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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:

13 June 2019

This year at Meet the Money® 2019, we asked attendees what they they see on the horizon for the hotel industry in 2019 and 2020 where are we in the cycle? What trends are emerging? What are the market’s strengths and weaknesses?

We’ve compiled some of the interesting answers we received in the video, below. Watch it and hear what opportunities and challenges industry executives see ahead.

CONTINUE READING →

Published on:

02 June 2019

Important data on Boutique, Lifestyle, and Soft Brands

Each year since 2016, The Highland Group has published the Boutique Hotel Report, an annual compilation of data describing the boutique hotel segment. Kim Bardoul, a partner with the group, specializes in boutique hotels and produces the report each year.

A resource for developers, consultants, appraisers, operators, lenders and brands, the report defines lifestyle, soft brand collections and independent boutique hotels; details room distribution; describes current market share and recent trends; and compares boutiques with traditional hotel types for RevPAR, F&B revenue, Trev PAR and EBITDA.

With boutique hotels one of the fastest-growing segments in the U.S. hospitality industry, and $20 billion in revenue in 2018, The Highland Group’s report is a valuable tool for anyone interested in how they might take advantage of their strong performance. Following are a couple of charts I found interesting, and that illustrate the data available in the full report.

Lifestyle and Soft Brand Collection supply increased dramatically from 2000 to 2018 – Lifestyle boutique rooms increased by 13% from 2017 to 2018, and Soft Brand Collection rooms increased by 32%. The charts below, provided in the report, illustrate this trend. CONTINUE READING →

Published on:

29 May 2019

JMBM’s ADA Compliance and Defense Group has defended more than 750 ADA lawsuits and DOJ investigations or actions brought against owners and operators of hotels and other businesses classified as “public accommodations” under the Americans with Disabilities Act (ADA). A federal Grand Jury has indicted a prolific ADA plaintiff for income tax evasion. More than just an interesting story, Marty Orlick explains how this might affect current and future ADA litigation.

 

Serial Plaintiff Who Filed Nearly 3,000 Americans with Disabilities Act (‘ADA’) Lawsuits is Indicted by a Federal Grand Jury and Faces Possible Imprisonment and Fines for Income Tax Evasion
by
Martin H. Orlick, Hotel Lawyer  & Chair,
JMBM’s ADA Compliance & Defense Group

In an ironic twist of fate, Scott N. Johnson, Esq., a disabled Sacramento attorney, who has filed nearly 3,000 ADA lawsuits as plaintiff, starting in the United States District Court for the Eastern District of California, now faces possible jail time for felony income tax fraud according to a Federal Grand Jury Indictment.

On May 23, 2019, United States Attorneys filed a Grand Jury Indictment, United States of America v. Scott Norris Johnson, accusing Johnson of three counts of “Making and Subscribing a False Tax Return” by failing to declare substantial income derived from ADA settlements on his U.S. Individual Income Tax Returns and his U.S. Corporation Income Tax Returns for the tax years 2012-2014.

According to the Indictment, from no later than “on or about January 28, 2008, SCOTT NORRIS JOHNSON owned and operated Disabled Access Prevents Injury, Inc. (“DAPI”), a corporation registered in the State of California. DAPI was treated as a C corporation for tax purposes.” The Indictment alleges that Johnson was DAPI’s sole shareholder and that DAPI “provided legal services associated with lawsuits that it filed on behalf of SCOTT NORRIS JOHNSON as the plaintiff.” CONTINUE READING →

Published on:

28 May 2019

It’s hard to believe that another Meet the Money® is in the rear view mirror, and that we have our 30th year on the horizon in 2020! This year’s conference was another few days of energetic deal-making, networking and discussions about the current state of the industry.

Our focus at Meet the Money has always been financing and deals – connecting providers and consumers for profitable partnerships. It’s one of our goals as hotel lawyers, too; find out more about how the Global Hospitality Group® can help you.

Hotel Business has posted a video sharing some of my thoughts on hotel financing in the current market. I think this is a good time in the industry, with the potential for good deals and smooth sailing for the next couple of years. Watch the video below for the rest of my comments, and a quick look at this year’s conference.

CONTINUE READING →

Published on:

21 May 2019

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 has defended more than 750 ADA lawsuits and DOJ investigations or actions brought against owners and operators of “public accommodations.” Such properties include hotels, resorts, restaurants, timeshares, bed and breakfasts, spas, sports facilities, wineries, theaters and other commercial real estate, such as apartment communities, shopping centers, retail stores and banks.

Today, Marty shares some good news from Riverside, California, where the Riverside County District Attorney’s Office is seeking to stop abusive ADA lawsuits filed by serial litigants.

 

Riverside County DA drops the hammer on ADA litigant and counsel
to stop abusive litigation
by
Martin H. Orlick, Hotel Lawyer  & Chair,
JMBM’s ADA Compliance & Defense Group

In an extraordinary case charging ADA litigation abuse, the Riverside County District Attorney’s Office filed an action on behalf of the People of California seeking to permanently prevent serial ADA plaintiff James Rutherford and two law firms that regularly represent him (Manning Law and the Law Offices of Babak Hashemi, and individual members of the firms) from filing abusive lawsuits. The Complaint alleges that the defendants violated various Business & Professions Code sections designed to protect the public against “unlawful, unfair or fraudulent acts or practices” and seeks civil penalties not to exceed $2,500 for each violation and other equitable relief. Civil penalties in this case could exceed $800,000 if the allegations prove true.

The Complaint alleges that “Defendants filed 323 lawsuits based on alleged violations of the Americans with Disabilities Act” in federal and state courts. Many of these lawsuits were filed against hotels and retailers. According to court papers, the pleadings filed by the defendants follow a pattern of near-identical “allegations, except for the identity of the named defendants and the date of the alleged harm.”

This lawsuit is eerily similar to a lawsuit filed by the Arizona Attorney General against Peter Strojnik, Sr., who filed nearly 2,000 identical ADA lawsuits against Phoenix/Scottsdale businesses. Suspended from practicing law, Mr. Strojnik surrendered his license to avoid disbarment. Another lawyer in New Mexico also surrendered her license in lieu of disbarment over ADA litigation abuse. CONTINUE READING →

Published on:

10 May 2019

LOS ANGELES—Jim Butler, Chairman of JMBM’s Global Hospitality Group®, along with Jack Westergom of Manhattan Hospitality Advisors, will speak at the 4th Annual West Institutional Real Estate Investor Forum on June 5, 2019 in San Francisco on the topic of hotel investment. They will also conduct a roundtable discussion for investors who may be new to the hotel investment.

“Many institutional investors, family offices and other sophisticated real estate investors are looking to hotels to increase investment returns. While hotel investments can offer significantly higher cap rates and greater long-term profits, many investors realize they need experienced advisors to avoid pitfalls that might otherwise confront them,” said Butler. “This program will provide an introduction and guide to hotel investments for those looking into how this asset class fits into an investor’s portfolio.”

The morning presentation is entitled, “Time for a second look at Hotels: The hidden gem of asset classes.” It will cover the following:

  • Fundamentals of hotel investment
  • 3 reasons investors buy or build hotels
  • What makes hotels different
  • How much of a hotel’s value is due to the operating business
  • Which hotel agreements have the most impact on value. How much impact?
  • Who are the critical members of your hotel team
  • Case studies for hotel investment – greater upside if done well, greater downside if done badly
  • Why you should let experience be your guide CONTINUE READING →
Published on:

07 May 2019

Greetings from Los Angeles and the beautiful Hyatt Regency LAX!

Today, we kicked off Meet the Money® 2019 – the National Hotel Finance & Investment Conference hosted by JMBM’s Global Hospitality Group® – with the LIIC Top Ten. Presented by my friend, Mike Cahill, CEO and Founder of HREC and one of LIIC’s co-chairmen, the LIIC Top Ten reflects the perspectives of the industry’s most active members in the hospitality market.

— Jim

About the LIIC Top Ten

For the past 15 years, the members of the hotel industry’s preeminent think tank, “LIIC – The Lodging Industry Investment Council,” are annually surveyed to develop a list of the major hotel investment opportunities and challenges for the coming year. This exhaustive survey results in the LIIC Top Ten, a highly regarded profile of investment sentiment and attitudes for the lodging industry for the forthcoming 12 months. Altogether, the members of LIIC represent direct acquisition and disposition control of well over $60 billion of lodging real estate.

Members are currently extremely active and have the pulse of the market, with 64% of LIIC hotel investors having successfully sold a hotel in the last 12 months and 50% purchased a lodging asset. In defiance of any late cycle concerns, 93% are looking to buy more hotels over the next 24 months.

The hospitality industry’s most influential investors, lenders, corporate real estate executives, REIT’s, public hotel companies, brokers and significant lodging equity sources are represented on the Council. LIIC serves as the leading industry think tank for the lodging real estate business (www.liic.org).

2019 LIIC Top Ten Survey Results: CONTINUE READING →

Published on:

24 April 2019

LOS ANGELES—JMBM’s Global Hospitality Group® will host Meet the Money® national hotel finance and investment conference May 6-8 at the Hyatt Regency LAX in Los Angeles.  Now in its 29th year, this annual event will bring together hotel owners, operators, developers, consultants, investors, brands, lenders and other capital providers to discuss current developments in the industry as well as strategies for the future.

“Our line-up of more than 70 speakers include top hospitality leaders who will share their expertise and deliver essential information for maximizing potential opportunities,” said Jim Butler, Chairman of JMBM’s Global Hospitality Group®. “Attendees will also have the opportunity to meet some of the most active capital providers in the market for both existing and new hotel construction,” he said.

Free to all who register is a special pre-conference session on Monday afternoon May 6th – Meet The Equity: Investment Bootcamp – Preparing and Executing the Capital Raise. This interactive workshop will be led by Jonathan Falik of JF Capital Advisors, Guy Maisnik, Vice Chair of JMBM’s Global Hospitality Group®, and private equity experts who will explain how they evaluate requests for capital, what makes certain deals attractive to them, and why they reject projects.

Some of this year’s panel discussions and special presentations, include:

  • Views from the Executive Suite: What’s Important Now?
  • Creative Financing: Mezz and Beyond
  • Is Select Service Still Everyone’s Favorite? Where Does it Go from Here?
  • Developing, Redeveloping and Repositioning to Optimize Value
  • Winning Strategies for Buying and Selling Hotels
  • Construction Financing Today

“Our speakers are passionate about the hospitality industry and we look forward to the enthusiastic exchange of ideas that happens every year at Meet the Money,” said Butler. “We look forward to seeing our long-time industry friends and making new ones.”

Registration can be made through the Meet the Money® website. CONTINUE READING →

Published on:

19 April 2019

The Spring 2019 Trigild Lender Conference in Dallas, TX wrapped up on Thursday, April 18—an informative day-and-a-half conference delving into what the industry is saying about lending and debt for commercial real estate.

The Trigild Conference

Keynote speakers Peter Muoio, Ph.D. and Ten-X executive vice president Donald D. Sheets shared their perspective on commercial real estate, construction project risks, ethics questions, hospitality trends, economic forecasts, and whether a downturn is imminent.

Other programs at this exciting conference discussed the impact of natural disasters on the commercial real estate industry, block-chain and other emerging trends, and strategies to help lenders, investors and developers mitigate risk. Trigild brings together lenders, special servicers, legal counsel, investors, real estate fund leaders, asset managers, and loan buyers to network and learn from one another. Specializing in property management, receivership, bankruptcy, and advisory services, Trigild has hosted the Lender Conference for 7 years.

Lenders seeing distressed hotel loans?

Speakers at the conference noted a few troubled spots in lending, but they seem to be isolated to the oil patch or situations that are specialized and limited. Overall it seems that some experts project a continuation of modestly good times through 2020 or 2021, while a few doomsayers claim we are ready to fall off a cliff any minute. CONTINUE READING →

Published on:

21 February 2019

Voters in Long Beach, California passed an initiative in November 2018 that affects all hotels in Long Beach with more than 50 hotel rooms. The Hotel Workplace Requirements and Restrictions Initiative Ordinance, known as the “Panic Button Initiative” places new requirements and restrictions on hotel owners and puts non-union hotels at a disadvantage.

Marta Fernandez, Hotel Lawyer and a partner in JMBM’s Labor & Employment department, discusses “Panic Buttons” and the new ordinance below and describes what Long Beach hotels should do to prepare for compliance and potential union organizing.

What hotel owners need to know about unions and
the “Panic Button” ordinance in Long Beach, CA
by
Marta M. Fernandez, Hotel Lawyer and Labor & Employment Partner

Passed by voters last November, the “Panic Button Initiative” – which was placed on the local ballot after the hotel workers union submitted 46,000 signatures to the City Clerk in Long Beach, California – has become a new chapter in the City of Long Beach Municipal Code, titled “Hotel Working Conditions.”

The new code mandates that all hotels with 50+ rooms in Long Beach, California must

  • Provide panic buttons for workers to protect them against sexual assault
  • Require notices regarding the use of panic buttons to be posted in guest rooms
  • Give workers who are assaulted the right to reassignment and paid time off for reporting and consultation

Unrelated to potential assaults on hotel housekeepers, the ordinance also requires hotels to

  • Place limits on overtime and make overtime voluntary
  • Limit the amount of space that housekeepers can clean per shift
  • Keep certain records relating to the above

Why the hotel union spent resources on an initiative that does not apply to union hotels

The Panic Button Initiative (also known as Measure WW) tellingly included a significant carve-out for unionized hotels – all provisions of the new ordinance may be waived for union hotels through the collective bargaining process.

Under the guise of protecting workers, the ordinance gives an unfair advantage to union hotels in Long Beach. CONTINUE READING →