Tag Archives: Strouss & Salmon

Paul J. Valentine

Jennings, Strouss & Salmon adds Paul J. Valentine

Jennings, Strouss & Salmon, a leading Phoenix-based law firm, announced that Paul J. Valentine has joined the firm as an associate in the Tax Law department.

“The varied experience Paul has earned in the tax field over the past four years makes him an excellent addition to the tax group,” stated Rich Smith, Chair of the Tax Law department at Jennings, Strouss & Salmon. “In particular, his experience in the area of tax controversy, on both federal and state levels, allows the firm to expand its services in these areas.”

Valentine focuses his practice in the area of Taxation Law. He earned his LL.M. in Taxation from
New York University School of Law, his J.D. from American University Washington College of Law, and a B.S. from Leeds University. Prior to joining Jennings, Strouss & Salmon, Mr. Valentine was a Tax and Bankruptcy junior partner at Arboleda Brechner, where he managed clients’ tax collection and controversy matters.

“Joining Jennings Strouss & Salmon presented a fantastic opportunity to be a part of a strong and dynamic tax practice,” stated Paul Valentine. “Although the firm represents clients throughout the United States, its solid reputation in Arizona and commitment to Arizona’s businesses was extremely attractive to me. I am looking forward to working with the other members of the tax law team to help meet our client’s business needs.”

123rf.com, tatiana53

Op-Ed: Read this before locking out a commercial tenant

Garrett Olexa, used with permission from Jennings Strauss. *Garrett Olexa is a member with the law firm of Jennings, Strouss & Salmon, PLC. He practices in the areas of real estate and commercial litigation.  Mr. Olexa can be contacted at golexa@jsslaw.com or 623.878.2222.

Garrett Olexa is a member with the law firm of Jennings, Strouss & Salmon, PLC. He practices in the areas of real estate and commercial litigation. Olexa can be contacted at golexa@jsslaw.com or 623.878.2222. Photo used with permission from Jennings, Strouss & Salmon, PLC

Most commercial landlords and property managers are aware that, in Arizona, if a commercial property tenant neglects or refuses to pay rent and is in arrears for more than five days, or if a tenant violates another provision of the lease, under certain conditions and circumstances, Arizona law allows the landlord the option to reenter and retake possession of the premises, seize personal property belonging to the tenant, and, after a statutory allotted time period and proper notice, publicly auction the tenant’s property to pay the unpaid rent. What they may not be aware of is the number of potential pitfalls associated with taking such actions.

The following are questions commercial landlords should consider and discuss with an attorney knowledgeable in the laws that govern lock-outs to determine whether it is a possibility and the best option for their situation.

1. What does the lease say?

If the lease contains language that would prohibit a lockout, then it is not an option. Also, if the lease requires the landlord to provide written notice to the tenant before there can be a default or breach of the lease, a lockout is only an option if the written notice has been properly delivered and the time to respond to the notice and cure a potential default has expired.

2. Is the tenant five days in arrears on the payment of rent, or has there been a material default under the lease by the tenant aside from late rent?

These questions are significant because a lockout cannot be performed until (i) the rent has been unpaid for five days past the date it was due or (ii) the tenant has violated another significant provision of the lease. The landlord should also consider whether the tenant has a valid argument that the failure to pay rent or alleged material default was prompted by the landlord’s own failure to comply with a term of the lease. Keep in mind, – a breach by the landlord may excuse a tenant from having to comply with certain lease obligations, and if the landlord has breached the lease and then taken the tenant’s property, the landlord could be exposed to a claim for conversion.

3. Have you allowed the tenant extra time to pay the rent?

If a landlord promises the tenant extra time to get caught up on the rent, the landlord should avoid retaking possession of the premises until the extension expires.

4.  Have you routinely accepted late rent payments or led the tenant to believe timely payments would not be required?

If a landlord has regularly accepted late rent payments from tenants, additional steps may need to be taken before a lockout can occur. Such conduct may also determine whether the lockout is a reasonable option.

5. Can the lockout be performed without any of the tenants, employees, or representatives present?

A landlord cannot retake possession while someone is inside the building.

6. Can a lockout be accomplished without breaching the peace?

If entering the property will result in a breach of the peace, the lockout cannot be performed. If a breach of the peace occurs during a lockout, then the lockout needs to be terminated.

7. Is the personal property on the premises owned by the tenant? Will selling such property bring sufficient proceeds to cover past due rent? Are there risks associated with selling or disposing of personal property on the premises?

If the personal property is not owned by the tenant, it cannot be sold by a landlord. Also, the landlord will want to consider whether the personal property is worth enough to cover the rent owed and auction costs. A landlord should also consult with an attorney concerning potential liabilities associated with disposing of certain personal property (e.g. computers that contain protected personal information of the tenant’s customers).

8. Have you conducted a UCC lien search?
A landlord’s possessory lien will not take priority over another creditor that perfected a lien on the personal property before it was brought into the leased space. Thus, a UCC lien search should be conducted before deciding whether repossession makes sense.

9. Will a lockout put the tenant out of business and, if so, is that in your best interest?
Locking out a tenant and taking possession of its equipment may cause a tenant to lose its customers and force it to close its doors permanently. If the tenant is under a long-term lease and has simply fallen behind on one month’s rent due to a cash flow issue, a lockout is probably not going to be in a landlord’s best interest.

10.  Is there a personal guaranty and do the guarantors have money?
If a personal guaranty on the lease was obtained, and the guarantors are believed to have sufficient assets, filing suit on the personal guaranty and getting a money judgment against the guarantors may prove to be a better course of action than going through the time-consuming and uncertain process of seizing and selling the tenant’s assets. The suit can also include a request for a court order requiring the tenant to turn over the premises.

In short, while lockouts can be a valuable tool to a commercial landlord, they are also ripe with potential problems if not executed properly. Therefore, it is recommended that landlords consult an attorney familiar with commercial lockouts before engaging in the process.

legal

Jennings, Strouss & Salmon Expands to Yuma

Jennings, Strouss & Salmon, PLC (Jennings Strouss), a leading Phoenix-based law firm, announced the opening of its Yuma office to serve the growing legal needs of Yuma and Imperial counties. The firm’s Yuma location will provide clients with the full range of personal and business legal services, including agribusiness law, business and finance law, estate planning, health care law, labor and employment law, and real estate law.

Shanna Bowman Orlich and Wayne A. Smith will be the primary attorneys at the Jennings Strouss Yuma office. Shanna has deep roots in Yuma and a strong background in agriculture. Orlich has been involved in the business and legal aspects of both of her father’s agribusinesses, BSN Farms and Coronation Peak Ranches, Inc.

“I’m very excited to serve my hometown,” stated Orlich. “This is a tremendous opportunity to give back to my community and offer legal services that are directly beneficial to and customized to meet the unique and diverse needs of business owners and families in Yuma and Imperial Counties. Our Yuma office will have the firm’s full support and resources, which includes a network of 65 attorneys.”

Orlich focuses her practice in the areas of agricultural law, commercial and financial transactions, business operations, planning and formation, and real estate. She also has experience in commercial and probate litigation. Orlich attended Columbia University, where she earned her juris doctorate degree and master’s degree in business administration. She earned a bachelor of science in industrial engineering from Arizona State University.

Wayne Smith also has a strong background in agriculture and continues to run his family’s cattle ranch today. Smith focuses on issues related to agribusiness and agricultural compliance with federal and state programs, water law, real estate (including 1031 exchange and reverse exchange), federal and state income and estate taxation, business and estate planning, and partnership, corporation and limited liability company formation and compliance. Smith earned a bachelor of science in mechanical engineering from New Mexico State University, a juris doctorate degree from the University of New Mexico School of Law, and a master’s of law degree in taxation from the University of Missouri-Kansas City School of Law.

Jennings Strouss is committed to supporting the numerous business, civic and industry organizations that are dedicated to the growth of Yuma and Imperial Counties. The firm is a member of the Greater Yuma Economic Development Corporation and the Yuma County Chamber of Commerce.

The opening of the Yuma office marks the fourth location for Jennings Strouss, with offices also located in Phoenix and Peoria, Ariz., and Washington, D.C.

The Yuma office is located in historic downtown Yuma, Ariz at 256 S. 2nd Ave., Suite C.

legal

Jennings, Strouss & Salmon Expands to Yuma

Jennings, Strouss & Salmon, PLC (Jennings Strouss), a leading Phoenix-based law firm, announced the opening of its Yuma office to serve the growing legal needs of Yuma and Imperial counties. The firm’s Yuma location will provide clients with the full range of personal and business legal services, including agribusiness law, business and finance law, estate planning, health care law, labor and employment law, and real estate law.

Shanna Bowman Orlich and Wayne A. Smith will be the primary attorneys at the Jennings Strouss Yuma office. Shanna has deep roots in Yuma and a strong background in agriculture. Orlich has been involved in the business and legal aspects of both of her father’s agribusinesses, BSN Farms and Coronation Peak Ranches, Inc.

“I’m very excited to serve my hometown,” stated Orlich. “This is a tremendous opportunity to give back to my community and offer legal services that are directly beneficial to and customized to meet the unique and diverse needs of business owners and families in Yuma and Imperial Counties. Our Yuma office will have the firm’s full support and resources, which includes a network of 65 attorneys.”

Orlich focuses her practice in the areas of agricultural law, commercial and financial transactions, business operations, planning and formation, and real estate. She also has experience in commercial and probate litigation. Orlich attended Columbia University, where she earned her juris doctorate degree and master’s degree in business administration. She earned a bachelor of science in industrial engineering from Arizona State University.

Wayne Smith also has a strong background in agriculture and continues to run his family’s cattle ranch today. Smith focuses on issues related to agribusiness and agricultural compliance with federal and state programs, water law, real estate (including 1031 exchange and reverse exchange), federal and state income and estate taxation, business and estate planning, and partnership, corporation and limited liability company formation and compliance. Smith earned a bachelor of science in mechanical engineering from New Mexico State University, a juris doctorate degree from the University of New Mexico School of Law, and a master’s of law degree in taxation from the University of Missouri-Kansas City School of Law.

Jennings Strouss is committed to supporting the numerous business, civic and industry organizations that are dedicated to the growth of Yuma and Imperial Counties. The firm is a member of the Greater Yuma Economic Development Corporation and the Yuma County Chamber of Commerce.

The opening of the Yuma office marks the fourth location for Jennings Strouss, with offices also located in Phoenix and Peoria, Ariz., and Washington, D.C.

The Yuma office is located in historic downtown Yuma, Ariz at 256 S. 2nd Ave., Suite C.

mediator

2012 Mediation Guide

Arizona Business Magazine used its own research and referenced professional ratings and rankings of law professionals to determine the legal professionals who made the 2012 Mediation Guide. Arizona Business Magazine has used its best efforts in assembling material for this list, but does not warrant that the information contained herein is a complete or exhaustive list of the top alternative dispute resolution attorneys in Arizona, and hereby disclaims any liability to any person for any loss or damage caused by errors or omissions herein.

All attorneys are listed in alphabetical order.

AMY ABDO
Fennemore Craig
3003 N. Central Ave., #2600, Phoenix, AZ 85012-2913
602-916-5399
fclaw.com
Abdo has extensive experience in arbitration, mediation, investigations, administrative proceedings and litigation, including bench and jury trials.

KEVIN T. AHERN
Broening Oberg Woods & Wilson, P.C.
1122 E. Jefferson St., Phoenix, AZ 85034
602-271-7781
bowwlaw.com
Ahern’s practice is confined to mediations, neutral case evaluations, arbitrations, special master appointments and consultation in his areas of practice experience — real estate, commercial enterprises, title insurers, escrow agencies, insurance agencies, lenders, and property managers.

SHAWN K. AIKEN
Aiken Schenk Hawkins & Ricciardi
4742 N. 24th St., Phoenix, AZ 85016
602-248-8203
ashrlaw.com
Aiken devotes a substantial portion of his practice to mediation and arbitration, and was selected by Best Lawyers in America as Lawyer of the Year, 2012 (Mediation, Phoenix).

REBECCA ALBRECHT
Bowman and Brooke, LLP
2901 N. Central Ave., #1600, Phoenix, AZ 85012
602-643-2300
bowmanandbrooke.com
A former Superior Court judge, Albrecht incorporates her vast experience and skills to her practice, which includes arbitration and mediation. Albrecht is an American Arbitration Association (AAA) certified arbitrator.

GERALD W. ALSTON, FREDERICK M. CUMMINS, DOUGLAS G. ZIMMERMAN
Jennings, Strouss & Salmon
1 E. Washington St., #1900, Phoenix, AZ 85004-2554
602-262-5911
jsslaw.com
Alston serves as both an arbitrator and a mediator in all areas of civil litigation, including domestic relations, eminent domain, and matters involving real estate and contract disputes. Cummins has extensive trial experience in the areas of health care and is an experienced arbitrator and mediator. Zimmerman is a certified mediator by The Institute for Conflict Management, LLC and completed the Advanced Negotiation Skills Program at the Harvard Law School Negotiation Insight Initiative.

CHRISTIAN C.M. BEAMS
Ryley Carlock & Applewhite
One N. Central Ave., #1200, Phoenix, AZ 85004-4417
602-258-7701
rcalaw.com
Beams is an accomplished neutral who has resolved countless disputes through the mediation and arbitration processes. He is diligent in his efforts to bring matters to resolution, as evidenced by his high success rate in doing so.

MAUREEN BEYERS
Osborn Maledon, P.A.
2929 N. Central Ave., Phoenix, AZ 85012
602-640-9305
omlaw.com
Beyers has served as an arbitrator and a mediator in hundreds of arbitrations on a variety of business disputes, and is a member of the American Arbitration Association’s specialized panels, including its Large and Complex Case Panel, and Franchise, Securities and Real Estate Panels.

STEVEN N. BERGER, DAVID. W. ENGELMAN
Engelman Berger, P.C.
3636 N. Central Ave., Phoenix, AZ 85012
602-271-9090
engelmanberger.com
Berger and Engelman offer the facilitation of the resolution of disputes through practical and cost-effective mediation. Berger concentrates his practice on assisting business owners, lenders, lessors, and other parties in resolving commercial disputes, with an emphasis on matters pending in the U.S. Bankruptcy Court or involving troubled loans or troubled businesses.

GARY L. BIRNBAUM, RICHARD A. FRIELANDER, AND MICHAEL S. RUBIN
Mariscal, Weeks, McIntyre & Friedlander
2901 N. Central Ave., #200, Phoenix, AZ 85012
602-285-5000
mwmf.com
Five of the fi rm’s senior lawyers are actively and continuously involved in alternative dispute resolution, including acting as arbitrators, mediators and neutral case evaluators in Arizona and throughout the Southwest.

DENISE M. BLOMMEL
7272 E. Indian School Rd., #206, Scottsdale, AZ 85251
480-425-7272
azlaborlaw.com
Blommel has more than 28 years of experience as an employment and labor law attorney, 15 years as a practicing mediator, including seven years serving as a contract mediator for the U.S. Postal Service.

BONNIE L. BOODEN
101 N. First Ave., #2080, Phoenix, AZ 85003
602-252-4880
bonnieboodenlaw.com
Booden offers mediation as another means to resolve the issues that arise out of the dissolution of a marriage.

BRICE BUEHLER
212 E. Bethany Home Rd., Phoenix, AZ 85012-1229
602-234-1212
bricebuehler.com
Since 1987, Buehler has mediated or arbitrated more than 2,500 disputes. Buehler’s experience includes corporate, commercial, partnership, bodily injury and wrongful death, professional (medical, dental, and legal) malpractice, construction, environmental, and probate disputes.

JOHN R. DACEY, MICHAEL R. KING, RICHARD K. MAHRLE
Gammage & Burnham
2 N. Central Ave., 15th Floor, Phoenix, AZ 85004
602-256-0566
gblaw.com
As part of Gammage & Burnham’s practice, several attorneys are available to serve as mediators or arbitrators in employment, construction, general, commercial and other litigation matters.

DAVID J. DAMRON
2415 E. Camelback Rd., #700, Phoenix, AZ 85016
602-476-1836
damronadr.com
Damron specializes in alternative dispute resolution including mediation, settlement conferences and arbitration.

FRANKLIN D. “TROY” DODGE
Ryan Rapp & Underwood
3200 N. Central Ave., #1600, Phoenix, AZ 85012
602-280-1000
rrulaw.com
Dodge’s practice has an emphasis in the area of commercial contract and real estate, and arbitration and mediation.

PAUL F. ECKSTEIN
Perkins Coie
2901 N. Central Ave., #2000, Phoenix, AZ 85012-2788
602-351-8000
perkinscoie.com
Eckstein’s practice is focused on civil litigation and he also frequently serves as a mediator and arbitrator.

MICHELE M. FEENEY
6525 N. Central, Ave., Phoenix, AZ 85012
602-682-7513
mmflaw.com
Devoting her practice to mediation, arbitration and alternative dispute resolution, Feeney has litigated cases in the areas of medical malpractice, wrongful death, personal injury and other tort litigation.

LAWRENCE H. FLEISCHMAN
The Fleischman Law Firm
2850 N. Swan Rd., #120, Tucson, AZ 85712
520-326-6400
fladr.com
Fleischman created the fi rst Center for Dispute Resolution in the Arizona Superior Court system, saving litigants and taxpayers millions of dollars each year. To date, he has mediated more than 6,000 cases for clients.

SHERMAN D. FOGEL
2850 E. Camelback Rd., #200, Phoenix, AZ 85016
602-264-3330
shermanfogel.com
Fogel is a full-service conflict management and dispute resolution professional, providing mediation, arbitration and facilitation services.

RICHARD N. GOLDSMITH
Lewis and Roca
40 N. Central Ave., #1900, Phoenix, AZ 85004
602-262-5341
lrlaw.com
Goldsmith mediates commercial disputes and has extensive experience handling matters related to Articles 2 and 9 of the Uniform Commercial Code, commercial and real estate lending and leasing, and loan documentation.

BRIAN MICHAEL GOODWIN
Polsinelli Shughart
1 E. Washington St., #1200, Phoenix, AZ 85004
602-650-2001
polsinelli.com
Goodwin is a professionally trained mediator and served as a judge pro tempore with the Maricopa County Superior Court from 1982-2005.

ALONA GOTTFRIED, JARED SIMMONS
Simmons & Gottfried, PLLC
8160 E. Butherus Dr., #7, Scottsdale, AZ 85260
480-998-1500
sglawaz.com
Specialties include family matters, commercial and business issues, employment disputes, and real estate matters.

J. ALEX GRIMSLEY
Bryan Cave LLP
2 N. Central Ave., #2200, Phoenix, AZ 85004-4406
602-364-7117
bryancave.com
Grimsley has represented a variety of domestic and foreign companies in international arbitrations.

STEVEN S. GUY, REBECCA A. WINTERSCHEIDT
Snell & Willmer
400 E. Van Buren St., #1900, Phoenix, AZ 85004-2202
602-382-6000
swlaw.com
Guy’s practice includes mediation and arbitration of litigated disputes. Winterscheidt serves as an arbitrator of employment disputes for the American Arbitration Association.

WILLIAM HAUG, CHAD SCHEXNAYDER
Jennings, Haug & Cunningham
2800 N. Central Ave., #1800, Phoenix, AZ 85004
602-234-7800
jhc-law.com
ADR attorneys at Jennings, Haug & Cunningham represent businesses, agencies and individuals involved in business disputes.

MICHAEL W. HERZOG
The Herzog Law Firm, P.C.
14350 N. 87th St., #180, Scottsdale, AZ 85260
480-264-0842
herzogfirm.com
Herzog is a certified specialist in injury and wrongful death litigation and his practice includes arbitration and mediation.

MARC KALISH
3219 E. Camelback Rd., Phoenix, AZ 85018
602-956-3608
arizonamediator.com
Since receiving formal mediation training in 1995, Kalish has devoted his law practice almost exclusively to providing alternative dispute resolution services as both an arbitrator and mediator.

MARK E. LASSITER
Davis Miles
80 E. Rio Salado Pkwy., #401, Tempe, AZ 85281
480-733-6800
Lassiter has an “AV Preeminent” rating by the Martindale-Hubbell Peer Review Ratings system, which connotes the highest possible rating in both legal ability and ethical standards and is head of dispute resolution department.

AMY L. LIEBERMAN, DONNA WILLIAMS
Insight Employment Mediation
8149 N. 87th Pl., Scottsdale, AZ 85258
480-246-3366
insightemployment.com
Lieberman’s practice is focused on the prevention and resolution of workplace and business conflict. She mediates primarily employment and commercial matters.

MERTON E. MARKS
2575 E. Camelback Road, #450, Phoenix, AZ 85016
480-544-4324
mertonemarks.com
Marks is a nationally known arbitrator and mediator of commercial disputes involving insurance, reinsurance, securities and product liability. He is an arbitrator for the AAA on its commercial, reinsurance and large complex case panels and is a mediator on the AAA mediation panel.

BRUCE E. MEYERSON
LaSota & Peters
722 E. Osborn Rd., #100, Phoenix, AZ 85014
602-248-2900
lasotapeters.com
Meyerson is a mediator, arbitrator, and trainer. From 1990 through 2000, Meyerson practiced commercial and employment litigation with Meyer, Hendricks, Victor, Osborn & Maledon, and Steptoe & Johnson.

ROBERT J. MILLIGAN
Milligan Lawless Taylor Murphy & Bailey, P.C.
4647 N. 32nd St., #185, Phoenix, AZ 85018
602-792-3500
mltmblaw.com
Milligan specializes in health care law and mediation of litigated cases and pre-litigation disputes.

LEAH PALLIN-HILL
Mediation and Arbitration Services, PLLC
2375 E. Camelback Rd., #500, Phoenix, AZ 85016-3489
602-387-5323
leahpallinhill.com
Pallin-Hill offers ADR for general civil matters, including commercial disputes, construction, condemnation, employment, family, malpractice, elder abuse/nursing homes, personal injury, probate, and real estate.

DAVID W. REES
4771 E. Camp Lowell Dr., Tucson, AZ 85712
520-327-7775
thereeslawfirm.com
Rees offers services as a mediator, services as an arbitrator or represents individuals who wish to have matters resolved through means other than a civil trial.

SUSAN M. ROBBINS
Cooley & Robbins, LLC
10211 W. Thunderbird Blvd., #201, Sun City, AZ 85351
623-977-1900
azprobatelaw.com
Robbins is a member of the State Bar Alternative Dispute Resolution Section and is also a member of the Association for Conflict Resolution. She is active in the area of mediation and disputes and contested matter in elder law.

DAVID L. ROSE, SHARON B. SHIVELY, DAVID C. TIERNEY
Sacks Tierney
4250 N. Drinkwater Blvd., 4th Floor, Scottsdale, AZ 85251-3693
480-425-2600
sackstierney.com
In addition to serving on some of the AAA’s most sought-after arbitration panels, Sacks Tierney attorneys regularly appear as advocates in arbitrations (or mediations) under AAA rules, or in State Court arbitrations convened under an arbitration agreement.

ROBERT A. ROYAL
Tiffany & Bosco
2525 E. Camelback Rd., Phoenix, AZ 85016-9240
602-255-6011
tblaw.com
Royal’s practice emphasizes intra-corporate dispute and director, officer and manager liability issues.

IRA M. SCHWARTZ
DeConcini McDonald Yetwin & Lacy, P.C.
7310 N. 16th St., #330, Phoenix, AZ 85020
602-282-0500
deconcinimcdonald.com
Schwartz actively serves as a mediator and arbitrator of intellectual property disputes.

STEPHEN H. SCOTT, CHRISTOPHER M. SKELLY
Scott & Skelly
1313 E. Osborn Rd., #120, Phoenix, AZ 85014
602-277-8228
scottandskelly.com
Scott is a former judge on the Arizona Superior Court who now serves full-time as a mediator, arbitrator, appraisal umpire and discovery master. Skelly has conducted thousands of mediations in virtually every kind of civil case.

BRIAN E. SMITH
Brian Smith Mediation & Arbitration
550 W. Baseline Rd., #102-240, Mesa, AZ 85210
480-507-8895
bsmed-arb.com
Brian has established himself as a proven mediator, adept at impartially assisting and guiding parties to effectively facilitate their self-determined mutual decision making which is the cornerstone of the mediation process.

THOMAS L. TOONE
Beer & Toone, P.C.
76 E. Mitchell Dr., Phoenix, AZ 85012-2330
602-263-0900
beer-toone.com
Toone has served as settlement judge, arbitrator or mediator in more than 2,100 cases in Maricopa County.

MARK D. ZUKOWSKI
Jones, Skelton and Hochuli, P.L.C.
2901 N. Central Ave., #800, Phoenix, AZ 85012
602-263-1759
jshfirm.com
Zukowski is a construction and commercial arbitrator and mediator for the AAA. Mark also serves as a private arbitrator and mediator and as a settlement conference Judge Pro Tem for the Maricopa County Superior Court.

Arizona Business Magazine March/April 2012

Medical Facilities, AZRE May/June 2008

Pin-Point Site: Acquiring Good Sites For Medical Facilities

The growth Phoenix has had in recent years equates to growth in the medical needs of its population. In turn, a greater number of medical facilities are needed within a broader area. The large inner city hospitals and satellite clinics that dominated healthcare for so long are no longer adequate to meet all of our healthcare needs, not because of a lack in quality of care, but because of proximity to the patient.

Sooner or later an organization that provides medical care must acquire a site to better serve the patient population base. The selection, evaluation and acquisition of a new site is unique, more complicated and more likely to run afoul than other non-medical site acquisitions if all of the issues are not identified and addressed before the site is acquired. The following are a few of the issues that a medical care provider must consider before closing on the purchase of a site.

The Contract:

The contract to purchase the site must be carefully negotiated. In the case of medical care facilities, there are at least two issues of particular note: (i) the due diligence period must be long enough to accommodate multiple inquiries and analysis well beyond even the most complex transactions; (ii) if the medical care facility is part of a larger complex, or the seller owns other adjoining property, a set of deed restrictions against the seller’s property should limit or prohibit other competitive medical care providers or incompatible uses of the adjoining property, and the provider should be entitled to enforce the restrictions.

Zoning:

The first step is ensuring that the zoning permits medical care, including the type of medical care, procedures and patients that will be at the facility. The zoning should be comprehensive and there should be no requirement for a special-use permit or further governmental action.

Rezoning Contingency:

If a rezoning special-use permit is required, the contract should provide for an adequate period of time for the medical care provider to acquire the approval or otherwise terminate the contract.

Title Review:

Title should not preclude the variety of activities incidental to medical care, typically involving noise, radiation hazards and environmental and waste materials, which are all commonly prohibited.

Parking:

Medical care facilities require substantial parking. The adequacy and proximity of parking should be confirmed as part of the zoning, any deed restrictions and as a practical matter. There should be the ability to park undercover and immediately adjoin the facility.

Governmental Incentives:

The medical care provider should look at several sites in several different jurisdictions. Most jurisdictions are seeking a greater core for their constituents and some may have the flexibility to offer incentives to induce the provider to locate within its boundaries.

Developer Incentives:

Private developers with a large development may see a medical care facility as a highly desirable amenity to the project. They have an opportunity to seed the development and will grant substantial concessions in price, location, access, infrastructure and signage, just to name a few.

Utility, Other Needs and Incentives:

Larger medical facilities also can require substantial and reliable utility needs. The utilities may be willing, particularly in conjunction with a developer and governmental jurisdiction, to upgrade services from the entire grid by construction of additional substations, wells or plant capacity to meet the needs of the facility.

Specialty Uses:

Some medical care facilities present unique issues, in particular drug abuse/half-way houses or full-care psychiatric facilities. The problem most commonly encountered is finding a location that has the proper zoning and no other restrictions on what would be viewed by neighboring properties as highly undesirable. The provider does not want to acquire a site that requires the approval of what would be certain opposition.

Expansion:

Ultimately, the provider has to look far enough into the future to ensure that it has acquired, or has an option to acquire, a right of first refusal that will give the provider a measure of comfort that, if the need arises, it can still expand and provide centralized service for an extended time. This is not just a question of the amount of land, but the adequacy of the utilities and all other issues revisited as well.

Looking Ahead:

The most valuable part of the process is looking ahead and anticipating to the extent possible what healthcare will look like in the future and determine that there are no constraints to meet those needs.

For more information about Jennings, Strouss & Salmon and acquiring sites for medical facilities, visit jsslaw.com.

Bruce B. May is a real estate lawyer with Jennings, Strouss & Salmon’s Phoenix office. He represents national, regional and local developers, homebuilders, and institutional and individual investors involved in all phases of the investment and development process. He can be reached at 602-262-5923 or Bmay@jsslaw.com.

AZRE Magazine May/June 2008