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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:

6 November 2013

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

 

ADA Defense lawyer: Pool lift litigation proliferates. Why enterprise-wide compliance is the best solution.

It has been almost a year since the Department of Justice’s ADA requirement for fixed or permanent pool lifts in “places of public accommodation” has been in effect. Now a fact (and cost) of doing business in the hospitality industry, many of our clients and friends in the industry are asking, “what’s the result of all this activity, what’s going on now?” Well, after all the lobbying, education, handwringing, headaches, counseling, and expense, we can say …. things went pretty much as predicted:

  • Many hotel owners complied with the requirements and were prompted to take a comprehensive look at all ADA requirements and bring their properties and procedures into enterprise-wide compliance.
  • Others are getting sued by serial plaintiffs, armed with a new reason to sue hotel owners under the ADA.

Marty Orlick, Chair of JMBM’s ADA Compliance and Defense Group and senior member of its Global Hospitality Group® has been helping hotels, restaurants, retailers, banks and other commercial properties bring their properties and operations into enterprise-wide ADA compliance for years. Here’s his report on what’s going on.

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Published on:

20 September 2013

Since August 2011, HotelLawyer.com has been following some of the significant events in the unfolding story of surrounding Robert T. Koger and his fraudulent schemes. But yesterday (September 19, 2013), Jason Freed of Hotel News Now published a great article that provides a more comprehensive timeline and overview, and puts together the whole story from many parts of this fascinating tale. I highly recommend it.

I was pleased to be interviewed by Jason to provide some background and insights, and to be quoted in the article. To read this article, click on the link below.

CONTINUE READING →

Published on:

18 September 2013

A version of this article was first published in the September 21, 2013 issue of Hotel Business and is reprinted with permission.

The number of hotel transactions is up by more than 50% for the first 6 months of 2013 over the comparable period last year, and is expected to top $18 billion for 2013, according to Jones Lang LaSalle. And HVS reports that the sales transaction volume of hotels is now intersecting its 22-year moving average, and predicts that hotel values will continue to grow at an average of 12% for each of the next 3 years (substantially less than the past couple of years, but still a nice increase in value).

These numbers are only the tip of the economic iceberg that hotel owners and investors analyze in depth, to help make decisions as to the right time to buy and sell hotels. As they delve deeper, they are finding a confluence of economic and market conditions that spell “opportunity.”

But how can it be a great time to buy and sell hotels? Why does the same environment indicate such different courses of investment strategy?

We will look at some of the factors that create this fertile ground, while keeping in mind that every owner and investor has a specific circumstance, investment horizon, capital situation and objective, and every hotel property has a specific condition, value, and potential for additional appreciation.

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Published on:

17 September 2013

The hotel world has been fascinated by the civil litigation and criminal actions swirling around the former President and owner of Molinaro Koger, Robert T. Koger.

In response to many inquiries, the hotel lawyers of JMBM’s Global Hospitality Group® has posted the 17-page affidavit sworn to by an FBI special agent with more than 17 years of experience, most of it in investigating white collar crimes like those charged against Koger.

If you just want the highlights, see the articles listed below.

If you want to read the details, click here to download a copy of the FBI affidavit on USA v. Koger.

CONTINUE READING →

Published on:

11 September 2013

Hotel Lawyer with the latest on the arrest and jailing of Rob Koger, formerly of Molinaro Koger

There are some significant new developments in the saga of Robert T. (“Rob”) Koger and the high profile civil and criminal cases surrounding him. Here is the latest. (Earlier articles are cited below.)

On Monday, September 9, 2013, Robert T. Koger, 47, was arrested and brought before a federal judge in the Eastern District of Virginia. At the detention hearing, a court determines whether an accused will be released from jail (on bail or otherwise) before the trial. In Koger’s case the court found that Koger is a “flight risk” and he will therefore be held behind bars where he will stay until his trial for mail fraud and other criminal charges.

Background on the case

Koger was one of the principals in the Virginia-based hotel brokerage firm of Molinaro Koger, Inc., until the publicity of Koger’s fraud and deceptions of client Host Hotels & Resorts led to the demise of his firm.

Earlier this year, on February 19, 2013, the US Attorneys’ office announced that the COO of Molinaro Koger (Jonathan Propp) had pled guilty in federal court to conspiracy to commit wire fraud as part of a 3-year, $20 million “straw buyer” scheme involving the sale of hotels for the account of Host Hotels & Resorts.

It was only a matter of time until action was taken against Koger, and now the public process has started with the arrest and incarceration of Koger.

What happened at Monday’s hearing?

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Published on:

15 August 2013

Hotel Lawyer on the reported sale by Marriott of 3 Edition hotels.

Craig Karmin and Alexandra Berzon of the Wall Street Journal broke a big story yesterday evening which appeared in the August 15, 2013 US edition of the paper at page C3. The headline is “Marriott Close to Deal to Sell Three Hotels to Abu Dhabi Fund.
The story, in which I am quoted, describes reports from people close to the deal, that Marriott International is about to close a sale of 3 Edition hotels in London, New York and Miami Beach. The reported buyer is Abu Dhabi Investment Authority, or ADIA.

Other highlights of the article:

  • Marriott has said that it planned to invest up to $800 million in the 3 hotels
  • David Loeb of RW Baird estimates that Marriott has already spent about $575 million to buy, convert and upgrade the 3 properties
  • Marriott is expected to make a profit on the sale

So what does this transaction mean?

Here is what I think this transaction means:

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Published on:

14 August 2013
Hotel Lawyers on “hotel condo” units as securities (or NOT).

An important decision on when a condo hotel does NOT involve the sale of a “security”

by

Jim Butler, Bob Braun and Guy Maisnik
Condo Hotel Lawyers

One of the most significant challenges for developers of a condo hotel project is whether the sale of the condo units constitutes the sale of a “security.” If it does, the principals and sellers of the project will have much greater compliance issues, costs and liabilities, which could make the project unworkable.

We have been advising clients on these issues in connection with more than 100 hotel mixed-use transactions since 2000. The deals usually have a significant residential component (condo hotels, hotel condos, single family homes or home sites, etc.) retail, entertainment and other uses added to a core hotel component. The Ninth Circuit opinion in Salameh v. Tarsadia Hotel (CA-9, No. 11-55479) discussed today provides a significant new level of comfort for all involved in such matters.

In an important decision yesterday (August 13, 2013) written by Judge Ronald M. Gould, a 3-judge panel of the Court of Appeals for the Ninth Circuit upheld the lower federal district court’s dismissal of plaintiff’s lawsuit arising out of their purchase of hotel condominium units at the Hard Rock Hotel San Diego, a “condo-hotel.”

The case was filed as a class action by Tamer Salameh and other named plaintiffs against some of the most respected people in Southern California’s hospitality industry, including Tarsadia Hotel, Tushar Patel, B.U. Patel, Gregory Casserly and other defendants. Notably, Playground Destination Properties, one of the first developers and most esteemed marketing companies for condo hotels, was also named in the action.

Essential to the plaintiffs’ claims was their characterization of their purchase as involving “securities” under the federal securities laws. They said that defendants offered condominium units together with a rental-management program, and doing so, constituted the sale of a “security.” The lower court dismissed the case after giving plaintiffs an opportunity to amend, finding that the amended complaint still did not state facts sufficient to find the existence of a “security.” The lower court also dismissed related common law fraud claims. For background on this issue and its importance, see “Condo Hotel Lawyer: Why does the SEC care about condo hotels?
If you don’t know what a condo hotel is, or how it fits into hotel mixed-used, we have an entire section of HotelLawyer.com and HotelLawBlog devoted to condo hotels and to mixed-use. Just use the search bar at the top for any subject or click condo hotels or mixed use!

Why is this case important?

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Published on:

13 May 2013

Meet the Money® made the news again this year, with an article on the Wall Street Journal “Developments” blog. Written by Kris Hudson, the article discusses the return of hotel construction, what types of financing are available, and which markets will be able to support new hotels.

Meet the Money® speakers Marty Collins of Gatehouse Capital, Anne Hampton of Wells Fargo Bank Hospitality Finance, Alison Cumberland and Abid Gilani of Marriott International, Kevin Mahoney of Stonebridge Companies and Paul Novak at Whitman Peterson Capital Partners were quoted in the story.

Conference speakers highlighted the CMBS market, gateway city locations, and upper-midscale hotels developments as factors that might help push construction financing in 2013, although some noted that lending standards are still strict and that many markets may not have a demand for more rooms.

If you haven’t read the article yet, you can find it here: Lenders Checking In? Hoteliers Say Construction Lending Is Reviving.

You can more great information from Meet the Money® 2013 at www.HotelLawyer.com on our RESOURCE CENTER, under “Hotel Industry Presentations.”

Published on:

www.MeetTheMoney.com
11 May 2013

Meet the Money® is one of the best places in the country for meeting the Who’s Who of the hotel world, getting financing and transactions done and catching up on the latest strategies and approaches. This year’s conference was held at the Sheraton LAX, May 6-8, 2013 and was attended by approximately 350 hotel industry leaders. Here’s a quick take on the mood of the conference and some information about
Mood of the hotel industry: optimism and sustainability of recovery

JMBM wrapped up its 23rd annual hotel conference this week amidst the strongest optimism for the hotel industry that hotel experts have seen for six years. The consensus was there is a lot of blue sky ahead. Some think the good times will only last for a couple of years, but many see a good run for at least 5 years!

Everyone at Meet the Money® seemed to be fairly comfortable that the recovery has significant sustainability, because the debt and equity markets have not gotten too frothy, and new supply has been very restrained.

Mark Woodworth of PKF summarized it well after presenting industry fundamentals by saying: “It is a great time to be in the hotel business!”
And Vail Brown gave the STR forecast that the outlook of continuing improvements is “Steady as she goes.”

Greg Hartmann of JLL sounded a slightly more cautious note. He agrees that everything looks pretty good for the next couple of years, but questions how long it can last, and suggests that investors might consider selling in the next year and a half to two years.

What inning are we in? Almost every panel gave its views, with the biggest consensus being that we are in the 4th or 5th inning — still early in the ballgame. John Alderson of Westfield thinks that the shopping center owners now getting active in adding hotels to their malls are way behind the rest of the industry (2nd inning?) and are likely to have their games continue as they implement strategic plans.

Hotel Industry Presentations from Meet the Money® 2013

Meet the Money® 2013 was buzzing with action and great information. We have decided to release some of the presentations for free download. Select presentations from Meet the Money® 2013 (described below) and are now available at www.HotelLawyer.com. Click on “RESOURCE CENTER” and then “Hotel Industry Presentations.”

CONTINUE READING →

Published on:

Jim Butler and the Global Hospitality Group®

08 May 2013

Lodging Industry Investment Council
Annual Top Ten Survey
Trends And Challenges

Strong hotel property value growth predicted, fueled by increasingly favorable hotel debt — despite overall sluggish economic growth, sequestration, unionization and Obamacare. According to the LIIC 2013 Survey, this is what the hotel industry has in store in 2013.

The Lodging Industry Investment Council (LIIC) is the hotel industry “think tank” whose membership includes the hospitality industry’s most influential investors, lenders, corporate real estate executives, REITs, public hotel companies, brokers and significant lodging equity sources. More than 80% of surveyed LIIC members have purchased a hotel in the last 12 months. Together, the members of LIIC represent ownership, control or disposition of well over $20 billion of lodging real estate.

CONTINUE READING →

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