Articles Posted in Ask the Hotel Lawyer™

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16 November 2021

See how JMBM’s Global Hospitality Group® can help you.

LOS ANGELES—The Global Hospitality Group® (GHG) of Jeffer Mangels Butler & Mitchell LLP (JMBM) has released an updated version of its Hospitality Credentials, detailing unsurpassed experience by providing representative clients and properties the GHG has worked on over the past 30 years. These Credentials show how the GHG has helped clients with more than 4,500 hospitality properties, valued at more than $112 billion.

Some notable accomplishments by members of the GHG over the last 12 months include:

  • Workout, recapitalization and repositioning of a $1 billion mixed-use lifestyle hotel project
  • Sale of a NYSE-traded hotel REIT’s entire portfolio of 15 upscale, select service hotels for $305 million
  • Closing more than $210 million in Commercial Property Assessed Clean Energy loans (C-PACE)
  • Assisting clients with hotel management and franchise agreements for properties worth more than $1.5 billion
  • Serving as primary counsel for lenders on more than $2.2 billion in distressed hotel, retail and office loans during the global pandemic, including over $500 million for a single client

CONTINUE READING →

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10 November 2020

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on Data Technology, Privacy & Security.

On November 3rd, Californians voted to approve Proposition 24 which amends the California Consumer Privacy Act to include expanded consumer rights and greater privacy protections.

The California Privacy Rights and Enforcement Act – which also establishes an enforcement agency to guarantee strict compliance – places additional obligations on businesses to ensure that consumer data is transparent and secure. Given the scope of the Act and the short timeframe for compliance, hotels should immediately start looking at their data profiles and security to avoid running afoul of the new rules.

Bob Braun, senior member of JMBM’s Global Hospitality Group® and Co-Chair of the Firm’s Cybersecurity & Privacy Group, explains the major provisions of the Act and discusses the challenges hotels face as they look to address its requirements.

New Challenges for Hotels:
The New California Privacy Rights and Enforcement Act of 2020
by
Bob Braun, Hotel Lawyer

Many races and initiatives that California voters considered on November 3 are still undecided, but Proposition 24, the California Privacy Rights Act of 2020 (the “CPRA”) isn’t one of them.  The California electorate approved Proposition 24 by a comfortable margin – 56% of Californians voted in favor.

Like its predecessor the California Consumer Privacy Act of 2018 (the “CCPA”), the impact of the CPRA won’t be felt immediately.  It goes into effect on January 1, 2023, and many of its provisions are unclear and will require study.  But hotel companies with a presence in California will need to consider its requirements, and given the scope of the law, addressing its requirements early will be essential.

New Sheriff in Town

Perhaps the most significant development in the CPRA is the establishment of a new agency, the California Privacy Protection Agency, dedicated to handling enforcement and compliance with privacy regulations.  This makes California the first state with an agency focused solely on enforcing privacy laws.  This new agency will replace the California Attorney General in interpreting and enforcing the CCPA.  The ultimate impact of the agency will develop as its members are selected and interpret its mandate, but it is clear from the CPRA that it has broad authority to bring civil and criminal actions.

Select Key Provisions

The CPRA is an extension and modification of the CCPA.  It adds a number of new definitions and provisions that, in some cases, extend the scope of the CCPA and, in other cases, clarify the requirements of the CCPA.  The result is that hotel companies that already comply with the CCPA will need to revisit their policies and procedures to ensure compliance with the CPRA, and any firms that have not yet considered CCPA compliance have a steep learning curve.  Key provisions include: CONTINUE READING →

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13 May 2020

Click here to see How JMBM’s Global Hospitality Group® can help you, here for the latest articles on the coronavirus and here for the latest materials on loan modifications, workouts, bankruptcies and receiverships.

COVID: First of kind Wisconsin Supreme Court decision strikes down state’s stay-at-home order by vote of 4 to 3

Wisconsin Governor Tony Evers issued his stay-at-home order for nonessential businesses on March 18. On April 16, he extended the order until May 26. Reports say that the governor declined to negotiate with legislators two weeks ago on a compromise to the terms of the restrictive order, preferring to see what the court decided.

It was a winner-take-all decision. This evening, that order was invalidated and the court refused the state’s request for a six-day stay to allow GOP lawmakers and the governors to work out new rules. As a result, all state restrictions are now removed on social gatherings or business.

After a 90-minute online video conference hearing before the Wisconsin Supreme Court last week, the court today issued a decision striking down the governor’s order.

The court ruled that the government exceeded the statutory authority granted during an emergency, characterizing the order as “confining all people to their homes, forbidding travel and closing businesses.”

Justice Rebecca Bradley was one of the concurring justices. During oral arguments last week, she asked the attorneys defending Andrea Palm, Wisconsin’s top health official the following question:

Isn’t it the very definition of tyranny for one person to order people to be imprisoned for going to work, among other ordinarily lawful activities?

The state argued that the legislature gave the health department officials such power, and said people will die if the court strikes down the order. CONTINUE READING →

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02 January 2020

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

 

My partner, Bob Braun, senior member of JMBM’s Global Hospitality Group® and Co-Chair of the Firm’s Cybersecurity & Privacy Group, has written extensively about the California Consumer Privacy Act that became effective January 1, 2010.  In his excellent article below, he describes how the CCPA will impact the hotel industry.

— Jim

CCPA: Loyalty Programs, Data Retention and the Brave New World of Privacy

by Robert E. Braun

This article first appeared in the Hotel Business Review and is reprinted with permission from www.HotelExecutive.com.

The California Consumer Privacy Act (the “CCPA” or the “Act”) is a piece of consumer privacy legislation which was signed by California Governor Jerry Brown on June 28, 2018, and goes into effect on January 1, 2020. The Act is, far and away, the strongest privacy legislation enacted in the United States at the moment (although there are a number of contenders for that honor), giving more power to consumers to control the collection and use of their private data, and is poised to have far-reaching effects on data privacy.

What is the CCPA?

It is estimated that more than 500,000 companies are directly subject to the CCPA, many of them smaller and mid-size business, where the detailed requirements of the Act – disclosure and notice procedures, opt-out rights, updating privacy policies, and revising vendor agreements – is daunting. As discussed below, many hotels and hotel companies will be directly impacted by the Act, either because their qualify as a “business” as defined in the CCPA, or because they are associated with companies – brands and management companies – that are subject to the Act. Hotel owners, managers and brands that have not grappled with the requirements of the CCPA need to move quickly to do so, or risk potential liability under the penalty provisions of the Act.

Where did the Act Come From?

In early 2018, Alistair McTaggart, a California real estate developer, led an effort to include a new privacy law – the Consumer Right to Privacy Act of 2018 – on the November 2018 California ballot. By June 2018, supporters of the initiative had gathered enough signatures to earn a place on the November ballot. In response, California legislators, working with California businesses and other interest groups, negotiated and passed a substitute bill – the CCPA – in exchange for an agreement to drop the more restrictive text in the Consumer Right to Privacy Act from the November ballot.

The Act is aggressive, and cites the March 2018 disclosure of the misuse of personal data by Cambridge Analytica, as well as the congressional hearings that followed which highlighted the fact that any personal information shared on the internet can be subject to considerable misuse and theft. This prompted the California legislature to move rapidly to protect Californians’ right to privacy by giving consumers much more control of their personal information. CONTINUE READING →

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24 September 2019

Click here for other cannabis-related articles.

The column below was first published in the October 2019 issue of Hotel Management and is reprinted with permission.

Why are so many hoteliers talking about cannabis hotels?
by
Jim Butler, Hotel Lawyer
Legal cannabis sales exceeded $10 billion in 2018, and are expected to exceed $20 billion by 2025. 33 states plus the District of Columbia have legalized marijuana for recreational  or medical purposes (or both). With all this activity, many sense an opportunity to generate more guests and profits by developing “cannabis hotels”.

Are you recommending your hotel clients dive into this?

No, except as a limited opportunity to explore carefully. Our law firm is extremely active in the hospitality industry and is one of few full-service firms in the country with a dedicated cannabis group, so we would certainly present a cannabis opportunity to the hotel industry if we thought it was viable. But we think cannabis is a “false flag” opportunity for hotels, presenting more problems than opportunities.

You say more problems than opportunities. Why?

Cannabis is still a Schedule 1 substance prohibited by Federal law. Federal agents can seize product and arrest people trafficking in cannabis products, even in states where it is legal.

The Federal illegality spooks banks with FDIC insurance. Does any hotel want to risk its banking relationships and lines of credit to dabble with cannabis?

The IRS can deny ordinary and necessary business deductions to taxpayers who traffic in Schedule 1 substances.

The regulatory situation is very complex with widely divergent state and local regulations, making it difficult or impossible to formulate uniform procedures and business approaches.

In many jurisdictions, it is likely that the property would lose all liquor licenses if it distributes cannabis products. CONTINUE READING →

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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 →

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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 →

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15 February 2019

$87 billion in hotel transactions involving more than 3,900 properties
LOS ANGELES—The hotel lawyers of JMBM’s Global Hospitality Group® are pleased to present their updated Hospitality Credentials, which include clients and projects that represent more than $87 billion in hotel transaction experience involving more than 3,900 properties worldwide – more than any other law firm.

“If you are a hotel owner, developer, or capital provider, our hospitality lawyers can provide expertise and experience you just won’t find elsewhere,” said Jim Butler, Chairman of JMBM’s Global Hospitality Group. “Whether you are buying or selling a hotel, developing a new one, need a privacy and cybersecurity plan, or defend an ADA lawsuit – we have lawyers who know the ropes, and can guide you every step of the way.”

JMBM’s Global Hospitality Group provides a full range of services to the hospitality industry including:

  • ADA compliance & defense
  • Cannabis
  • Celebrity chef agreements
  • Construction
  • Corporate governance
  • Cybersecurity
  • Data privacy
  • Development
  • Equity & joint ventures
  • Expert witness
  • Fiduciary duty
  • Financing
  • Foreign investment
  • Franchise & licensing
  • Hotel-specific contracts
  • Labor & employment
  • Land use & environmental
  • Leasing
  • Litigation
  • Management agreements
  • Mergers & Acquisitions
  • Opportunity Zone
  • Proposition 65
  • Purchase & sale
  • Shareholder disputes
  • Tax
  • Trademark & copyright
  • Trusts and estates
  • Union negotiations
  • Union prevention
  • Vacation ownership
  • Workouts, bankruptcies & receiverships
“Exceeding $87 billion in hotel transactions involving 3,900 properties is a new milestone, and one I am proud to announce,” said Butler. “I am grateful to all of our wonderful hospitality clients who have shown us their trust and confidence over the years and continue to provide us with challenging and meaningful work.”

About JMBM’s Global Hospitality Group
JMBM’s Global Hospitality Group is the premier hospitality practice in a full-service law firm and the most experienced legal and advisory team in the industry. The Group publishes the Hotel Law Blog and hosts the annual Meet the Money® National Hotel Finance & Investment Conference (May 6-9, 2019 in Los Angeles). For more information visit www.HotelLawyer.com.

Contact:

Jim Butler
jbutler@jmbm.com
+1 310-201-3526

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12 February 2019

Recently, my partner, Guy Maisnik, and I spoke about hotel retail mixed-use development with Kelsi Maree Borland of GlobeSt.com. Her article, Why Retail Owners Are Partnering With Hotels ran with the subtitle, With retail evolving to be more experience-driven, retail owners are finding the benefits of adding boutique hotels to shopping centers.

Retailers adding hotels to the mix is nothing new – but they may be more motivated than ever. The Hotel Law Blog has been covering hotel mixed-use projects — where the hotel provides the catalyst for social activity at shopping centers, office complexes, and residential buildings — since 2009. At that time, retail sales were suffering due to the Great Recession.

From GlobeSt.com:

“The Great Recession taught retailers that the old mantra was dead”, says Maisnik. “’If you build it, they will come’ may work in the movies but not for increasing retail sales. There were just too many stores and they were boring, outmoded and couldn’t attract shoppers. The drivers for adding hotels to retail projects have not changed in the last 10 years but the force of the drivers and their impact has increased tremendously. Failure to adopt and grow to meet consumers’ desires can be the death knell for retailers.”

Add to this the spectacular growth of online sales, which accounted for 19.1% of total retail sales in 2018, and it is no wonder that brick-and-mortar retailers are hurting. Some, like Sears and JC Penney are scrambling for survival.

From GlobeSt.com:

“To survive the challenges from online retailing, brick and mortar retail will need to create exciting environments for consumers, where art, music, events, convenience and lifestyle provide a magnet for consumers. Properly done, hotels can be an important part of creating this magic, but hotels provide new levels of complexity in mixed-use projects with their own unique norms, customs, and players.” Jim Butler

What retail properties are good candidates for a hotel, and what should owners interested in including a hotel look for?

To create a great mixed-use project, each component of the project must be strong and must be tested against the fundamentals for that type of real estate use. Just as retail developers go through their checklists to determine what will make a great retail center, if there is to be a hotel, office, entertainment, or residential component, each piece of the puzzle must be tested against its own unique criteria for success. This is particularly true for hotels which need demand, and require a rigorous feasibility analysis. CONTINUE READING →

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Recently, a Chinese government delegation visited Jeffer Mangels Butler & Mitchell LLP.  The delegation included some of the highest-ranking officials from a top Chinese government agency – “China State Administration of Foreign Exchange” – an agency that directly oversees the investment of $3 trillion of China’s foreign reserve. 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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