Relationships matter.

Seems obvious, but not always understood. However, this past week Scott Kadish, Alex Conn and I experienced firsthand the importance of this simple principle.

Last week we attended the ICSC U.S. Shopping Center Law Conference in San Antonio, Texas. For 4 days we attended educational sessions (we actually led the discussion in 2 of those), visited with clients and colleagues, renewed friendships and made new ones. There were about 1,350 attendees at this conference, the programming was terrific, and opportunities were abundant.

Clients and lawyers with whom we may only have an electronic connection for most of the year were suddenly and delightfully in the same physical place as us for 4 or 5 days. It was during this face-to-face time that I realized how important it is to actually know our clients and the folks who sit across the table from me the rest of the year. Continue Reading Relationships Matter

“Street Food” has generally referred to prepared food items ready for immediate consumption sold on the street or in a public space from a food cart, food truck or similar moveable station. The connotation was cheaper fast food.

Today, “street food” is a unique, trendy selling point. There is Piada Italian Street Food that brands its entire restaurant chain this way. It’s the same with Tortilla Mexican Street Food in Columbus, Ohio. At Blue Agave in Springdale, Ohio, a local Mexican Restaurant that I frequent, they have Street Tacos on the menu. Quan Hapa in Over-the-Rhine in Cincinnati advertises itself as Asian Street Food. The whole notion of street food has changed to a more favorable connotation. It is nostalgic, bringing together the idea of unique, freshly-cooked food served in a social setting.

Fast food too has evolved with the idea of “fast casual”. This is a whole new category between fast food and casual dining. It seems “fast food” still has a poor connotation for quality, making it appear that the move toward “street food” or “fast casual” may just be a way to avoid being labelled “fast food”. Whatever the ‘label’, I have to say I love Piada, Tortillas, Blue Agave, Quan Hapa, and eating at food trucks. But I also love The Waffle House, so maybe you have to consider the source.

World Famous Las Vegas Nevada. Vegas Strip Entrance Sign in 80s Vintage Color Grading. United States of America.

I just returned from the National Restaurant Association Financial Officers and Tax Executives Conference in Las Vegas. I participated on a Real Estate Leasing Trends panel with Adam Schwegman, head of the eat/drink department of General Growth Properties and George Galloway of Next Realty Mid-Atlantic, with Ryan Cupersmith of Ernst & Young as our moderator. While there, I was able to soak in some knowledge myself. Here are some of the highlights of what I learned:

  1. Restaurants may be the new anchor in retail developments. A center has to provide an “experience” to motivate consumers to shop at the center as opposed to sitting home and buying over the internet. Restaurants have become a great way to create an experience and draw customers in.
  1. Restaurants are immune to internet competition. Last time I checked, you can’t buy a prepared meal over the internet that comes with a server and clean-up crew, so restaurants appear to be safe from internet competition, at least for now.

Continue Reading ‘Lease’ Vegas

It has an urban, industrial feel. It has a live DJ. It has a festive atmosphere. It has a patio. And, in addition, to the tacos, gorditas, crunch wraps and chulapas that you’ve come to love and expect, it has beer!Taco Bell Cantina

It’s the new Taco Bell Cantina which opened today at 200 Euclid Avenue on Public Square in downtown Cleveland. Lines stretched out the door at opening time today but service was provided smoothly and quickly by the friendly and outgoing employees.

Situated in the long vacant Cadillac Ranch space in the old May Company building, Cleveland’s Taco Bell Cantina joins other Cantina restaurants operated by Taco Bell in San Francisco, Austin, Chicago and on the Las Vegas strip.

The first Taco Bell Cantina opened in Chicago’s Wicker Park Neighborhood in September 2015. Less than a dozen currently exist and only five other Taco Bell Cantinas serve alcohol. Continue Reading Ulmer Client, Taco Bell, Opens Cantina in Downtown Cleveland

I have previously commented about the similarity in service between a restaurant and law firm (see prior blog). One area where restaurants differ from other businesses is the issues presented in a retail lease.

For Lease Sign in window

A restaurant lease involves unique issues which must/should be dealt with, some more monetarily significant than others. But don’t underestimate the annoyance factor. If any of these issues are not dealt with appropriately, you can bet someone will be more than a little annoyed.

  1. Impact Fees – Because restaurants are typically big water consumers, new build locations may charge a significant tap-in fee. In some cases, there may be various impact fees. Depending on leverage, a restaurant may be able to get the landlord to pay this as part of its development costs. But even if the landlord will not pay the fee, the restaurant needs to know the exact amount of the fee so that it can correctly prepare its budget.
  1. Trash Removal – There are many different ways a landlord can charge for trash removal. Does the restaurant have its own dedicated dumpster? Does the landlord mark up the bill? Is there a choice on who to use as the hauler? I have heard of landlords going to a weight-based system where a tenant gets billed for actual disposal, but have not actually seen one in place. In any event, these details need to be determined before the lease is signed.

Continue Reading A Restaurant Lease is a Unique Dish

Scott KadishI am a commercial leasing attorney at a large firm. I have developed a decent stable of loyal clients, but not because I am the smartest attorney in the world. I like to think I’m smart, but I would be less than honest if I said that my success is due to being the smartest guy in the room. No, I believe my success is attributable to my client service. I know I have done my job when a client asks if they are my only client. So what is good service? It is not merely returning phone calls or emails. It is going above and beyond expectations. And who is the client? It should not just be the ultimate consumer, but everyone you work with and for. So it is not just the CEO of the company for whom you are providing services, it is the secretary or administrative assistant at the company, it is every other employee at that company with whom you may interact, and it is your superiors at your own company.

I waited tables to help pay for college. As a waiter, my income was 100% dependent on providing good service. And that meant not just bringing the meal, but like an attorney going above and beyond expectations. In many ways, everything I really need to know about client service I learned from being a waiter. Continue Reading All I Really Need to Know About Client Service I Learned in a Restaurant

Lovett_43_background_RGB

I just thought everyone should know that the federal historic tax credits are in clear jeopardy of being repealed as part of the Trump administration’s approach to tax reform policy. Speaker of the House Paul Ryan’s “Better Way Blueprint,” which specifically repeals the historic tax credits is currently in the House Ways and Means committee for consideration.

If you are reading this blog, you are probably a supporter of the historic tax credit. As a refresher, here are just a few reminders of the positive aspects of historic tax credits many developers and neighborhoods stand to lose out on if the credits are eliminated under new tax policy:

  1. Historic preservation is key to urban revitalization and Cleveland is a prime example of that.
  2. It is a huge job creator; nationally it has created 2.3 million jobs.
  3. It improves the housing stock in much needed neighborhoods.
  4. It pays for itself. Of the 23.1 billion dollars in credits there have been 28.1 billion dollars in tax revenue created.

Continue Reading CALL TO ACTION!

Lovett_43_background_RGBSo I don’t know about you, but every time I turn on NPR lately there is some discussion about President Trump’s conflict of interest because of his Washington D.C. Hotel built in the former U.S. Post Office with a ground lease from the GSA. For those of you who do not spend your days analyzing ground leases, I thought it might be helpful to know what they are and why anyone would want one.

In short, ground leases are a method of transferring most of a property owner’s interest in a piece of real estate to a tenant while allowing the property owner to retain a residual interest, and therefore some control, in the real estate. Ground leases typically have lengthy terms (75-99 years) and often include renewal options.

With a ground lease, the real estate owner gets a steady stream of income from the lease payments, which are usually based upon the value of the real estate plus interest amortized over the term of the lease. If the tenant defaults, the landlord gets the property back (usually after very generous cure periods). At the end of the term of the lease, the real estate and the improvements go back to the property owner. There are often covenants in the lease that require the developer/tenant to complete the intended project.

The advantage of a ground lease to the developer/tenant is that they “pay for” the land over the term of the lease rather than up front. The tenant ends up with all other ownership rights and obligations for the term of the lease. Sometimes, as I imagine is the case in President Trump’s deal with the GSA, it may be the only way that the developer can have access to the real estate. The GSA may have to go through a process to determine that it will never need this real estate in the future.  Once the GSA determines that it does not need the real estate, the GSA would then need to take competitive bids on the sale. This process would make it difficult to strike a deal with any one particular developer.

I hope you have enjoyed your ground lease lesson for the day….

I’ve been thinking a lot about that word lately. Change. I get it that change is constant and to be successful you need to embrace change. That doesn’t mean we should just accept changes that are bad. No, I think it means that we need to accept that change is inevitable and be ready to respond to change with a positive attitude, which may include working in opposition to changes that are perceived as bad or negative and putting yourself in position to capitalize when that negative change has run its course and dissipated.

Introspectively, Winston Churchill said, “To improve is to change; to be perfect is to change often.” I have recently made a big change in my professional life. I was elected to be Managing Partner of Ulmer & Berne and so a good portion of each day now involves attending to the duties of a Managing Partner instead of drafting and negotiating retail leases. I still plan to devote a significant amount of time to my leasing activities, but clearly my job description has changed. Unfortunately, being Managing Partner reminds me every day just how imperfect I am.

The business of law firms is clearly changing. There is increased competition for good work. There is pressure to keep rates down. Technology has increased the pressure to work 24/7 and respond immediately. At the same time, professionals want more time away from work. No self- respecting attorney can easily embrace these developments, but we all need to adopt strategies to address these issues with a positive attitude.  At Ulmer, these strategies include: (1) differentiating ourselves through fanatical, user friendly client service; (2) focusing on project management as a way to economically staff assignments; (3) maintaining a collegial, supportive work environment free from internal competition to maximize the benefits of a team approach; (4) pushing management down to the practice group level where those on the front line can quickly and effectively manage our practice; (5) promoting diversity in the firm to create a better work environment and appeal to a wider array of clients; and (6) implementing a growth strategy to add similarly minded folks.

To be sure, more change is coming. Multi-disciplinary firms, technology changes and legal regulation changes will all change how we will need to do business. By retaining our culture and front-line management, we should be positioned to respond accordingly with a positive attitude.

On a personal level, I need to improve (i.e., change). I need to listen better – to pay more attention to what others are saying (and not day dreaming about the Red Sox’ need for better starting pitching) and not interrupt others because I think I know better (you know you have issues with that – and all attorneys do to one degree or another – when a partner says you are doing a good job but you really need to stop cutting everyone off). Someone once said “envision the period,” meaning wait until they have finished what they are saying before you respond. I need to be clearer in my communications and not just assume everyone understands my short-handed jargon. I need to exude a positive attitude even if my dog ran away, my car broke down, or a tree fell on my house. I need to be able to admit a mistake and be able to change my mind.  I used to think if you don’t agree with me it’s just because you haven’t been listening close enough.  I have repeatedly learned that I am not the smartest one in the room – we have some really good attorneys here, but I am pretty good at drinking beer – no that’s a song that’s stuck in my head, sorry – I am pretty good at bringing people together. And I think I can capitalize on that ability if I listen better and understand my partners’ needs, attitudes, and abilities.

Anyway, all I can control is my attitude and effort. And I’m going to give it my best shot.

 

Allen Klein said that humor cannot change a situation, but it can change your attitude about it.

I am working on a lease where I represent a restaurant tenant against a well-known, national REIT landlord. Needless to say, the landlord’s form lease is crazy-long and overly one sided, and the landlord is not very flexible. Faced with that situation, it is easy to develop a bad attitude.  So when I got the landlord’s response to my comments (all of my comments were of course absolutely necessary just to get the lease in a reasonably fair condition), or should I say rejection of my comments, I started getting irritable.

But then halfway through the lease, I saw the landlord’s attorney had inserted a provision requiring our client to provide free wine to the landlord’s attorney as a way to resolve a certain issue. I laughed out loud and some of my irritation with the attorney went away. Then, in response to my question as to how trash is handled at this center, the attorney said, “with gloves – it’s kind of gross.” That too made me laugh out loud. I started thinking I might even like this attorney.

In all seriousness, his humor did change my attitude. I saw where I might have been disagreeable merely because of the situation, as opposed to focusing on the actual substantive issue and its relative importance to our client. The fact is that the attorney’s humor made me more receptive to his position. And it made a difficult negotiation more enjoyable.

I like to joke, but my family tells me I have a propensity for telling bad jokes and a bad joke is worse than no joke. In fact, I’m not even kidding when I tell you that when he was 11 years old my oldest son (he’s now 28) wrote a school project describing me and said I will joke around or be serious, and if I tell a joke it might even be a funny joke. Now that’s funny!