• Hospitality

    An improved economy, easing of the credit market and an uptick in occupancy and room rates have pushed the hospitality sector back into a “growth through acquisition or development” mode. During the credit crunch, Manatt’s multipractice Hospitality group, which includes lawyers from the firm’s real estate, land use, environment, bankruptcy and financial restructuring, capital markets, mergers and acquisitions and litigation practices, proved its mettle by helping owners, operators, developers, lenders and investors in the hospitality, recreation and entertainment industries restructure or sell off underperforming or nonperforming assets. We also assisted clients with opportunistic buying. We expect 2014 to see many more sale transactions and new hotel development in key markets. However, while hospitality is definitely on an upswing, the transactions environment remains complex, with deferred capital improvements, conservative underwriting standards and lower yield expectations complicating both acquisitions and new development.

    Frequently transactions involve properties with complicated structures and histories. For example, Manatt represented international real estate investment and services company Kennedy Wilson in purchasing The Ritz-Carlton, Lake Tahoe, and The Ritz-Carlton Residences, Lake Tahoe. Both properties are located in Northstar at Tahoe and comprise a 170-room luxury hotel, 23 branded condominiums and adjacent undeveloped land entitled for additional condominiums. The transaction was completed in about six weeks. Manatt’s representation drew praise from Kennedy Wilson general counsel Kent Mouton, who said, “The Ritz-Carlton, Lake Tahoe, acquisition was a complicated transaction with multiple moving parts. The talented and experienced Manatt team seamlessly worked together to separately review each piece of the puzzle and weave all the pieces into one comprehensive and very informative analysis of the issues and suggested solutions.”

    Turning Obstacles Into Opportunities
    As a firm with Southern California roots that has seen countless environmental challenges to commercial, residential, hospitality, educational, stadium, retail mall, mixed-use and infrastructure projects, Manatt has earned a reputation for being able to help clients achieve their land entitlement and development objectives in some of the state’s most politically and environmentally sensitive areas. Our strong relationships with the California Coastal Commission and other regulatory bodies have been of particular benefit to developers of resort hotels and other recreational venues whose attraction to the state’s most pristine, scenic and enchanting areas inevitably raises environmental concerns. From sandy shore to brownfield site, Manatt’s land use, environmental and government lawyers have repeatedly demonstrated a keen ability to thread the regulatory needle in order to secure the multiple land use and site plan approvals required to execute large-scale projects.

    Finding Financing 
    Banks and insurance companies are lending again—but with tighter criteria than before the economic slowdown. Having represented parties on all sides of the financing negotiation table, Manatt has the experience and market knowledge required to assist developers in securing acquisition, development and construction financing; to help owner-operators refinance existing loans or fund expansion; and to assist REITs, private equity real estate funds and other financial institutions in the acquisition and disposition of ownership interests in hospitality companies and assets and in the structuring of mezzanine, conduit and other nontraditional financing structures.

    We Can Work It Out 
    While bankruptcy filings in the hospitality space are down, loan modifications have become commonplace and are expected to remain so as banks continue to feel pressure from the regulators to unload bad commercial real estate debt. Manatt’s Hospitality team has experience in loan workouts, partnership and joint venture restructures, repositioning issues, employee termination issues and renegotiation of supplier agreements.

    Full-Service Capability 
    Manatt’s Hospitality clients, no strangers to the buffet concept, appreciate our full-service capability, which includes negotiating development and construction contracts, ground and space leases, franchise agreements, management contracts, and service agreements; providing labor and employment advice; and resolving disputes, whether through arbitration or litigation, relating to lease terms, franchise agreements and employee terminations.

    Attorneys & Professionals

    Bauman, Sharon B. San Francisco 415.291.7425
    Boggs, T. Hale Los Angeles 310.312.4269
    Brunswick, Alan M. Los Angeles 310.312.4213
    Dillingham, Blase P. Los Angeles 310.312.4159
    Edelstein, Jeffrey S. New York 212.790.4533
    Edwards, Steve Orange County 714.371.2546
    Hallem, Timi Anyon Los Angeles 310.312.4217
    Kallick, Ivan L. Los Angeles 310.312.4152
    King, Sandra R. Los Angeles 310.312.4278
    Lavie, Jen Deitch New York 212.790.4595
    Muller, Tom Los Angeles 310.312.4171
    Polentz, Michael Palo Alto 650.251.1440
    Ray, John L. Washington, D.C. 202.585.6565
    Triana, Ray F. San Francisco 415.291.7442
    VanBrackle, Barrie Washington, D.C. 202.585.6530


    Representative Clients

    • The Beverly Garland Holiday Inn
    • Del Taco LLC
    • DiamondRock Hospitality Co.
    • Isle of Capri Casinos Inc.
    • Jamba Juice Co.
    • Kendall-Jackson Wine Estates Ltd.
    • Kennedy Wilson
    • Lowe Enterprises Inc.
    • The Ronald Family Trust A (Getty Family Trust)


    Representative Matters

    Recent matters handled by lawyers in Manatt's Hospitality Practice Group include:

    • Regular representation of developer on resort and conference hotels in California and other western states, including obtaining all approvals for a 582-room hotel overlooking the Pacific Ocean, and negotiating the ground lease and all financing and transactional documents for a 210-room conference hotel in San Diego County.
    • Representation of owner in development and financing of hospitality, single-family home, restaurant and fractional interest project in the County of Napa.
    • Representing purchaser of 25,000 acres in Santa Barbara County, including 9 acres of undeveloped California coastline.
    • Advised on tax-deferred, split-off transaction involving a major restaurant chain.
    • Regular advice on establishing and managing equity incentive plans and other benefit plans.
    • Regular representation over the past ten years of national hotel owner and operator throughout the United States, including negotiation of multiple contracts relating to internet services, in-room entertainment, reservations systems, licensing, advertising and promotion and other transactional service agreements.
    • Preparation of executive compensation and equity incentive contracts in connection with a national hotel operator's initial public offering.
    • Defense of major restaurant chain in wage and hour class-action suit.
    • Representing developer in negotiating disposition and development agreement, development agreement and other transactional agreements needed for the purchase of sites from a redevelopment agency to be developed into two new hotels and a retail center.
    • Representing developer in drafting and negotiating purchase and loan documents and development agreement for golf course and residential project in Palm Desert.
    • Representation of restaurant chains in connection with private equity offerings.
    • Representation of Southern California hotel and restaurant owner and operator in employment matters (including negotiation and drafting of employment agreements, counseling regarding all human resources matters, including wage and hour, employment discrimination, wrongful termination and ERISA disputes, and representation before all local, state and federal agencies, such as the California Labor Commissioner, the California Fair Employment & Housing Administration, the federal Equal Employment Opportunity Commission and the U.S. Department of Labor) and labor matters (including collective bargaining, union contract interpretation, arbitration of union grievances, and representation before the National Labor Relations Board).
    • Representation of a public restaurant chain in connection with securities compliance and reporting matters.
    • Representation of national hotel owner and operator in land-use entitlement matters for mixed-use project in Palo Alto.
    • Representation of a public restaurant chain in merger with another public restaurant chain.
    • Defense of a Beverly Hills hotel owner in age discrimination class action prosecuted by the EEOC.
    • Representation of national captive insurance group developing risk assessment protocols for general contractors on condo-hotel projects throughout the United States.
    • Advice to national restaurant chain during the 2000 Screen Actors Guild commercials strike and concerning physical guidelines that the restaurant chain was implementing for the several people around the country who portray the restaurant chain's spokesperson at public functions.
    • Numerous representations involving enforcement of major trademark infringement matters.
    • Advice to boards on corporate governance matters.
    • Defense of class action under Americans with Disabilities Act.
    • Regular advice in connection with FTC compliance.
    • Advice in connection with multistate promotions.
    • Regular advice in connection with purchase and sale of single- and multiple-unit franchise operations.
    • Representation of national boutique hotel owner and operator in land-use entitlement matter for restaurant and hospitality project in Los Angeles County.
    • Several arbitrations to enforce and terminate franchise agreements.
    • Representation of due diligence matters for hotel investor for mixed-use projects in Hawaii.
    • Advice in connection with all aspects of brand development and management.
    • Advice in connection with complex, multilevel strategic joint ventures, including co-branding relationships.
    • Advice in connection with strategic use of ESOPs in private companies.
    • Representation of investor in connection with its investment in, and sale of, the 830-key resort in Phoenix, Arizona and Austin, Texas.  In these transactions, representation involved negotiating joint venture agreements, disputes among venturers, hotel management agreement, development agreement, asset management agreement, land acquisition and project disposition agreements and construction financing.
    • Representation of flag hotel chain in connection with various time share and hotel acquisitions, as well as land use entitlement projects.
    • Representation of the owners of approximately 1,500 acres of undeveloped land on the pacific coast of Costa Rica in the land use entitlement and sale of the property for a multi-hotel resort project.
    • Representation of construction lender in connection with the construction loan for hotel developments located in Los Angeles and in Redwood Shores, California, including loan documentation and participation agreements with a consortium of European banks.  We also represented the banks in connection with workout negotiations, and ultimately acquisition in lieu of foreclosure, and then ownership, operation and eventual sale of the hotel.
    • Representation of the owners of a 400+ key downtown Los Angeles hotel in connection with local regulatory matters and potential sale of the hotel.
    • Representation of developer in connection with the financing of a major Cancun Hotel development through a condo-hotel securities offering registered with the US Securities and Exchange Commission.