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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.

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29 December 2021

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

As hotels find new ways to use technology to attract guests and enhance their properties, they need to remain aware of the security challenges these technologies present.

Bob Braun, senior member of JMBM’s Global Hospitality Group® and Co-Chair of the Firm’s Cybersecurity & Privacy Group, explains three basic issues for 2022 that all hotel owners need to be aware of to ensure their business and guest information remains secure.

Security Challenges in the Hotel Industry
by
Bob Braun, Hotel Lawyer

Like virtually all industries, the hotel industry continues to be challenged by cybersecurity concerns. As we approach 2022, hotel owners and operators need to address some basic issues that impact the security of their systems and their guests.

  • Wi-Fi. Providing wireless internet to guests has become a “must-do” for hotels – it’s not too much of an overstatement to say that a potential guest won’t stay at a hotel that doesn’t provide free Wi-Fi. But hotel Wi-Fi systems, particularly those in public areas, have long been a soft underbelly of cybersecurity. In the past 10 days, TechCrunch+ reported that “an internet gateway used by hundreds of hotels to offer and manage their guest Wi-Fi networks has vulnerabilities that could put the personal information of their guests at risk.” The system uses hardcoded passwords that are easy to guess and allow an attacker to gain remote access to the gateway’s settings and databases; they can then use that knowledge to access and exfiltrate guest records, or reconfigure the gateway’s networking settings to unwittingly redirect guests to malicious webpages.

CONTINUE READING →

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27 December 2021

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest on labor and employment guidance.

Labor & Employment New Year Round-Up
What to Expect in 2022

Several new pieces of California legislation have either recently gone into effect or will take effect in 2022, impacting nearly all employers and how they handle employment agreements, disability related to COVID, training, rehiring and retention, and a range of other practices. A new presidential administration also means a shift in the political landscape and the role played by the NLRB, OSHA and other regulatory bodies.

Our round-up will help you determine which key issues may impact you in 2022; contact us to be sure you’re ready for all these upcoming changes. Click the “read more” link for each topic to see a comprehensive summary.

Expansions to the California Family Rights Act

Effective January 1, 2022, AB 1033 adds “parent-in-law” to the list of persons that an employee may take time off to care for, pursuant to the California Family Rights Act (CFRA). It also recasts the notice provisions of the small employer family leave mediation pilot program to require the DFEH to notify an employee of the requirement for mediation prior to filing a civil action, and requires the employee to contact the DFEH’s dispute resolution division prior to filing an action.

What this means for employers: Employers should review family leave policies to ensure they are compliant with AB 1033. Although the law adds a new category of person an employee may take time off to care for, it does not expand the total amount of leave an employee is entitled to take per 12 month period. Small employers should be aware of their ability to request mediation, and should consult with labor and employment counsel immediately upon receiving notice by a plaintiff or the DFEH that a plaintiff is seeking a civil lawsuit—the deadline to request a mediation is only 30 days from receipt of notice.

Read the full article.

Changes to the Fair Employment and Housing Act

Effective January 1, 2022, SB 807 amends various statutes concerning the Department of Fair Employment and Housing (DFEH) procedures when enforcing California’s civil rights law—notably, the FEHA. These changes include tolling the deadline for the DFEH to file a civil action under the FEHA while a dispute resolution is pending, increasing the amount of time employers must keep certain records, and authorizing the DFEH to appeal court decisions.

What this means for employers: Employers should review their current record retention policies and amend them as necessary. This also provides an opportunity to ensure that employers are retaining all the necessary records so that they do not face unnecessary penalties or subject themselves to avoidable liability. SB 807’s tolling of the statute of limitations deadline provides additional leeway to employees who are seeking redress, and the authorization for the DFEH to appeal decisions grants it additional flexibility when pursing actions against employers.

Read the full article. CONTINUE READING →

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14 December 2021

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on Buying and Selling a Hotel.

JMBM Represents Prism Hotels & Resorts in Sale to Aimbridge Hospitality

The Global Hospitality Group® of Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to announce the successful closing of the sale of our client Prism Hotels & Resorts (prismhotels.com) to Aimbridge Hospitality (aimbridgehospitality.com). Prism specializes in hotel management, resort development management, and management of hotels in receivership and Ambridge is a leading global hospitality company.

Partners Guy Maisnik and Jay Thompson led the JMBM team with Jamie Ogden working unrelentingly on the pre-closing restructure.

In addition to a strong presence in traditional hotel management, Prism boasts the industry leading hotel receivership advisory and “turnaround” services involving the management and restructuring of properties that are economically distressed.

“In a year marked by immense change, it’s fitting that we announce the biggest moves in our company’s storied 38 year history,” Van said in a press release. “Close relationships have become integral to our company’s identity, and we place tremendous value in our people with whom we’ve grown together and the great properties we service. It’s with those values in mind that we have selected Aimbridge Hospitality to carry the Prism legacy forward. Aimbridge’s access to best-in-class resources and systems, coupled with their highly effective and experienced leadership team and deep understanding of our Most Satisfied Owner philosophy, makes them a perfect fit. The Prism Difference is alive and well, and we know the passion and dedication of our teams on the ground will continue to shine through this transition. We are inspired by this opportunity and excited to be part of Aimbridge Hospitality as we write the next chapter of history together. Our best is yet to come.”

“We are excited to continue Aimbridge’s growth with the acquisition of Prism.,” said Michael J. Deitemeyer, President & CEO of Aimbridge Hospitality. “With our global resources and Prism’s stellar reputation, this acquisition presents great opportunity for all of us. We look forward to welcoming their hotels, owners and talented team to Aimbridge and taking Prism’s incredible Most Satisfied Owner approach and robust lender services arm to new heights together.” CONTINUE READING →

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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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2 November 2021

See how JMBM’s Global Hospitality Group® can help you.
Click to see our category-killer experience with hotels. See also our distressed loan credentials. And click here for the latest blog articles on loan modifications, workouts, bankruptcies and receiverships, and here for The Lenders Handbook for Troubled Hotels.

Join JMBM’s Global Hospitality Group® at Fishing for Solutions 2021 

The Global Hospitality Group® is pleased to sponsor and participate in Fishing for Solutions, the conference dedicated to servicing defaulted hotel loans hosted by Prism Hotels & Resorts. This is the conference’s 16th year.

Guy Maisnik, Partner and Vice Chair of the Global Hospitality Group®, will moderate a session for the program titled “Hotel Receiverships / Receivership Sales” alongside a panel of experts on November 4 at 1:15pm.

Fishing for Solutions is an educational seminar and social gathering strictly limited to Special Servicers, Bank Special Asset Specialists, Debt Fund Asset Managers and Life Company Loan Asset Managers. Conference attendance is complimentary.

You can learn more and register here.

Panel Lineup for “Hotel Receiverships / Receivership Sales”

  • Guy Maisnik (Moderator) is a Partner and Vice Chair of the JMBM Global Hospitality Group. Guy has over four decades of commercial real estate transactions with a strong expertise in hotels and finance.
  • Chris Chauvin (Panelist) is a partner at Holland & Knight. Chris represents clients before federal and state trial and appellate courts. He focuses his practice on litigation, arbitration and counseling on matters involving real estate, including real estate capital markets, with an emphasis on special servicers in the commercial mortgage-backed security market.
  • Jim McGee (Panelist) is an Attorney at Munsch Hardt. Jim’s practice focuses on commercial litigation including a concentration on representation of state court and federal equity receivers, director and officer litigation, financial services representation, lender liability defense and creditors’ rights. Jim has substantial experience representing both State and Federal receivers appointed in securities fraud cases. He has more than 15 years of experience in representing financial institutions consisting of commercial mortgage lenders and servicers, national banks and insurance companies.
  • John Bailey (Panelist) is the Chief Financial Officer of Prism Hotels & Resorts. As Prism’s CFO, John leads the financial management functions of Prism’s management and investment business, including risk management, legal, and receivership administration. His professional responsibilities also include supporting Prism’s new business development team, serving as court appointed restructuring officer for high profile bankruptcies, and chairing Prism’s investment committee.

CONTINUE READING →

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13 October 2021

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

The Global Hospitality Group® of Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to announce that their team has completed $210 million in C-PACE (Commercial Property Assessed Clean Energy) financing transactions in the past 12 months, for hotel, retail and multi-family real estate clients. Led by Senior Partner David A. Sudeck, the Group has worked on both the lender and borrower side of these transactions, and has represented some of the leading names in PACE financing.

“David and his team have been structuring these transactions since the beginning of the C-PACE program, and have developed an expertise in this area of financing,” said Jim Butler, Chair of JMBM’s Global Hospitality Group®. “This type of financing has become especially beneficial for clients during unpredictable economic fluctuations due to COVID.”

C-PACE is a low-cost, nonrecourse financing that creates a lien on the real property and is repaid through property taxes. In most cases, there is no balance sheet or personal liability of the owner or developer. Over the past several years, C-PACE financing has gained wider acceptance, and moved from a novel technique to a widely-accepted, practical solution to financings.

“Over the years, C-PACE has become an increasingly recognized part of the financing toolkit; the COVID downturn motivated lenders to become familiar with PACE in the capital stack,” said Sudeck. “As a result of that familiarity, we find that these same lenders are embracing the inclusion of PACE financing as an important part of a post-COVID marketplace.” CONTINUE READING →

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27 September 2021

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on Buying and Selling a Hotel.

JMBM Is Hotel Counsel for Condor Hospitality in $305 Million Hotel Portfolio Sale 

The Global Hospitality Group® of Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to announce its representation of Condor Hospitality Trust in the sale of the company’s entire portfolio to Blackstone Real Estate Partners. The $305 million deal was announced September 23, 2021 and is expected to close by the end of the year.

Condor Hospitality Trust (NYSE American:CDOR) is a publicly-traded real estate investment trust specializing in the ownership of premium-branded select-service, extended stay, and limited-service hotels franchised under brands including Hilton, Marriott, and IHG. JMBM represented the company as hotel counsel in connection with the initial bidding process and also provided guidance on the due diligence process and disclosure requirements, coordinated shareholder approvals and voting agreements, and negotiated the definitive purchase contract for the sale.

The Firm has represented Condor as hotel counsel since J. William Blackham became President and CEO in 2015. Known then as Supertel Hospitality Inc., owner of the Super 8 franchise and related economy hotels, JMBM assisted in the disposal of nearly all of the company’s $100 million in economy hotels and the subsequent purchase of the 15 upscale, select-service hotels sold in the current Blackstone deal. The hotels sold represent nearly 2,000 rooms and are located across eight states, including Georgia, Texas, and Florida.

“We have worked with Condor to implement its business plan for six years, and are pleased to have successfully counseled them through this next step,” said Jim Butler, Chair of the JMBM Global Hospitality Group®. The JMBM Condor team was led by Jim Butler, Guy Maisnik, Jeff Myers, and Caleb Gilbert.

The all-cash deal is part of a liquidation and dissolution plan, concluding with the eventual distribution of proceeds to the company’s shareholders. “We believe that this is an extremely attractive transaction for the company’s shareholders with a highly credible and very experienced buyer,” said Blackham in Hotel Business.

McGrath North Mullin & Kratz acted as Condor’s corporate counsel. Simpson Thatcher & Bartlett represented Blackstone. CONTINUE READING →

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01 July 2021

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

Is Commercial PACE (C-PACE) financing for your hotel or real estate development?

Global Hospitality Group® Chair Jim Butler was recently featured on the California Lodging Investment Conference’s official interview show, [CLIC] Connect. In this episode, Jim answers some current hot questions about C-PACE financing such as:

  • What is Commercial PACE financing?
  • What construction and upgrades are eligible for C-PACE financing?
  • How can Retroactive PACE free up cash from completed projects?
  • Why is everyone talking about C-PACE financing now?
  • Is C-PACE already “mainstream” commercial real estate financing?
  • Are there any problems or challenges with C-PACE?
  • Where can I learn more?

Click here to watch the full interview.

JMBM’s Global Hospitality Group® is a proud sponsor of the upcoming California Lodging Investment Conference. For more information, visit CLIC’s website here. CONTINUE READING →

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25 June 2021

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

Some believe the recent Behring v. Wolf case revitalizes EB-5 financing for developers because it rolls back the EB‑5 minimum investment to $500,000

On June 22, 2021, in the case of Behring Regional Center LLC v Chad Wolf, a federal court in the Northern District of California effectively invalidated the final rules for EB-5 which became effective in 2019. These rules raised the minimum foreign immigrant investment from $500,000 to $900,000 and imposed other restrictions.

Many commercial real estate developers are hoping this development will launch a new surge of EB-5 financing that could fuel their projects, as was the case for years (until a few years ago when the music stopped).

Don’t get too excited about reliable EB-5 financing coming back – but there may be a better alternative . . .

For many years, we helped developers source and close EB-5 financing for new construction and development projects. We had a 100% success rate in closing all our EB-5 deals totaling more than $1.5 billion. But we have not felt comfortable using this source of capital for several years, because none of the reliable sources we worked with were able to commit to a deal. They couldn’t raise the immigrant investor funds.

What happened? More than 85% of the funding came from Chinese immigrant investors, and the USCIS processing times for immigrant visas grew to more than 15 years! No investor wants to wait 15 years to get the immigration visa he is paying for today.

These processing backlogs effectively killed EB-5 as a reliable and robust source of financing for commercial real estate development. The court decision invalidating the final rules on EB-5 will not fix this or any other issues with the program.

But a better alternative to EB-5 financing has come mainstream and should be considered. Many are not aware of this alternative – Commercial PACE (or C-PACE).

Is C-PACE the “new EB-5” financing for commercial real estate developments? YES and NO . . .

C-PACE is the “new EB-5” financing for commercial real estate developers, but only in one notable sense: virtually every commercial real estate developer will at least seriously consider C-PACE for projects in the 2020s, just as they did with EB-5 in the 2010s.

Other than the skyrocketing popularity and even more favorable terms, the C-PACE solution has nothing at all to do with the EB-5 program CONTINUE READING →

Published on:

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18 June 2021

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

Retroactive Commercial PACE (C-PACE) and C-PACE can provide critical capital and liquidity

In the past few years, Commercial PACE (C-PACE) financing has transformed from a novel financing technique to a popular and important source of capital for all types of commercial real estate — particularly hotels scrambling for financing to reopen and take advantage of the “Great Recovery” now underway.

Because of our early involvement and experience, C-PACE financing has become quite a specialty niche in the hotel financing resources of our Global Hospitality Group®, representing both C-PACE lenders and borrowers. Because of our profile in this area, I was recently asked to give my thoughts on its benefits in a timely article written by Bryan Wroten for Hotel News Now. You can read an excerpt below or click the link to read the entire article.

PACE Lending Allows Hoteliers
To Recapitalize Past Projects

By Bryan Wroten, Hotel News Now

A lending platform designed to fund investments in renewable energy and energy-efficient improvements, commercial PACE lending has helped hotel owners and developers in need of capital during the COVID-19 pandemic.

PACE financing, which stands for property assessed clean energy, originated in the late 2000s, said Jim Butler, partner at Jeffer Mangels Butler & Mitchell and chairman of the law firm’s global hospitality group. This type of lending has taken a while to fully catch on with developers because state legislatures have to pass laws to enable it. Often county and local municipal governments must pass their own legislation, as well.

Currently, 36 states and Washington, D.C., have authorized commercial PACE lending, and of those, 24 states and D.C. have active lending occurring.

PACE financing has the potential to reach into the billions and trillions of dollars, and part of that potential comes from the hotel industry, Butler said.

The pandemic has devastated U.S. hotels, forcing some to close temporarily or permanently. Hotel owners are dealing with the revenue declines of 2020 while also facing property improvement plan requirements over the next few years.

“They’ve been saving every penny and going to the bare minimum, but they’re going to have to do property improvement plans and rehire people … train them and do marketing,” Butler said. “They’re facing a lot of costs in getting back into business.”

One of the things that makes PACE financing so appealing to borrowers is it’s a self-assessment, similar to a tax improvement district, except the owner voluntarily imposes a long-term tax agreement on the property for up to 30 years, Butler said. It’s a non-recourse loan, and interest rates are typically low at about 5% to 6% because of its high security. Rather than the owner holding the debt, the loan remains with the property even following a transaction. 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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