Hotel Law Blog

Published on: October 13, 2010

Hotel Lawyer: Distress continues for hotel and CRE. New data suggests 8 year downturn, dismal prospects and increased foreclosures.

By Jim Butler and the Global Hospitality Group®

12 October 2010

Hotel Lawyer with a cold splash of realism from new economic data! If you are not ready for the “long haul,” it is time to reassess your strategies . . .

The hotel lawyers of JMBM’s Global Hospitality Group® believe investors, borrowers and lenders should assess their options and develop their strategies based on realistic assumptions and the latest hard data. If you haven’t seen the latest, this is worth looking at.

On October 6, 2010, the International Monetary Fund or IMF released its latest appraisal of the situation for real estate on a global basis (in a report entitled World Economic Outlook October 2010 Recovery, Risk, and Rebalancing). The conclusion was that the prospects in the global real estate sector are “dismal,” with a downturn that could last eight years.

“Especially in the United States, given the limited success of mortgage modification programs and the shadow inventory from foreclosures and delinquencies, this has renewed fears of a double dip in real estate markets. A lot will depend on the path of economic recovery: if employment creation remains low, risks of a double dip in housing naturally increase,” the IMF said.

But the IMF data is not all that is new. Let’s take a look at some other significant data points, including those from Fitch, Deutsche Bank and Atlas Hospitality.

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Published on: October 6, 2010

Hotel Lawyer with insights on “How to get a great hotel operator”

By Jim Butler and the Global Hospitality Group®

06 October 2010

Terminology

Contracts between hotel owners and managers (or operators) controlling the management of a hotel go by various names. They are called hotel management agreements, HMAs, hotel management contracts or hotel operating agreements. For convenient reference, this article will generally use the term “Hotel Management Agreement” or “HMA.” However all these terms can be used interchangeably and mean the same thing, just as with hotel operator or hotel manager.

Whatever they are called, Hotel Management Agreements allocate risk between the hotel manager and the hotel owner. They are critical in determining the profitability and value of a hotel.

Hotel Lawyer with a big tip on how to get a great hotel operator and a fair hotel management agreement — Why Hotel Owners Need HMA PRO™
For more than 20 years, hotel lawyers at JMBM’s Global Hospitality Group® have helped hotel owners find the best hotel operators for their properties and get fair hotel management agreements. Our clients get better results because of our experience gained in negotiating, re-negotiating, litigating, arbitrating and advising on more than 1,000 hotel management agreements and more than $87 billion of hotel transactions.

Our experience has has taught us that the traditional Request for Proposal or RFP process used to get hotel operators is too passive and ineffective. By its very nature, a “mere” RFP suggests that the owner should just wait for whatever an operator might propose, and that is simply not in the best interest of either the owner or the prospective operator.
HMA PRO™ is JMBM’s ultimate refinement of the old standby RFP. We started with the typical hotel industry RFP process still used by knowledgeable hotel consultants today, but we made some critical changes that have produced stunning results for our clients, greatly enhancing the value of the owner’s hotel.
Here’s how it works . . .

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Published on: October 2, 2010

ADA Defense & Compliance Lawyer Alert: New Regulations Now in Effect

By Jim Butler and the Global Hospitality Group®

2 October 2010

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

The U.S. Attorney General has signed into law important revisions to the Department of Justice’s Regulations implementing the Americans with Disabilities Act.

The new 2010 Standards impose both technical requirements, (e.g. the specifications a property must meet to be fully accessible), and scoping requirements (e.g. the number of rooms or elements in a facility which must be fully accessible).

Hotel owners will need to review their facilities to ensure they are in compliance with the 2010 Standards and retrofit where necessary to meet them. Developers of new hotel properties will need assurances from their design and construction companies that the new obligations and restrictions are being worked into their plans.

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Published on: September 22, 2010

Hotel Lawyer in Phoenix at The Lodging Conference . . . If you are not here, you are missing out!

By Jim Butler and the Global Hospitality Group®

22 September 2010

Hotel Lawyer with the latest pulse of the hotel industry from The Lodging Conference at the Arizona Biltmore in Phoenix Arizona.

The title of this blog says it all. This is the time and place to be – The Lodging Conference in Phoenix, Arizona. We called it at Meet the Money® in May, 2010, but the tide that started turning at the end of the first quarter 2010 has continued its flow and it seems to be unmistakable now. I expect to hear some very exciting things at the Conference here in the next few days.

I would describe the mood of the pre-conference gathering that started this evening as very “EXPECTANT.” Expecting more and better in both transactions . . . and eventually . . . perhaps more slowly . . . better in the fundamentals of the hotel industry.

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Published on: September 15, 2010

Hotel Joint Ventures: Four Keys to Success

By Jim Butler and the Global Hospitality Group®

15 September 2010

Hotel Joint ventures are springing up like weeds in the hotel industry.

Nearly two years after the collapse of the old economic order of easy money, the biggest players in the hotel industry are using the joint venture structure to seize opportunities for acquisitions and expansion.

But everyone knows joint ventures can be risky. Why is the JV model being used and is there a way to minimize the very real risks that exist in every joint venture?

In her article below, which was recently published by Hotel Business, hotel lawyer Catherine Holmes, a senior member of the JMBM Global Hospitality Group®, explains why the joint venture model is being used for hotel acquisitions and expansion, what inherent risks exist in the the JV structure, and offers “Four Keys to Success in Hotel Joint Ventures.”

Cathy’s straightforward and timely advice is based on her experience representing numerous hotel owners in the acquisition process, whether it is a debt or equity transaction, a joint venture, a public-private partnership, or a deal that requires a complex capital stack. She recently represented Formosa International Hotel Corporation in the acquisition of the Regent brand hotels with operations in Asia, Europe, the Middle East and the Caribbean.

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Published on: July 30, 2010

Hotel Lawyer: The more things change, the more they stay the same . . .

By Jim Butler and the Global Hospitality Group®

30 July 2010

Hotel Lawyer with a name change. JMBM’s Global Hospitality Group® is part of a vibrant law firm. Today, that firm announced that it is changing the firm name, but we will still be known as “JMBM.” Here’s the story.

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Published on: July 15, 2010

Global Hospitality Advisor: National implications of the July 2010 Atlas Hospitality Group distressed hotels survey

By Jim Butler and the Global Hospitality Group®

15 July 2010

Hotel Lawyer with the latest information on hotel loan defaults, foreclosures, forebearances and distressed sales in California from the Atlas Hospitality Group.

Less than two weeks after the quarter’s end, Atlas Hospitality has released its California Distressed Hotels Survey (2nd Quarter 2010).

Here is our executive summary of that report, our view of its national implications and what we think it means for owners, lenders and investors.

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Published on: July 13, 2010

Global Hospitality Advisor® with Lodging Industry Midsummer Report

By Jim Butler and the Global Hospitality Group®

13 July 2010

Hotel Lawyer with a critical update on the state of the industry

Today, the JW Marriott Los Angeles, we got an update on the state of the lodging industry from two of my favorite industry leaders: Mark Woodworth, President of Hospitality Research, and Mark Lomanno, President of Smith Travel Research.

There is some good news, and some bad news, although both reports were optimistic on the direction we are heading. Here is my take on some highlights with some pertinent slides.

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Published on: July 12, 2010

Hotel Labor Lawyer Alert: U.S. Department of Labor targets the hospitality industry

By Jim Butler and the Global Hospitality Group®

12 July 2010

Hotel Lawyer with an alert about the DOL’s historic action targeting hotels.

The U.S. Department of Labor (DOL) is taking historic action. With a huge increase in funding and staffing, the DOL is specifically targeting audits and enforcement actions for every hotel, motel, and resort in the U.S. The program will search for violations of overtime rules, minimum wage, and classification of exempt and non-exempt positions. In addition, one of the primary focal points of these audits will be employers with workers holding H-2B visas.

Hotel labor lawyer Marta Fernandez and hotel lawyer, Jim Abrams, both senior members of the JMBM Global Hospitality Group®, say, ” We expect that the DOL compliance audits will cover all of the laws administered by the DOL and WHD including H-2B labor certification wage requirements and other federal laws such as minimum wage, overtime, and family and medical leave.”

In today’s Alert, they also suggest “4 Things that you should do now — Before it is too late.”

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Published on: June 30, 2010

ADA defense lawyer: Implications of the latest ADA enforcement “sweeps” against hotels in Portland and San Francisco.

By Jim Butler and the Global Hospitality Group®

Hotel Lawyers | Authors of www.HotelLawBlog.com
30 June 2010

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

Hotel ADA defense lawyer looking beyond the latest update on ADA “sweeps” by the Department of Justice coming to Portland, San Francisco and elsewhere.

As we wrote earlier, the U.S. Department of Justice (DOJ) is continuing its program of in-depth investigations of hotels to determine whether they comply with the Americans with Disabilities Act or ADA. The investigations are called “sweeps” because they target all hotels in a given geographic area. There is also some basis to believe that the sweeps may now also focus on certain industries such as hotels, restaurants and other places of public accommodation.

There is a lot of valuable information on Hotel Law Blog about ADA Defense matters. Just go to the top of the Blog home page, click the “Hotel Law Topics” tab, and then select the first item named “ADA Defense.” You will see all the articles on this subject organized in reverse chronological order.

Although the sweeps sound an immediate call to action in the targeted areas and industries, there are broader implications that we will talk about today.

CONTINUE READING →

Jim Butler

Jim Butler is recognized as one of the top hotel lawyers in the world. He devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM’s Global Hospitality Group® — a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion.
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Robert Braun

Robert Braun is a partner in JMBM's Corporate Department and a senior member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Bob represents owners in both transactional and operational issues. He advises clients with respect to business formation, financing, mergers and acquisitions, venture capital financing, joint ventures and strategic partnerships. He has represented hotel owners in the negotiation of several hundred management agreements, as well as spa management and franchise agreements. Bob also advises hotel owners regarding telecommunications, software, internet, e-commerce, data processing and outsourcing agreements. To read Bob's articles, go to www.HotelLawBlog.com and select "Management Agreements." For more information, please contact Bob Braun at 310.785.5331 or rbraun@jmbm.com.

Marta Fernandez

Marta Fernandez is a partner in JMBM's Employment and Labor Department and a senior member of JMBM’s Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. As a management labor lawyer with more than 20 years of experience, Marta specializes in representing hospitality industry clients in all aspects of labor and employment including labor-management relations such as union prevention, collective bargaining for single as well as multi-employer bargaining units, neutrality agreements and defense of unfair labor practice charges before the NLRB. She defends employers in administrative and litigation claims, such as employee claims of sexual harassment and discrimination and counsels clients in preventative strategies such as executive training, arbitration enforcement, and policies and procedures. To read Marta's articles, go to www.HotelLawBlog.com and select "Labor & Employment." For more information, please contact Marta Fernandez at 310.201.3534 or at mfernandez@jmbm.com.

Guy Maisnik

Guy Maisnik is a partner in JMBM's Real Estate Department and a senior member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Guy's deep and broad transactional practice includes complex real estate finance and venture capital transactions, including project finance, commercial finance, leveraged leasing and real estate acquisitions. He assists clients with development, leasing and disposition, loan portfolio acquisitions, loan and debt restructure, workouts and real estate exchanges. Go to www.HotelLawBlog.com for current information in these areas. For more information, please contact Guy Maisnik at 310.201.3588 or mgm@jmbm.com.

David Sudeck

David Sudeck is a Partner in JMBM's Real Estate Department and a senior member of JMBM’s Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. David has significant experience in the vacation ownership arena, focusing on the formation and registration of condominiums, timeshares and fractional interest regimes. He negotiates hotel, spa and restaurant management agreements, and assists client in the development, acquisition, sale and leasing of hotels, golf courses and restaurants. For David's take on current issues in the timeshare arena, go to www.HotelLawBlog.com and click on the topic, "Timeshare." For more information, please contact David Sudeck at 310.201.3518 or dsudeck @jmbm.com.

Robert Kaplan

Robert Kaplan is a partner in JMBM's Bankruptcy, Insolvency and Restructurings Group and a senior member of the Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Bob represents lenders, special servicers, hard money lenders, community banks, national banking associations, distressed debt investors, and equity investors, positioning them for the best possible outcome by acting expeditiously to preserve value and increase cash flow. His industry experience and his knowledge of the current capital markets -- where distressed assets often include complex deal structures and securitized loans -- allows him to bring creative and effective strategies to the table. When aggressive litigation is the best strategy, he is a vigorous and effective advocate for his clients. Bob represented the securitized lender in the Chapter 11 bankruptcy case filed by the Clift Hotel in San Francisco, and in the subsequent negotiations and successful sale of the loan to a third party. The lender -- acting by and through GMAC Commercial Mortgage Corporation as special servicer -- was the holder of a $60 million loan secured by a Deed of Trust on the Clift Hotel. He has also served as counsel to CapMark, J.E. Robert Company, Inc., AMRESCO Management Inc. and Midland Loan Servicer in their capacity as special servicers on troubled hotel loans in CMBS pools. For more information, contact Robert Kaplan at 415.984.9673 or rkaplan@jmbm.com.

Martin Orlick

Martin Orlick is a partner in JMBM's Real Estate Department and a senior member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Marty specializes in representing hospitality industry clients in Americans With Disabilities Act (ADA) compliance and defense. He has represented more than 500 businesses in ADA issues, many of them hotels and restaurants, as well as hotel mixed-use properties. Marty is a member of the American College of Real Estate Lawyers (ACREL) and a frequent speaker on the ADA and other topics. To read Marty's articles, go to www.HotelLawBlog.comand select "ADA." For more information, please contact Marty Orlick at 415.984.9667 or morlick@jmbm.com.

Scott Brink

Scott Brink is a senior member of JMBM's Global Hospitality Group® and a partner in JMBM's Labor & Employment Law Department. Scott is a management labor lawyer with more than two decades of experience representing employers in all aspects of labor relations and employment law including union prevention, collective bargaining negotiations, defense of unfair labor practice charges before the NLRB, wrongful discharge litigation, individual and class action employment discrimination and wage-and-hour claims, sexual-harassment litigation, arbitrations, personnel policies, California wage and hour law, and employee discipline and discharge. An experienced trial attorney, Scott has litigated a number of high-profile and complex cases involving a wide range of labor and employment law matters. For more information, contact Scott Brink at RSB@jmbm.com or 310.785.5365.

Travis Gemoets

Travis Gemoets is an experienced trial attorney and represents management in all facets of labor and employment law, including wage/hour class actions, claims of discrimination, harassment, wrongful termination, trade secrets and unfair competition, union/management relations and workplace violence. He is a member of JMBM's Global Hospitality Group(r), in which capacity he negotiates union contracts and resolves labor disputes throughout the country, defends class action claims, develops strategies for the mass onboarding and separation of employees, and recommends proactive changes to employers' policies and practices in order to minimize potential liability risks. Reach him at 310.785.5387 or tgemoets@jmbm.com.

Mark S. Adams

Mark S. Adams is an experienced trial lawyer and a member of JMBM's Global Hospitality Group® and Chinese Investment Group™. He focuses his practice on business litigation including contracts, corporate and partnership disputes, and hospitality disputes and litigation. On behalf of hotel and resort owners, Mark has successfully litigated the termination of long-term, no-cut, hotel management agreements, franchise agreements, fiduciary duty issues, investor-owner disputes, TOT assessments, and more. He has wide-ranging trial experience in a variety of commercial disputes, including complex multi-party litigation and class actions. He has tried numerous cases in state courts, federal courts, and in domestic and international arbitrations, and is a frequent author and speaker on trial practice. Mark's trial wins have been covered by Forbes, Reuters, and other publications. He has obtained two of California's annual 50 largest jury verdicts in the same year. Mark has taken or defended nearly 1,000 depositions throughout North America, Europe and the Middle East. He has been quoted as an expert on noncompete agreements in the Wall Street Journal. For more information, contact Mark at 949. 623.7230 or markadams@jmbm.com.

Bennett Young

Bennett Young is a partner in JMBM's Bankruptcy, Insolvency and Restructurings Group and a senior member of the Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. His clients include lenders, financial institutions, secured and unsecured creditors, distressed investment funds, businesses, receivers, special servicers and creditors' committees. Ben represented the owner of a partially completed multi-billion dollar resort property in the restructuring of its finances and has represented lenders to hotels and casinos. For more information, contact Ben Young at 415.984.9626 or byoung@jmbm.com

Sheri Bonstelle

Sheri Bonstelle is a partner in JMBM's Government, Land Use, Environment and Energy Department, and a member of JMBM's Global Hospitality Group®. She represents owners and developers in land use, zoning, environmental, litigation and construction matters. She manages all aspects of the entitlement process, including representing clients before local and state agencies, commissions and councils. Sheri also represents clients in a variety of land use and real estate litigation matters in state and federal courts, including cases arising under CEQA and other environmental laws. Her hotel experience includes handling the adaptive reuse of an historic office building as a luxury boutique hotel. For more information, please contact Sheri Bonstelle at 310.712.6847 or SBonstelle@jmbm.com.

Kevin McDonnell

Kevin McDonnell is a partner in JMBM's Government, Land Use, Environment and Energy Department, and a member of JMBM's Global Hospitality Group®. Kevin represents developers and owners of hotels in a broad range of land use and zoning issues including entitlements, code enforcement, easements and parking requirements, as well as related Parcel Map and Tract Map subdivision issues. His hospitality experience includes hotels, condo-hotels and mixed-use projects. A registered Civil Engineer and Structural Engineer in California, and a former building official for the City of Los Angeles, Kevin brings unique experience and insight in Zoning and Building Code applications and Code Enforcement issues. For more information, please contact Kevin McDonnell at 310.201.3590 or kkm@jmbm.com.

Jamie Ogden

Jamie Ogden is a tax lawyer at Jeffer Mangels Butler & Mitchell LLP. He advises individuals and businesses on a range of tax planning, tax controversy and estate planning matters. Jamie’s experience includes all tax aspects with respect to the hospitality industry, including acquisitions and dispositions (including Section 1031 exchanges), financing and management agreements. He also serves as lead tax counsel on M&A transactions, financing, internal corporate restructurings and deferred compensation matters. Jamie also works frequently with litigators on the tax aspects of litigation, judgments and settlements. Jamie has extensive experience with foreign compliance matters, including each variation of the IRS amnesty programs. In addition to his experience in private practice, Jamie also brings several years of service from both state and federal government. For more information, contact Jamie at JOgden@jmbm.com or 310.201.3510.

Jay Thompson

Jay Thompson has extensive experience representing private companies, business owners, family offices and investors in mergers and acquisitions, private equity and venture capital transactions and private securities offerings. Jay serves as general counsel to many of his clients, their management, and board of directors, helping to shape and execute their business strategies, facilitate growth and liquidity, as well as to advise them on day-to-day legal and other strategic issues. He is known for his practical approach to business issues. Contact Jay at JThompson@jmbm.com or 949.623.7258

Marianne Martin

Marianne Martin has nearly fifteen years of experience advising clients on a variety of commercial, financing, bankruptcy, restructuring and M&A matters, with a particular niche dealing with distressed and/or turnaround situations. Her clients frequently include private equity and hedge funds, independent sponsors, family offices, public and private corporations, financial institutions and banks, healthcare-related companies, municipalities and venture capital funds. She has represented clients in various capacities, including as borrowers/debtors, lenders, acquirers, and agents/trustees in negotiating and documenting complex commercial transactions, out-of-court restructuring transactions and advising on purchasing considerations in secondary market debt transactions. Contact Marianne at MMartin@jmbm.com or 310.201.3531

Trevor Countryman

Trevor Countryman is an associate in the firm's Real Estate Department. He advises clients in all aspects of real estate transactions including property acquisitions and dispositions, financing, leasing, development and construction. Trevor's clients range from large funds to individual developers and opportunistic investors, engaged in deals involving office, retail, multi-family, single-family, mixed-use and hotel properties. Contact Trevor Countryman at 310.201.3546 or TCountryman@jmbm.com.

Vanessa Han

Vanessa Han is an associate in JMBM's Corporate group. Vanessa can be reached at VHan@jmbm.com or 310.785.5383

Vince Farhat

Vince Farhat is Chair of JMBM's White Collar Defense and Investigations practice. Vince has extensive jury trial experience and focuses his practice on representing companies and individuals in criminal and civil investigations and prosecutions by government enforcement agencies, as well as complex federal litigation. He also advises companies in connection with complex and sensitive internal investigations. Prior to joining JMBM, Vince served as an assistant United States attorney in the Major Frauds Section of the U.S. Attorney's Office for the Central District of California. Contact Vince Farhat at 310.785.5382 or VFarhat@jmbm.com.

Sarah G. Hartman

Sarah G. Hartman is a partner in JMBM's Litigation Group and a member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Sarah is an experienced litigator who advises and represents clients through all aspects of litigation, from inception through trial and appeal. She advises and represents clients in the hospitality industry, including the termination of hotel management agreements and franchise agreements. Sarah also advises and represents clients on women's health technology issues, intellectual property matters, and complex commercial disputes, including breach of fiduciary duty, fraud, breach of contract, unfair competition, products liability, employment litigation, class action defense, false advertising and other complex financial disputes. Contact Sarah Hartman at 949.623.7243 or SGHartman@jmbm.com.

Michael H. Strub, Jr.

Michael H. Strub, Jr. is a partner in JMBM's Litigation Group and a member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. He is a highly skilled trial and appellate attorney who has handled high-stakes, complex commercial and business cases for 30 years including disputes arising out of hotel construction, lending, and bankruptcy. In addition, he has represented plaintiffs and defendants in business and commercial disputes in a variety of areas. Contact Michael H. Strub, Jr. at 949.623.7233 or MStrub@jmbm.com.

Ask the Hotel Lawyer™ is a quarterly column that I write for JMBM's Global Hospitality Advisor®. If you have a question you would like to submit to Ask the Hotel Lawyer™ please use the comments box below. While your question may not be of sufficient general interest for the column, I will try to respond to you individually if you leave your contact information below.
Jim Butler.

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