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Donahue Peebles Rose to Prominence in South Florida as the Country's
 First Black Developer of a Major Convention Hotel;
Peebles Says He's Tired of that Distinction
By Douglas Hanks III, The Miami Herald
Knight Ridder/Tribune Business News

July 19, 2004 - Donahue Peebles rose to prominence in South Florida as the country's first black developer of a major convention hotel.

Eight years later, Peebles says he's tired of that distinction.

"One of the things that's taken me aback more than anything else is the tendency of this marketplace to classify people," Peebles said from the ninth-floor suite of offices in Coral Gables of Peebles Atlantic Development. "I'm an 'African-American' developer. My hotel is an 'African-American' hotel. It was race that kind of defined me."

Now Peebles, 44, is turning a page away from the chapters where race served as essential -- or at least relevant -- context to his real estate ventures. And he sees the coming years as a test of South Florida's ability to see a leading black businessman as a leading businessman, period.

His Royal Palm Crowne Plaza, built on a minority set-aside deal, is up and running as the fourth-largest hotel on Miami Beach. His court fight with Broward County over a similar effort to build a black-owned hotel for the county is quietly working its way through the appeals system. And what was to be Peebles' next major project, an oceanfront complex in Riviera Beach, a largely black community in Palm Beach County, fell apart in June.

Meanwhile, Peebles was recently elected to a second term as chairman of the Greater Miami Convention & Visitors Bureau, a tax-funded organization that serves as the leading voice of Miami-Dade County's tourism industry. The Bath Club, his million-dollar-and-up oceanfront condominium project, is nearing completion. And with the Riviera Beach venture dead, Peebles has gone searching for a new luxury condominium project -- a product dominated by affluent whites and Hispanics.

"I'm probably the most high-profile, most recognizable African-American business person," Peebles said. "Is the community prepared to view me as just a business person?"

Peter Roulhac, a longtime bank executive who recently was hired by the Miami-Dade Public Schools to garner corporate support, said he understands why Peebles might feel too identified by his race. But Roulhac, who is black, also questions why Peebles should feel that being black has hindered his business dealings.

"I think, in general, the business community has been very welcome and very accepting" of Peebles, Roulhac said. "What I am a little bit chagrined about, quite frankly, is that after all of these years, he still feels somewhat of an outsider."

In a subsequent interview, Roulhac added: "He shouldn't feel that way."

If Peebles questions how quickly South Florida will drop "African-American" from his title, the coming years will offer their own test for Peebles -- a developer who relishes public attention and who has not shied away from having race inserted into his story line.

"He certainly gets a lot of attention. A lot of it is race driven," said Scott Robins, a commercial developer in Miami Beach who partnered with Peebles in an office-building project. "And he's a self-marketer. He's trying to brand himself. He needs to have the publicity that goes with it."

National media, including The New York Times, tracked Peebles' role as a black developer helping to heal racial tensions in Miami Beach following a 1990 snub of Nelson Mandela by local leaders that led to a three-year tourism boycott.

He bought full-page ads in 1999 describing his Bath Club project as racial progress, noting he was both the developer and the first black member of the social club that also sits on the property. Black Enterprise magazine recently named Peebles Atlantic its Company of the Year, an accolade that came with a six-page profile in the national magazine.

"There are bigger developers than Don that get less attention than he does," said Thomas Ireland, a developer and friend of Peebles. "I think there might be a little bit of jealousy with that."

Peebles says he pursues a high-profile to help bring deals his way, but he also thinks a good portion of his attention comes simply from operating in the public arena. And much of that has brought negative stories and reinforced Peebles' reputation for contentiousness.

The Royal Palm dissolved into a five-year battle with Miami Beach over construction problems on the project, which opened two years late and about $16 million over budget. Peebles blamed the city for not disclosing structural problems with the existing hotel there; the city claimed Peebles hadn't fulfilled his responsibility as the developer. A judge recently ruled against Peebles in his lawsuit against the contractor on the project, ordering Peebles' Royal Palm company to pay $12 million in back fees.

(Last week, Peebles said that only about $1 million of the award is in dispute since his company had held back about $6 million in fees before the lawsuit and won $5 million from its architect in earlier litigation.)

Peebles' effort to build a hotel near the Broward County Convention Center also ended in a fight. The venture never got off the ground, and Peebles sued Broward for $4 million over unpaid fees. A judge ruled against him last year, and Peebles is appealing the decision. A hotel project in Hollywood that Peebles joined for a management fee also ended up in litigation.

"He assiduously courts supporters, but he's also got a no-holds-barred kind of approach toward opposition," said former Miami Beach Mayor Neisen Kasdin, who tangled with Peebles over the Royal Palm project. "If he doesn't get his way, he gets contentious."

Six-foot-three with a wide smile and beaming eyes, Peebles knows how to charm a room, say people who have worked with him. He calls politics one of his specialties, and negotiations have proved a strong point, too.

He outflanked his competition for the Royal Palm deal by persuading the owners of the adjoining Shorecrest hotel to sell to him, knowing Miami Beach wanted that property to be part of the overall project. A city panel had recommended a buyers group that included Hyatt for the Royal Palm bid, but with the Shorecrest in hand, Peebles won out.

He points to those scuffles in the public arena when explaining his reputation for being combative. But he also tracks the label back to his race.

"I think there is a different standard on how I am treated," he said. "And I believe that has a little bit to do with my race, and the fact that it's discussed so prominently in the media."

When he went searching for a construction loan for the Bath Club project, Peebles recalled that he had already sold $100 million worth of condominiums, signed on a leading contractor, Turner Construction, and had secured Credit Suisse First Boston as a financial backer.

Even then, Peebles said, "I'd get feedback that I was too controversial. Somebody had the audacity to ask me about a New Times article that was written about me."

That cover story in the weekly Miami paper was headlined, "Beating Whitey: Developer Donahue Peebles is as handsome, smooth, articulate and nasty as he needs to be."

If that write-up represented the most extreme example of Peebles' public persona being tied to race, it also captured what he sees as a stark difference between his image here and in Washington. Controversy found him in both places, but for different reasons.

Roy Donahue Peebles Jr. was born in Washington in 1960 to a father who worked as a file clerk for the federal government and a mother who worked as a secretary. His grandparents were a mix of races -- part Anglo, part American Indian and part black.

His parents divorced when he was 5, and Peebles, an only child, said he lived a mostly comfortable middle-class life in Detroit and Washington.

In 1978, he enrolled in Rutgers University with the idea of becoming a doctor. But he found the pursuit didn't mesh well with his abilities. One of the problems: Schmoozing people wouldn't get him ahead.

"I picked medicine because my uncle was a role model of mine, and he was a physician. And I wanted the prestige of being a doctor," he said. "I would have been a good doctor, but I felt my skills would be better suited for business or law."

After a year of college, the 19-year-old Peebles returned home to Washington and went to work as a real estate agent and for his mother's appraisal business. But he would follow his mother, Yvonne Poole, into another pursuit, too.

Poole was active in politics, and Peebles met many of the city's up-and-comers during receptions in his living room. He worked as a congressional page as a teenager and volunteered for candidates in municipal elections.

But his big break came in 1982 when Marion Barry, seeking a second term as mayor, faced a challenge by former Housing and Urban Development Secretary Pat Harris. Barry beat her in the Democratic primary and Peebles, then a nobody in his early 20s, promptly held a fundraiser for him.

His guest list: every business executive on record donating at least $500 to Harris. "The hotel had to bring in other tables" to accommodate the spill-over crowd that filled the hotel ballroom that day, Peebles recalled.

Suddenly in favor with the Barry administration, Peebles lobbied for an appointment to the city's powerful tax-appeals board and was granted a seat on the panel. A year later, Barry named a 24-year-old Peebles as the board's chairman, its youngest in history.

The appointment launched both Peebles' trajectory as a rising star in Washington's formidable commercial real estate industry, as well as his close relationship with Barry, the man who would later be nicknamed "Mayor for Life."

His friendship with Barry, a man old enough to be his father, brought scrutiny as the mayor's late-night outings and rumors of Barry's drug use spilled into newspaper articles focusing on the mayor's inner circle. Peebles vacationed with Barry in the Bahamas and often lent the mayor an apartment to use for hours at a time.

Peebles now admits he was trying to help the married Barry stay out of trouble.

"I told him if he was going to see somebody who wasn't his wife, he shouldn't be using a hotel," Peebles said. "I wasn't married. I was young. Probably my moral threshold wasn't where it should be."

But when Barry was arrested for smoking crack cocaine in a hotel room in 1990, Peebles said he was shocked by the drug use. He said he didn't think any politician at his level of power would be so reckless.

Barry returned to power in 1994, and by then, Peebles had translated his time on the tax board into a lucrative consulting business arguing his clients' cases before the board for lower assessments. He had also begun amassing a roster of office buildings and commercial projects that would establish him as one of the city's top developers.

At his peak, Peebles controlled one million square feet of commercial space, most of it offices in downtown Washington. In 1997, he was the first to open a speculative office building (one not built for a specific tenant) since the recession in the early 1990s.

Many of his projects involved leases with the city, including a $48 million deal that fell apart in 1995 after the city council raised questions about the propriety of the arrangement. Peebles said the episode helped sour him on Washington politics and convince him that his Barry connections actually hindered him from getting government contracts.

But looking back, he also sees the setback as the mirror image of the criticism he's faced in South Florida. If detractors in Washington saw Peebles as too close to power, here they dismiss him as too quick to fight.

"I was perceived locally in D.C. as a tremendous insider. As an insider in government," Peebles said. "Here, I've been more of an outsider bucking the trend a little bit."

Not that Peebles hasn't applied his political expertise to the South Florida establishment, too. He helped raise campaign funds for Alex Penelas' Miami-Dade mayoral races (though not his U.S. Senate run) and for Miami Beach Mayor David Dermer. He's also a loyal supporter of Gov. Jeb Bush and helped finance the Republican operation during the 2000 recount.

But the chairmanship of the Visitors Bureau has thrust Peebles into his first real leadership role in South Florida. He lists three items on his agenda: a stronger summer season, more family visitors, and a long-term contract with Miami Beach.

The last goal is the diciest, since the Beach has questioned whether its $4.7 million payment to the Bureau is money well spent. Negotiations on a new Beach contract, which expires in September, continue.

"He has had to deal with some very sensitive political situations," said Stu Blumberg, head of the Greater Miami & the Beaches Hotel Association and a board member of the bureau. "His expertise has proven invaluable."

The Bureau job has also put Peebles in the center of the action in the way the tax board did in Washington 20 years ago.

"He utilizes these committees, these high-profile commissions," said Robert Pincus, the retired chief executive of a Washington-area bank later bought by BB&T. "Don uses his profile to his benefit. He's extremely calculating with respect to that. He leverages it to help in these various projects."

"He exudes success," Pincus said. "As a result of that, he raises equity."

Peebles also describes his pursuit of a high profile as establishing an asset he couldn't tap into as a young man starting out: an inherited reputation.

"In Royal Palm, I competed against the Pritzker family and Hyatt and Wyndham. We were competing against second- and third-generation businesses," he said.

Should his 10-year-old son, Roy Donahue Peebles III, pursue a real estate career, Peebles said he wants his son's name to matter more than his race.

"He would be judged as a business person. It would be a whole different perspective," Peebles said. "You wouldn't have to explain who you are."

-----To see more of The Miami Herald -- including its homes, jobs, cars and other classified listings -- or to subscribe to the newspaper, go to http://www.herald.com.

(c) 2004, The Miami Herald. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

 
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