorneys' fees and litigation costs and -- in California and several other states -- damages, in addition to injunctive relief, plaintiffs' organizations have become a cottage industry.

However, some federal courts have recently determined they have no authority to award attorney's fees, because the plaintiffs failed to establish "Article III standing".

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Posted In: ADA Defense and Compliance

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
8 September 2006

Along with the other hotel lawyers in the Global Hospitality Group® at JMBM, I have been involved in structuring more than 85 condo hotel projects over the past few years. When developers come to us with a condo hotel project -- whether it is a new development or a conversion -- we look at five key factors to assess the viability of the project.

These factors are: 1) economic fundamentals, 2) the condo hotel program's design, 3) a condo hotel regime that will ensure adequate hotel room inventory, 4) structure and documentation to assure appropriate and consistent quality, and 5) not locking down the structure until you have a viable regime design. And although I don't include it in these fundamentals, you have to worry about SEC compliance for a deal marketed or sold to US buyers (See "Why does the SEC care about condo hotels?"). Today, I want to focus on the all-important economic fundamentals.

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Posted In: Condo Hotels , Hotel Mixed-Use

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
7 September 2006

I've been reading some press items lately that suggest the condo hotel phenomenon is coming to an end. The stories point to a few specific markets, like South Florida and Las Vegas, that are saturated with capital and deals, or to specific projects that have gone awry.

Are condo hotels dead? No, they are alive and well. Will the super-heated boom continue? No. Consumer demand will normalize and be cyclical, but quality projects will continue to be successful, particularly in markets that have not been flooded with product.

In any event, we believe that condo hotels continue to perform a valuable role and have earned an enduring legacy in the hospitality industry. They make new hotel development feasible where limited financing and skyrocketing constructions costs would otherwise be prohibitive. And perhaps more importantly--at least over the long-term--condo hotels have changed the way we view hotels being mixed with residential other kinds of real estate projects.

From direct experience with more than 80 hotel mixed-use projects over the past five years, all of which involved a condo hotel or residential component, often with other commercial real estate uses as well, we have participated in a intense effort that has produced some break-through solutions to obstacles that held back many earlier mixed-use projects. This effort has created a new technology and a deep pool of practical experience that already paying huge dividends. This technology and experience is critical to the success of hotel mixed-use as it takes an ever more-prominent role in commercial real estate.

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Posted In: Condo Hotels , Hotel Mixed-Use

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
5 September 2006

As most hotel owners and operators know, the Americans With Disabilities Act (ADA) prohibits discrimination on the basis of disability by "public accommodations," including places of lodging. This requires facilities to be designed, constructed, and altered - where "readily achievable"-- in compliance with the accessibility standards as set forth in the Americans With Disabilities Act Accessibility Guidelines (ADAAG).

The ADAAG standards - last revised in 1994 - are being amended by the Access Board, Department of Transportation and the Department of Justice (DOJ). It is expected that the proposed ADAAG amendments will be adopted substantially as drafted.

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Posted In: ADA Defense and Compliance

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
2 September 2006

What should you do after a disaster hits? First, call your attorney.

Robert Mangels, one of JMBM's mass disaster and insurance claim experts, says "We can make the biggest contribution to maximize recovery when we are brought into a situation as early as possible. We like to be at 'ground zero' within 24 hours, leading your disaster team to find and preserve critical evidence and offer the protection of the attorney-client privilege for vital and sensitive information gathered by your expert disaster team."

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Posted In: Disasters

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
1 September 2006

The current hurricane season serves a strong reminder to be prepared for the next disaster. We never know when there might be an earthquake, tornado, fire, flood or riot, but here are a few tips that can make a big difference, especially when taken before the disaster strikes:

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Posted In: Disasters