Andrew Robins, co-chair of Akerman’s Hospitality Sector Team, wrote an article for Lodging explaining the steps that project sponsors should consider when committing to a mixed-use development.
Robins recommends clear communication among all parties early in the process of the development, “In any mixed-use project, it is important to establish from the start exactly who or what exerts control over a variety of important issues, which typically include project design and development functions; determination of development standards; project operations, including operating and maintenance standards—both at the level of a single project component and at the level of the entire project; implementation of maintenance standards; the allocation of maintenance costs; and the ability to enforce operating standards.”
He further elaborated, “One of the primary subjects of dispute within mixed-use projects is the allocation of post-opening capital expenditures and operating costs. Proper project design must include a detailed assessment of all the physical and operational aspects of the project that benefit each stakeholder and provide metrics for an appropriate allocation of these costs. Creating the template for appropriate cost allocations is essential, and it must be documented in a manner that will support the developer/hotel owner in the event of a challenge.”