Duff on Hospitality Law

Yesterday, PCMA and MPI presented their 11th Annual Industry Summit here in Seattle at the Washington State Convention Center in Seattle. I had the pleasure of participating at this always well-attended event and spoke on current trends in the world of group contracts. If you would like a copy of my presentation, please use this link: Group Sales Contracts: Current Trends and Interesting Case Studies.

Congratulations to Summit co-host Cathy Mason for another terrific event. I look forward to seeing everyone at next year’s Summit.

At lunch time, Joy Ellis can be found at Addy’s Sandwich Bar, a food cart at the corner of SW 10^th and Alder. Here, she brings us an update on the thriving food cart industry in Portland.

Portland’s bustling food cart industry has come of age. With nearly 700 food carts actively dishing out some of Portland’s most creative and tasty cheap eats, the local food cart economy here is flourishing. Portland’s food cart industry has also helped build some thriving ancillary businesses, from food cart suppliers to sustainable to-go food containers to bicycle delivery services like Portland Pedal Power.

Food carts are generally a flexible, low-risk business model. They give an aspiring entrepreneur the opportunity to incubate a business idea and gather a following before taking the financial leap to a bricks-and-mortar restaurant, and they provide an affordable investment for business owners who prefer to stay small and avoid the risks and costs inherent in a storefront restaurant. 

The City of Portland is generally supportive of food carts, which pepper urban surface parking lots and occupy vacant lots and other underutilized sites. Portland’s regulations are relatively friendly (unlike some other cities, like New Orleans – where a food truck can’t park in the French Quarter, sell seafood, stay in one place for longer than 30 minutes or be parked near a restaurant). The various permits and licenses required of a Portland food cart vendor depend upon the size of the cart, its mobility, and its location (on private property or a public sidewalk). 

In May 2012, we blogged that the Hospitality Industry is on the road to recovery and Metro, Portland’s regional governing body, was once again considering an Oregon Convention Center (OCC) hotel. On September 13, 2012, Metro approved a proposal by local developers to construct a Hyatt Regency Hotel. The full development team consists of Mortenson Development, Mortenson Construction, Hyatt Hotels Corporation, ESG Architects, Ankrom Moisan Architects, Piper Jaffray & Co., Jones Lang LaSalle Hotels and Star Terra LLC/Schlesinger Companies.

The Mortenson team proposed four development options, two options for the StarTerra, LLC property (directly north of the OCC) and two options for the PDC-owned site (directly east of the OCC). For each site, Mortenson proposed two different development programs achieving approximately 600 rooms. The development program options include: 1) a 600-room Hyatt Regency or 2) a combination 420+/-room Hyatt Regency and 181-room Hyatt Place. Metro favored the Mortenson team because this team has extensive hotel development and financing experience. Further, Metro recognized that Hyatt currently does not have a strong presence in the Portland market and a Hyatt Regency hotel could serve national convention clients at the convention center as well as introduce new corporate Hyatt-based group business in Portland.

While the majority of hotel owners and operators rely on well-established cable companies and suppliers of in-room entertainment systems, this post serves as an important reminder of the need to ensure that these traditional providers of video programming do everything necessary to comply with the many laws and regulations that apply to the provision of video programming.

In the parlance of the Federal Communications Commission (FCC), a hotel that makes multiple channels of video programming available to its guests and customers is called a “non-cable multichannel video programming distributor” or “MVPD.” Typically, a non-cable MVPD does not cross a public right-of-way to deliver video programming.

While this type of video system may not meet the definition of a cable television system under the FCC’s rules, it is nonetheless subject to many of the same restrictions and requirements as a cable television operator. In fact, the FCC just recently issued a formal citation to a hotel located in Orange County, California, for violating the FCC’s rules. In addition, the FCC issued a Public Notice reminding all non-cable MVPDs of their obligations under the FCC’s rules.

• • The first obligation is to file a Notification on FCC Form 321 that the operator intends to operate on frequencies between 108 and 137 MHz and between 225 and 400 MHz – frequencies that correspond with cable channels 14-16, 25-53 and 98-99.  These frequencies are also used for aeronautical communications.
  • Because these systems have the potential to cause harmful interference to aeronautical communications, with potentially life-threatening results, the second obligation is to measure the systems on a regular basis to ensure that there is no excess “signal leakage.”  If there is, then the non-cable MVPD must suspend operations and fix the problem.  The most common cause for such “signal leakage” tends to be operators who seek to improve the signal within their facilities by “over-powering” the system or fail to properly maintain their systems (e.g. bare wires).
  • Except for certain small systems, operators must file with the FCC annual measurement reports (on Form 320).  In addition, operators must retain, for a period of two years, logs showing the date and location of each leakage source, the date of repair, and the probable cause of the leakage.

Remember when Facebook was just for college kids? Well, things have changed. These days it seems like even giant companies are using social media to show their warm and fuzzy sides and to connect with customers. Obviously, the CEOs of these companies are not spending their time maintaining the accounts and posting clever comments. On the contrary, companies usually dedicate one or more employees to speak on behalf of the company, through a company-sponsored Facebook, Twitter, or other social media account. If done right, an account can build up thousands of followers and grow to host useful information, photos, or communications, becoming an important resource for customers. 

But what happens if the employee who is running a company-sponsored account quits? In a perfect world, that employee would gladly relinquish control of the account back to the company. But what if the employee leaves on bad terms? What if the employee leaves for a rival company? What if the employee changes the password and starts posting negative comments, confidential information, or trade secrets? Sorry to get all lawyer-y, but these are the questions that keep me up nights.