March 28, 2012

EB-5 Lawyer with the latest wrinkle in EB-5 financing for hotels -- the Tenant Occupancy Issue

by the JMBM Global Hospitality Group®

For the most recent update on this topic, click here

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
28 March 2012

EB-5 financing is one of the few serious financing options available to hotel developers

EB-5 financing has become an important source of financing for hotel development in the past few years. And hotels have become a favored class of investment for foreign investors seeking to get their green card with the required investment of capital. Quite a few projects are being funded in this way, and some of the big hotel companies - but most notably Marriott - are encouraging their developers to look into EB-5.

The hotel lawyers at JMBM's Global Hospitality Group® have worked on (or are now working on) more than 40 such EB-5 hotel financing projects. We still seem to be at the early part of this wave, investor interest continues strong, and more people are getting on board. In addition, the construction and development financing part of hotel financing spectrum continues to be the most difficult to arrange, so EB-5 financing looks pretty attractive.

It also looks like these EB-5 deals are accomplishing their intended purpose well. They attract wealthy foreign investors, who bring fresh capital into the United States to invest it in building hotels and creating at least 10 jobs for Americans for each investor.

A new wrinkle being created by the USCIS

But a new wrinkle has recently been created by the U.S. government agency charged with monitoring the EB-5 process, the U.S. Citizenship and Immigration Services ("USCIS"). The USCIS is starting to question under what circumstances hotel jobs created by a new hotel development should be counted for purposes of EB-5 financing - - at least when the hotel operator hires the new employees under the industry-standard form of hotel management agreement. In so doing, it appears that the USCIS may be wondering if jobs with the hotel operator should be treated the same as jobs with tenants under an office or retail lease.

The article below from my colleagues, Catherine Holmes and Victor Shum, explains the latest issue and why hotel employees should be treated as employees of a hotel project, regardless of whether they are employed by the hotel owner or a hotel manager. We think this analysis will be of greatest interest to our friends in the EB-5 community who may not be familiar with the hotel industry.


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March 27, 2012

ADA Defense Lawyer: AH&LA supported legislation would give 1 year delay for pool lift requirements

by the JMBM Global Hospitality Group®

For the most recent update on this topic, click here

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
27 March 2012

Hotel Lawyer ADA defense alert

Significant legislation has been introduced with AH&LA support to provide relief for ADA compliance on pool lifts. So my ADA expert partner, Marty Orlick, and I thought it might be helpful to explain what is going on, and what it likely means to you. Here is what is happening . . .

One year delay for ADA pool lift requirement

On March 26, 2012, the AH&LA announced support for legislation introduced to force a 1 year delay in enforcing the ADA pool lift requirement. The bill was introduced by Congressman Mick Mulvaney (R-SC) and has 26 original co-sponsors.

Authorize portable pool lifts, sharing lifts and protection for hoteliers during delay

In addition to delaying effectiveness of the pool lift requirement that was originally scheduled to be effective March 15, 2012 and then delayed 90 days until May 15, 2012, the proposed legislation would give some other much-sought-after relief.

It would allow the use of portable pool lifts, and allow sharing of lifts among pools. Both of these alternatives were belatedly prohibited by the Department of Justice's January 31, 2012 interpretation of its final rules, and would be overturned by the legislation if adopted.

Significant relief for the hotel industry

According to AH&LA President/CEO Joe McInerney. "Portable lifts will allow hoteliers to protect guest safety, while accommodating guests with disabilities. The delay will allow hoteliers the time to implement the necessary changes without the fear of lawsuits."

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March 20, 2012

Hotel Lawyer: How to negotiate a Hotel Management Agreement. 10 tips for a smoother process

by the JMBM Global Hospitality Group®

For the most recent update on this topic, click here

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
20 March 2012

Hotel Lawyer: Are you thinking about negotiating a new hotel management agreement? Here are 10 things to consider about making your process smoother and more successful.

It seems like hotel management agreements are on everyone's mind these days. Development is coming back. Many owners of existing property are repositioning their hotel properties. And old management agreements continue to expire or occasionally are terminated.

In any event, we have been getting a lot of calls lately to help owners, developers, investors (and some lenders who have become owners) negotiate new hotel management agreements. One of the first questions usually raised is how the process of negotiating a management agreement works, with all the different parties involved, usually in different parts of the country (or the world).

So my partner Bob Braun and I decided to share the process we usually use with clients to streamline the process. Let us know if you have any thoughts or insights on this.

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March 16, 2012

ADA Defense Lawyer: What does the ADA pool lift compliance extension mean to you?

by the JMBM Global Hospitality Group®

For the most recent update on this topic, click here

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
16 March 2012

ADA Defense Lawyer: What does the ADA pool lift compliance extension of May 15 mean for you?

First, let's be clear that all compliance dates have NOT been extended!

Extended deadline for pool lifts is May 15

Responding to concerns expressed by the hotel, pool and spa manufacturing industries, and those of a number of U.S. Congressmen, on March 15, the White House plunged into the swimming pool access controversy by issuing a 60-day an extension to implement the 2010 ADA Standards for pool lifts. As a result of this action, the new deadline for installing pool lifts is May 21, 2012, but that too may change.

March 15 deadline remains for all other provisions of new ADA Standards

The March 15, 2012 compliance date remains in effect for all other provisions of the 2010 Standards. The Department of Justice will soon publish a Notice of Proposed Rulemaking giving the public 15 days to express their views. We expect the hotel and pool and spa industries will take a much more active role in the public comment process than they did when the 2010 Standards were initially open for comment.

Events have been moving very fast when the official government position changes 180 degrees in less than 24 hours. And that his what has happened. So my ADA expert partner, Marty Orlick, and I thought it might be helpful to explain what is going on, and what it likely means to you.

Here it is . . .

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March 15, 2012

DOJ turnabout: Pool lift compliance deadline extended to May 15

by the JMBM Global Hospitality Group®

For the most recent update on this topic, click here

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
15 March 2012

ADA Defense Lawyer with latest update on pool lift compliance date!.

Yesterday, March 14, the Department of Justice declared that it was taking a hard line on the March 15 ADA pool lift compliance date refused any extension of the compliance deadline.

Today, in a significant turnabout, Attorney General Eric Holder signed a final rule extending the compliance deadline on ADA pool lift for 60 days until May 15, 2012.

Official statement from DOJ

Here is the official statement from the Department of Justice ADA website (www.ada.gov):

On Thursday, March 15, 2012, Attorney General Eric Holder signed a final rule extending the date for compliance with sections 242 and 1009 of the 2010 Americans with Disabilities Act (ADA) Standards for Accessible Design as it relates to the provision of accessible entry and exit to existing swimming pools, wading pools, and spas for a period of 60 days after the publication of the rule in the Federal Register. On that same day, the Attorney General also signed a Notice of Proposed Rulemaking(NPRM) seeking public comment on whether a longer period of time would be appropriate to allow pool owners and operators to meet their compliance obligations. Specifically, the NPRM proposes a 180-day extension of the deadline. Comments on the NPRM will be accepted for 15 days after publication in the Federal Register.

Immediate 60-day Extension of Compliance Date for Existing Pools

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March 14, 2012

Financing new hotel development today: Finding the right "regional center" and negotiating terms for your EB-5 financing

by the JMBM Global Hospitality Group®

For the most recent update on this topic, click here

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
14 March 2012

New hotel development is back! And there is something you should know about how hotel development is being financed. It is not easy, but developers are getting new hotel developments financed. One important capital source is foreign investors using the EB-5 immigration visa investment.

We have advised clients on more than 40 EB-5 projects, and along the way we have written quite bit about EB-5 financing for hotel projects. We aren't going to repeat the ground covered earlier, but you will find references at the end of this article if you want to read our other materials on this subject.

Today's focus is on unlocking EB-5 capital for hotel development with the right "regional center" and then what you need to know about negotiating the terms of your EB-5 financing deal. Catherine Holmes and Victor Shum share their thoughts.

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March 13, 2012

5 Things to remember when buying hotel notes

by the JMBM Global Hospitality Group®

For the most recent update on this topic, click here

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
13 March 2012

Hotel investment through buying hotel notes As the economy and hotel fundamentals continue to improve, hotel note purchase opportunities will be one of the most attractive hotel investments for savvy investors.

My partner and Vice Chair of our Global Hospitality Group®, Guy Maisnik, has been working a lot on note purchases lately, and I asked him to share some insights with us, which he graciously consented to do with his article today.

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March 6, 2012

ADA defense and compliance lawyer: More clarification or confusion on March 15 ADA standards?

by the JMBM Global Hospitality Group®

For the most recent update on this topic, click here

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of www.HotelLawBlog.com
06 March 2012

As you should know by now if you are following developments on the Americans with Disabilities Act (or ADA), the most sweeping changes to the ADA in 20 years become effective on March 15, 2012.

It seems that almost every day there is some new development or interpretation of the new rules. For an up-to-date summary of some key provisions, please see articles listed at the end of this posting.

A number of us in the hotel industry have been visiting the DOJ's Civil Rights Division to get clarification on the recent DOJ guidance on "fixed" pool lifts.

Congressmen intervene with DOJ on pool lift issues

Last week, two prominent Congressmen, Mike Mulvaney and Todd Rokita, jumped into the fray with a letter to DOJ (see below) acknowledging its important efforts to provide swimming pool access to the disabled community. Here are a few highlights from the letter and the full text is below.

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