Does Local Law 50 Hold Hotel Owners Hostage?
In a recent article for the New York Law Journal, Todd E. Soloway, Chair of Pryor Cashman’s Hotel + Hospitality Group, together with partner William Charron and associate Meghan Hill, discuss the merits of Local Law 50, a recent regulation that imposes restrictions on a hotel owner's ability to put hotel properties to their highest and best use.
Local Law 50, informally known as NYC’s Hotel Conversion Moratorium of 2015 (as extended via a 2017 amendment), effected certain restrictions on the conversion of hotel to ‘non-hotel’ uses, but according to Soloway, Charron and Hill, "holds hotel owners hostage" from using their properties as they best see fit. Essentially, the law prohibits owners of hotels with more than 150 rooms from converting more than 20 percent of those rooms to other uses—including condominiums.
Local Law 50 also contains a provision by which individual hotel
applicants can apply for a ‘hardship waiver,’ on a showing that inability to convert more than 20 percent of their rooms is causing a significant detriment. The inclusion of the waiver appears to be a facade designed to backstop challenges that the law is unconstitutional on its face.
Should a proper hotel plaintiff pursue relief from Local Law 50, the question will be whether a regulatory taking has occurred— meaning that the government acting in a regulatory capacity effectively deprives a property owner of their property.
For the full article, please click here.
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