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Practice/Industry Group Overview
Hospitality
Under Construction and Overextended
The challenging economic, real estate and credit market conditions add up to great risk for those in the hospitality industry. Construction sites are silent; blueprints remain just that; and “go” projects can stop in an instant. This volatile environment, however, offers tremendous opportunities for those with the experience and skill to evaluate, manage, and develop them. That’s where a seasoned legal team that can creatively navigate even the most complicated situations comes in. Creativity and market experience can be the difference between a successful transaction and a failed effort.
We can work it out… literally.
Workouts, loan modifications, and bankruptcies are the primary course of business in the hospitality industry right now, but actions you take today will determine the course of how well you do when the market recovers.
Manatt’s hospitality lawyers have the market knowledge and real world know how necessary to help clients in a stressed industry survive and even thrive. We help our clients get distressed assets off their books, restructure underperformers, and take advantage of deals that may never be seen again.
Since hospitality encompasses more than real estate, we draw upon equally prominent colleagues in closely related practice areas such as construction, intellectual property, employment and labor, litigation, and real estate and land use.
Manatt’s senior-level professionals have extensive experience with loan workouts, partnership and joint venture restructures, repositioning issues, and employee termination issues. As a firm with roots in Southern California, we are known for our experience in resource development and our strong relationships with the California Coastal Commission and other regulatory entities. We are particularly adept at navigating the morass of political approvals and regulatory compliance inherent in these projects. Our clients include domestic and foreign developers, lenders, contractors, insurers, investors, franchisees, investment banks, management companies, owners, operators, REITs, and venture funds.
Manatt in Action
- Manatt was the general outside counsel for Terranea, the 580-room luxury hotel that opened in June 2009 in Rancho Palos Verdes on the coast of Los Angeles County. We worked with the City of Rancho Palos Verdes and the California Coastal Commission to secure approvals, including meeting the Coastal Commission requirements regarding visitor-serving uses for oceanfront properties, and came up with a structure that all government agencies, including the California Department of Real Estate, blessed for the condominium units included within the project.
- Manatt’s hospitality attorneys provided a full suite of resources for the development of the Carneros Inn, a mixed-use project that combined luxury-manufactured homes, commercial retail stores, restaurants, a spa and the hotel. Our attorneys resolved multi-party construction disputes on behalf of the majority owner, ousted the initial developers and completed the project with a series of complex financing, construction, land use and DRE transactions.
- At Estancia La Jolla, we first represented the development team in documenting a ground lease from the University of California for the parcel on which the conference hotel was developed, and then were involved in all aspects of construction, including construction and permanent ground lease financing.
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Services Available
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.
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Clients:
Del Taco, LLC, Hilton Worldwide, Isle of Capri Casinos, Inc., Jamba Juice Company, Kendall-Jackson Wine Estates, Ltd., Lowe Enterprises, Inc., Ronald Family Trust A, the Getty Trust
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