Sutherland lawyers represent hotel and resort developers, owners, operators, franchisors and lenders in projects throughout the U.S. and around the world. Our experience covers multiple practice areas and gives us the ability to deal with a broad array of issues and projects across the hospitality industry.
Hotel Development
- Partnerships and Joint Ventures
Sutherland attorneys have structured partnerships and joint ventures to meet the business goals of owners, developers and operators of a wide variety of hotel and resort properties. We have the experience to assure compliance with the complicated tax rules that govern the allocation of partnership profits and losses while also assuring that the economic bargain struck by the parties is properly documented and preserved.
We have recently organized joint ventures for the development of major projects costing in excess of one billion dollars, including joint ventures for development and ownership of hotel and resort properties such as the InterContinental San Diego, the InterContinental San Francisco (Moscone West), the Royal Palm Crowne Plaza in Miami Beach and the InterContinental Cayo Largo Resort in Puerto Rico. We also recently represented a major life insurance and financial services company in a programmatic joint venture with a major private development group to construct destination hotels in core markets, as stand-alone projects of the venture or as co-investments with other parties.
Sutherland has long been known as one of the leading tax law firms in the United States. More than 80 of our lawyers focus on tax law and the structuring of tax-sensitive transactions. Our tax experience is valuable in hotel and resort development since we are often able to provide immediate advice on what deal structures are possible. In addition, we frequently alert clients to tax issues involved in equipment leasing, equity participation financing, ground leases and the uniform capitalization rules for self-constructed property.
- Hotel and Resort Construction
We represent hotel developers in connection with construction contracts and construction management agreements. Our experience in this arena includes agreements for the InterContinental San Francisco (Moscone West), the Royal Palm Crowne Plaza in Miami Beach and the InterContinental Cayo Largo Resort in Puerto Rico. We have also negotiated architectural contracts, interior design agreements and agreements for the renovation and procurement of furniture, fixtures and equipment for major hotel projects such as the Westin Diplomat Resort and Country Club in Hollywood, Florida, the Mark Hopkins InterContinental in San Francisco and the InterContinental Chicago.
We represent a number of developers, owners and operators of mixed-use hotel projects, particularly in the resort and convention contexts. Recent engagements include Santa Barbara Plantation in the development of a 350-room Hyatt golf and mixed-use resort in Curacao, Kiawah Development Partners in the planned development of a luxury mixed-use resort in St. Kitts, and Cap Cana, S.A. in its development of a major multi-hotel, mixed-use resort in the Dominican Republic.
Hotel Finance
We represent developers, investors and public/private partnerships in the financing of hotels, resorts and convention facilities. On the lender side, we have represented several major players such as Teachers Insurance and Annuity Association of America, Metropolitan Life Insurance Company, Wachovia Bank, CapMark Services, SunTrust Mortgage Co., John Hancock Mutual Life Insurance Company, Colonial Bank, UBS Realty Investors, The Travelers Insurance Company and Capmark Finance Inc. Our experience gives us the ability to deal with special hotel industry concerns that often delay financing transactions. From many complex financings, we have amassed a knowledge base of forms and solutions to expedite issues that arise in:
Loans secured by hotels require special terms and conditions, especially those relating to the lender’s security interest in accounts, personalty and proceeds from operations.
The terms of hotel management agreements are important to lenders for two basic reasons. First, prudent underwriting requires a comprehensive review of the rights and obligations of the owner and the hotel manager with respect to hotel operations. Second, the lender must consider the possibility that it may become the owner.
- Tri-Party, Inter-Creditor and Cooperation Agreements
Hotel financing transactions frequently involve several parties, including the owner, the hotel operator and holders of subordinate or priority debt instruments, as well as the construction lender, if a construction loan is in place. Thus, it is common to negotiate extensive agreements governing the rights of the various parties in the event of a foreclosure, the occurrence of defaults under the management agreement, or the exercise of remedies by one of several competing lenders.
Management and Franchise Agreements
In representing both owners and operators in the negotiation of management and/or franchise agreements, our experience enables us to anticipate the styles, preferences and requirements of the leading hotel chains. Our lawyers are among the country’s most experienced in managing the legal and business issues in franchise and management agreements, including agreements involving brands such as InterContinental, Hilton, Hyatt, Marriott, Ritz-Carlton, Mandarin Oriental, Four Seasons, “1” Hotels & Residences, Baccarat Hotels & Residences, Candlewood Suites, Doubletree, Hampton Inns, Sheraton, Westin and Wyndham International.
Hotel Acquisitions and Dispositions
We have substantial experience in representing buyers and sellers of hotels and resorts in U.S. markets and abroad. Recent representations include TIAA-CREF in its sale of its hotel portfolio to Starwood, and InterContinental Hotels Group in its acquisitions and dispositions of the former Ritz-Carlton on Central Park South, the Crowne Plaza at the United Nations, and the InterContinental San Juan Resort and Casino in Isla Verde, Puerto Rico.
Litigation
Our experience enables Sutherland clients to avoid the most common disputes in the industry and to resolve disagreements when they do arise. On behalf of developers, owners and operators of hotel properties, we draft agreements that prevent problems and protect their interests in areas that include:
Our lawyers are experienced in the resolution of construction disputes through mediation, arbitration and litigation.
We are regularly called on to resolve disputes between owners and operators of hotels. The disputes often involve performance issues under management contracts and whether the owner has a right to terminate. In connection with the termination of the management contract for a major resort hotel, we successfully represented the right of an owner to oust an operator through non-violent, self-help remedies.
We are nationally recognized for our work in tax litigation. While we seek to avoid litigation of tax controversies unless there is no other means of adequately protecting our clients' interests, our lawyers are experienced in every facet of tax litigation, from trials in the U.S. Tax Court, district courts or the Court of Federal Claims to arguments before the U.S. Supreme Court. Our experience includes corporate, tax accounting, international and insurance tax cases, as well as cases involving individuals and tax-exempt organizations.
We have one of the nation's premier practices in franchise litigation, with a focus on many industries.
Bankruptcy and Creditors' Rights
The possibility of bankruptcy or serious performance difficulties is in the back of everyone’s mind in the negotiation of hotel financings and management agreements. Having dealt with troubled properties in many settings, we are effectively able to counsel on agreements that minimize the risks on both sides and provide a path for seeing the project through difficulties should they occur. Our business restructuring and bankruptcy group consists of approximately 20 lawyers who represent both debtors and creditors. Our experience includes termination of franchise and management agreements, foreclosure proceedings, interim management pending foreclosure, sales-free and clear-of-liens issues, perfection of the right to receive hotel revenues and profits, post-petition financing, preferences and fraudulent conveyances and plan confirmation issues.
Energy and Environmental Issues
The hospitality industry has increasingly focused on energy and environmental issues inherent in the design, development and operations phases of a project. More than 60 of our attorneys work with energy industry clients in domestic and international business transactions and litigation, including clients involved in hotel and resort development and operation.
© 2008 Sutherland