United States: West Coast Real Estate Update: May 18, 2016

Susan Booth, Karl Lott and Douglas Praw are Partners in Holland & Knight's Los Angeles office
Ashley Jason and Paul Park are Associates in Holland & Knight's Los Angeles office
Geoffrey Geddes is a Public Finance Project Manager in Holland & Knight's Los Angeles office

Stacie Goeddel and Robert Haight Jr. are Partners in Holland & Knight's San Francisco office

California Adopts ADA Relief for Small Businesses

Gov. Jerry Brown signed California Senate Bill 269 into law on May 10, 2016, providing some limited relief to small businesses that are sued for violations of the Americans with Disabilities Act (ADA) and other disability access laws. By creating a rebuttable presumption that certain technical violations do not cause a plaintiff to experience difficulty, discomfort or embarrassment if specified conditions are met, the defendant will be able to avoid liability for minimum statutory damages.

If the defendant is a "small business" (i.e., it has employed 25 or fewer employees and has average annual gross receipts of less than $3.5 million over the previous three years), and if the defendant corrects the violations within 15 days after service of a summons and complaint or receipt of written notice, the following "technical violations" are presumed not to cause a person difficulty, discomfort or embarrassment: 

  1. interior signs other than directional signs or signs that identify the location of accessible elements, facilities or features, when not all such elements, facilities or features are accessible
  2. the lack of exterior signs, other than parking signs and directional signs, including signs that indicate the location of accessible pathways or entrance and exit doors, when not all pathways, entrance and exit doors are accessible
  3. the order in which parking signs are placed or the exact location or wording of parking signs, provided that the parking signs are clearly visible and indicate the location of accessible parking and van-accessible parking
  4. the color of parking signs, provided that the color of the background contrasts with the color of the information on the sign
  5. the color of parking lot striping, provided that it exists and provides sufficient contrast with the surface upon which it is applied to be reasonably visible
  6. faded, chipped, damaged or deteriorated paint in otherwise fully compliant parking spaces and passenger access aisles in parking lots, provided that it indicates the required dimensions of a parking space or access aisle in a manner that is reasonably visible
  7. the presence or condition of detectable warning surfaces on ramps, except where the ramp is part of a pedestrian path of travel that intersects with a vehicular lane or other hazardous area

In addition, if the alleged violation was noted in a report by a certified access specialist (CASp), a defendant with 50 or fewer employees will not be liable for minimum statutory damages if the claim was filed within 120 days after the date of the inspection and the defendant corrects the violations within such 120-day period, and certain other conditions are met.

Mall REITs Remain Cautiously Optimistic Despite Continued Store Closings

Since the recession ended in 2009, "big box" anchor stores have been shuttering their poorest performers and downsizing others in order to complete with the juggernaut popularity of online shopping. That trend has continued in 2016, as evidenced by recent announcements by Sears, Sports Authority and PacSun of upcoming closings.

Notwithstanding the continued wave of closures, however, RBC Capital Markets recently reported that most of the shopping center Real Estate Investment Trusts (REITs) it manages continue to meet or exceed projections in terms of growth, occupancy and leasing spreads. According to some observers, one reason for the continued profitability of these REITs is their management's acknowledgment and accommodation of the trend away from big box stores in favor of grocery stores, discount clothing stores and pharmacies.

Despite the continued profitability of shopping centers and malls, many analysts recommend that investors remain cautiously optimistic as the country's shopping landscape continues to evolve.

Expo Line Extension Opens This Week

The Expo Line's 6.6-mile, light-rail extension opens on Friday, May 20. The $1.5 billion project will finish the Expo Line route so that the full 15.5-mile line will connect downtown Los Angeles to downtown Santa Monica. There will be celebrations at five of the seven new stations on May 21 between 10 a.m. and 4 p.m., as well as a celebration at the Culver City Station that has been open for several years.

The new stations celebrating are:

  • Downtown Santa Monica
  • 17th Street/Santa Monica College
  • 26th Street/Bergamot
  • Expo/Bundy
  • Palms

Along with those celebrating, the two other new stations are Westwood/Rancho Park and Expo/Sepulveda. We will continue to update the status of the Expo Line and report on its success (and hopefully very few failures). This is a big moment for transportation in LA.

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