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1. The ADA Compliance and Defense Guide — free download

2. Hotel Lawyer on HMAs: “The shrinking terms of hotel management agreements”

3. Hotel Financing 2015: JMBM’s “preferred” EB-5 construction financing program for top developers and projects

4. The “new breed” of condominium hotels — Key to financing new hotel development? Selling condo hotels as “securities” under new SEC Rule 506(c) . .

5. Los Angeles is the new magnet for real estate investment

6. FAQs on “service animal” requirements of the ADA. What every hotelier needs to know. Why Uber was sued over service animals.

7. Why this may be the time to buy or sell a hotel management company

8. Hotel development & EB-5 financing: Why you don’t want to form your own regional center

9. Hotel Liability for Guest Information — What you need to know and how to avoid liability.

10. Hotel Franchise Lawyer: 8 things to negotiate in your next franchise agreement

11. Hotel Lawyer: The 5 questions every owner should ask before selecting a hotel brand

12. Hotel Franchise Lawyer: Hotel Franchise Agreements and the 5 biggest mistakes a hotel owner can make

13. Hotel Lawyer with insights on "How to get a great hotel operator"

14. The importance of Comfort Letters in financing franchised hotels

15. Hotel Lawyer: Something everyone buying or building a golf course should know . . .

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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:

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10 June 2022

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Deadline nears. More than 56,000 business and 1 million servers are affected. Of the million servers, only 33,000 are certified now.

Is your California alcoholic beverage outlet ready for
new August 1, 2022 ABC certification
of all alcoholic beverage servers and managers?

by
Jim Butler, Chairman of JMBM’s Global Hospitality Group®

 

Responsible Beverage Service Training Act of 2017 (the “RBSTA”)

A new law that many of the affected people have never heard about becomes effective July 1, 2022. It all involves liquor licenses from the California Department of Alcoholic Beverage Control (“ABC”) and persons employed by such licensees to serve alcohol to patrons.

The new law is known as the “Responsible Beverage Service Training Act of 2017” or “RBSTA.” Many are now using the acronym of “RBS” to refer to matters involving the RBSTA such as certification, training and related matters. It is embodied in the California Business & Professions Code (Div. 9, Ch. 16, Art. 4, Section 25680 et seq.).

Who is affected? How many are affected? How many comply today?

The ABC estimates that the law affects 56,000 businesses that hold on premise liquor licenses from the ABC and approximately 1 million servers of alcohol and their managers at such locations. Of the million servers and managers, only 33,000 have been certified to date!

Such licensees include all California restaurants, bars, cafes, clubs, wineries, breweries, stadiums, event centers and virtually any other outlet that sells alcoholic beverages and permits customers to drink on site. CONTINUE READING →

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06 June 2022

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GHG Partners Guy Maisnik and David Sudeck Recognized by the Los Angeles Business Journal and the Los Angeles Times

Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to announce that two senior Global Hospitality Group® members were honored last month for their legal accomplishments.

Guy Maisnik, Vice Chair of JMBM’s Global Hospitality Group®, has been included in the Los Angeles Business Journal’s list of “Top 100 Lawyers.” This list honors the top lawyers in Los Angeles for their legal achievements, professional impact and community involvement.

Guy advises clients on hospitality transactions, representing buyers, sellers, lenders, opportunity funds, special servicers, REITs, and developers in hotel transactions, joint ventures, hotel management agreements and franchise agreements, buying, selling and ground leasing of hotels, complex mixed-used development, and fractional and timeshare structuring.

David Sudeck, senior member of JMBM’s Real Estate department, has been recognized as a 2022 “Commercial Real Estate Visionary: Professional Service Advisor” by the Los Angeles Times. This list spotlights the top commercial real estate professionals in the region who have helped businesses reach the next level of growth.

David is a seasoned deal maker with an international reputation as an expert in hospitality projects. He provides critical business and legal advice to owners and lenders in the purchase, sale, development, construction, financing, leasing, and sale-leaseback of hotel, resort and mixed-use properties, including structuring complex hotel management and branding agreements.

These awards are a result of their excellent legal work and dedication to client service. To read Guy Maisnik’s profile in the Los Angeles Business Journal click here and to read David Sudeck’s profile in the Los Angeles Times click here. CONTINUE READING →

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2 May 2022

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Click here for the latest articles on ADA Compliance and Defense.

The Department of Justice recently released a set of guidelines reconfirming that the Americans with Disabilities Act applies to website accessibility. In order to avoid legal action, it is crucial for hotel owners to understand what they can do to ensure compliance with ADA regulations.

Stuart Tubis of JMBM’s ADA Compliance & Defense Group outlines the new guidance below.

DOJ Issues Guidance On Website Accessibility

by
Stuart Tubis, JMBM’s ADA Compliance & Defense Group

Recently on March 18, 2022, the U.S. Department of Justice (DOJ) issued a “Web Accessibility Guidance” statement for state and local governments and public accommodations (including businesses) under Titles II and III of the Americans with Disabilities Act (ADA).

A copy of the Guidance document can be found here.

In the Guidance, the DOJ clarifies once again that the ADA applies to websites: “the Department’s longstanding interpretation of the general nondiscrimination and effective communication provisions applies to web accessibility.”

The Guidance also provides some examples of website accessibility barriers, including poor color contrast, lack of text alternatives for images, lack of labels for forms, and mouse-only navigation design. CONTINUE READING →

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29 April 2022

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on EB-5 Financing and here for alternative C-PACE Financing.

JMBM’s Global Hospitality Group® and EB-5 Finance Group™ are pleased to publish an updated edition of The Developer’s EB-5 Handbook for Construction Financing. This new and improved handbook provides essential resources for developers considering EB-5 financing for their next project.

The recent EB-5 Reform and Integrity Act of 2022 and the reauthorization of the Regional Center Program, a crucial part of EB-5’s success, has generated renewed interest in the program’s low-cost funding opportunities. The Global Hospitality Group® has developed an approach to guide clients through the current EB-5 process with a minimal amount of financial risk and execute financing with a high degree of confidence.

The Developer’s EB-5 Handbook for Construction Financing helps developers assess potential opportunities for EB-5 financing while avoiding potential traps for the unwary.

The Handbook includes articles addressing the following topics:

  • What EB-5 is all about? What are its essentials?
  • What’s different about EB-5 this time around?
  • Is EB-5 still viable for developers now that it’s been reauthorized?
  • What is the optimum EB-5 construction financing structure for development projects?
  • How much? How cheap? How certain? How long?
  • What are the most common mistakes developers make with EB-5 financing?
  • Who do I need on my EB-5 financing team?

To download a free copy of The Developer’s EB-5 Handbook, click here.

If you would like to discuss any of the issues presented in the Handbook, please contact us. CONTINUE READING →

Published on:

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25 April 2022

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Click here for the latest articles on EB-5 Financing.

Part two of our recent article in Westlaw Today explores the opportunities available to developers and investors now that the EB-5 program is back on track. For part 1, click here.

This article was originally published on Westlaw Today on April 14, 2022.

 

What the 2022 Revitalization of EB-5 Financing Means
for Real Estate Developers and Other Entrepreneurs: Part 2

What are foreign investors looking for?

Experts expect to see a flood of interest in the EB-5 program, both from foreign investors anxious to immigrate to the US, and from real estate developers with shovel-ready projects seeking capital.

There is no limitation in the law as to the type of project that can be funded with EB-5 financing. The critical requirement is that the minimum number of 10 new US jobs for each investor will be created within a specified period of time.

In the past, up to 70 or 80 percent of all EB-5 investors selected real estate-related investments, particularly those that create a large number of new US jobs such as hotels, restaurants, night clubs, resorts, hospitals, and senior living. Alternate energy projects and a host of other new businesses, however, could tap this financing source as the program comes back online.

Under the new law, it appears that retail and office projects may also be feasible, because new jobs created by tenants of a project appear to satisfy the job creation requirement. Previously, the law excluded jobs created through “tenant occupancy.” CONTINUE READING →

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18 April 2022

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Click here for the latest articles on EB-5 Financing.

Since the renewal of the EB-5 program this year, there has been a lot of talk about what this means for developers interested in taking on new projects. Our recent article in Westlaw Today sums up the latest information about the program. Part one is below; part two will be published next week.

This article was originally published on Westlaw Today on April 14, 2022.

 

What the 2022 Revitalization of EB-5 Financing Means
for Real Estate Developers and Other Entrepreneurs: Part 1

After being sidelined for the last few years by circumstances culminating with the pandemic and the lapse of the Regional Center Program in June of 2021, the EB-5 foreign investment program looks like it has returned as a viable option for developers seeking low-cost funding for new construction projects.

On March 15, President Biden signed the Omnibus Spending Bill, which included the “EB-5 Reform and Integrity Act of 2022,” sponsored by Senators Pat Leahy (D-VT) and Chuck Grassley (R-IA). This bipartisan bill restores viability to EB-5 by reauthorizing the lapsed Regional Center Program, a component essential to the success of EB-5.

What is EB-5?

EB-5 refers to a program that is authorized by Section 203(b)(5) of the Immigration and Nationality Act. EB-5 is the fifth “Employment-Based” immigration program set forth in Section 203 and provides expedited visa processing for foreign investors making a minimum required investment in a project that directly creates at least 10 new jobs in the United States.

In short, it is both an immigration program for foreign investor immigrants, and a program that requires substantial capital investment in new business enterprises creating jobs in the United States.

The character of available financing and the projects most desirable for EB-5 investment are directly influenced by program requirements that must be met to qualify investors for a green card. For example, lower program investment minimums ($800,000 vs. $1,050,000) make projects more desirable in targeted areas of high unemployment and rural areas. CONTINUE READING →

Published on:

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31 March 2022
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Click here for the latest articles on EB-5 Financing, and here for C-PACE Financing.

The hotel development and financing world is buzzing with the news that the EB-5 program has been renewed, creating new opportunities for upcoming projects. My partner David Sudeck and I have written the short update below to help get you up to speed.

 

EB-5 Reform and Integrity Act of 2022
EB-5 is revitalized and renewed

by Jim Butler & David Sudeck

In case you haven’t heard, EB-5 is back! On March 15, President Biden signed the Omnibus Spending Bill, which included the “EB-5 Reform and Integrity Act of 2022,” sponsored by Senators Pat Leahy (D-VT) and Chuck Grassley (R-IA). This bipartisan bill restores viability to EB-5 by reauthorizing the lapsed Regional Center Program, a component essential to the success of EB-5.

What’s different about EB-5 this time around?

While the basics of the program remain the same–foreign investors provide a specified amount of capital to development projects that create American jobs, and are put on a fast track to green cards for themselves and their families–some aspects of the Regional Center Program have changed. The Regional Center Program, which was authorized until June 2021, allows investors to pool their resources to finance new projects and enterprises. Regional centers also have different requirements for the types of jobs created by a development project.

The new bill raises the minimum investment in qualified projects to $1,050,000, except in Targeted Employment Areas (TEAs) where the investment minimum will be $800,000. TEAs are areas that the program prioritizes for job creation, usually rural or areas with high unemployment–where the investment minimum remains $800,000. The new minimum investment requirement will hold for the next five years, and then will be subject to reevaluation. The bill also puts a premium on investment in rural areas by expediting visa applications for investors involved in those projects; ten percent of EB-5 visas are set aside for these investors. Infrastructure projects are also subject to lower minimum investment requirements, but do not qualify for expedited visa processing. CONTINUE READING →

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29 March 2022

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on ADA Compliance and Defense.

Many hotels have opted to include Electric Vehicle Charging Stations as an amenity for guests as the cars become more and more common. And while hotels may be very aware how the Americans with Disabilities Act applies to their property, are they considering the requirements for disabled guests at these charging stations?

My partner Martin Orlick, Chair of JMBM’s ADA Compliance & Defense Group, describes some of the issues that hotels and operators of electric vehicle charging stations should be aware of to maintain compliance with the ADA.

How Will ADA Guidelines Impact Public
Electric Vehicle Charging Stations?

by
Martin Orlick, Chair, JMBM’s ADA Compliance & Defense Group

You’re about to see a lot more Electric Vehicle Charging Stations (EVCS) on your daily drive. Within months of taking office, the Biden Administration announced an initiative to build half a million new charging stations across the country. The Infrastructure Investment and Jobs act, which passed in November 2021, includes $7.5 billion towards this goal; the Administration’s signature domestic policy bill, the Build Back Better act, also includes funding to promote electric vehicles and expand the public charging network. California’s governor is promoting an ambitious plan of 500,000 electric vehicles on the state’s road in five years.

This is exciting news for the owners, operators and designers of EVCSs, and a welcome boost for a rapidly growing industry. What many companies are not considering, however, are the needs of the disabled drivers who will need to be able to access their electric vehicle charging stations.

CONTINUE READING →

Published on:

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8 March 2022

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Click here for the latest articles on Data Technology, Privacy & Security.

The rules around data privacy and cybersecurity are constantly evolving. In order to protect themselves from liability, hotel owners should pay attention to ongoing legal developments and learn more about their own data infrastructure.

Bob Braun, senior member of JMBM’s Global Hospitality Group® and Co-Chair of the Firm’s Cybersecurity & Privacy Group, explains why hotels need to understand exactly what data they hold, where it is stored and who has access to it.

Facing the Knowledge Gap: Why Hotels Need “Visibility” to
Avoid Data Privacy Liability

by Bob Braun, Hotel Lawyer

Addressing privacy compliance and cybersecurity is becoming more and more challenging for companies. At least 26 states are considering various kinds of data privacy laws. At the same time the rate, depth, and impact of ransomware, wiperware and data breaches has become more intense and more expensive, and there is no indication that the trend will end soon.  Hotel companies, as holders of significant amounts of personal information and highly dependent on computer networks for daily operations, are particularly at risk in this environment.

A hotel company that seeks to comply with privacy mandates, and to prepare for and defend against a data breach, requires knowledge – it requires visibility.

What does that mean? To achieve visibility, a hotel brand, manager or owner needs to increase its knowledge of key elements of its data infrastructure:

See Your Network

Most hotel executives, other than chief technology officers and chief financial officers, have little knowledge of their network. But understanding what data is stored on the network, how the various parts of the network interact, and who has access to the network (and what kind) is essential to evaluating risks, complying with privacy laws, and preparing and defending against attacks. This means not only knowing what is supposed to be on the network, but the “silent” nodes as well – things like unused servers and the devices that attach to the network, such as personal laptops, smart phones and tablets.  As hotels become increasingly automated – by relying on smartphones to substitute for keys and allowing touchless registration – being able to see the full scope of the network is challenging but essential. CONTINUE READING →

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22 February 2022
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If you are planning to make a large gift as part of your estate plan, you should consider taking advantage of the current tax exemption in effect until the end of 2025. After this time, the exemption will revert back to approximately one-half of its current value. This has potentially huge implications for hospitality executives and other high-net-worth individuals. Gordon Schaller, managing partner of JMBM’s Orange County office, explains below.

The Cost of Waiting to Make a Large Gift: Compounding Your Tax Savings

by Gordon Schaller

The Tax Cut and Jobs Act of 2017 doubled the lifetime gift and estate tax exemption, effective for gifts made from 2018 through the end of 2025. In 2026, the exemption will revert to the 2017 exemption, adjusted for inflation (approximately one-half of the 2025 exemption). There was great concern during the last part of 2020 and most of 2021 about the possible reduction of the lifetime gift and estate tax exemption prior to the scheduled reversion. However, Congress did not enact any change to the exemption, and it seems unlikely to do so for the foreseeable future. The current exemption is $12,060,000 per person, or $24,120,000 per married couple.

What should clients do now? For those who can afford to do so, they should utilize the exemption now. The cost of waiting, or the benefit of acting now, can be illustrated by the following table. The first example demonstrates the effect of a $12 million gift now, compounded at 6% over many years, compared to a $6 million gift when the exemption reverts in 2026, compounded over the remaining years. By 2050, the difference is $37 million in the first example. The second example shows an even greater disparity in outcomes ($57 million) when the assets gifted consist of an interest in a partnership, LLC, corporation or real estate that qualifies for valuation discounts for lack of control and lack of marketability. CONTINUE READING →

Contact Information
Jim Butler, Chairman
Global Hospitality Group®
Jeffer Mangels Butler & Mitchell LLP
(310) 201-3526 • jbutler@jmbm.com
www.HotelLawyer.com

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