News for the Hospitality Executive
|By Charles Savage, The Miami Herald
Knight Ridder/Tribune Business News
Jul. 27--R. Donahue Peebles' bid to build Broward's first major minority-owned hotel is dead.
Peebles' latest business partner, Wyndham International, has backed out of its deal with the controversial black developer, leaving no other major chain in a position to invest in and manage the hotel.
"This is not a negotiation ploy," Peebles said. "Enough of this nonsense. I do not intend to go back to that again."
The county must now scramble to find a new developer who can complete the hotel next to the Broward County Convention Center by November 2003, so it can house already-booked groups in its expanded convention center.
Meanwhile, Peebles said Thursday he will expect the county to pay his expenses, which he now estimates at $3 million to $4 million. In March, he put the figure at $2 million.
Litigation is likely.
Blame flew thick and fast Thursday, after the Dallas-based corporation sent a letter to Peebles terminating the partnership. "The negotiations with the County have been extremely frustrating," wrote Wyndham chief investment officer Joseph Champ.
A marathon July 10 County Commission meeting ended with agreement among Wyndham, Peebles and the county on all but two points in the proposed agreement. Those points -- a $4-a-night room surcharge and details of the management contract -- forced Wyndham back to its board of directors for approval.
Adding to the confusion, Peebles said, the written lease amendment received by his company last week contained several changes from what was agreed to at the meeting, including revisions to the terms of future sale, should he or Wyndham sell their interests in the project.
But when he and Wyndham tried to contact County Attorney Ed Dion and his assistant Noel Pfeffer, Peebles said, they learned both would be on vacation until after the July 27 deadline and no one else had authority to change the document.
Dion forwarded to commissioners a letter from Peebles' Holland & Knight attorneys, informing Broward that Wyndham had decided it was not interested in pursuing the deal and calling the board's behavior "commercially unreasonable."
In a cover letter, Dion responded: "This office is disappointed in the alleged reasons for Wyndham's withdrawal, many of which we do not believe are well founded."
Earlier, state NAACP leaders raised the possibility of retaliation if the deal with Peebles fell through.
On Thursday, Fort Lauderdale NAACP president William McCormick said he wants to learn more about the failed deal before placing blame.
"It was rumored we would have some sanctions, but we have a process we have to go through first," he said. "We have to do a lot of fact-finding, and that's not up to the branch itself. That's up to the national NAACP. If you ask someone to put economic sanctions against a town, we want to make sure we're doing the right thing."
Some of Peebles' staunchest supporters and critics on the commission, including Josephus Eggelletion and John Rodstrom, were out of town Thursday when the word arrived. But several key swing voters agreed they would not proceed with Peebles and called for a search for a replacement developer.
Exactly how that search will be conducted is unclear.
Commissioner Ben Graber noted that four years ago, the county actually chose the National Baptist Convention to build the hotel and that Peebles "inherited" it when it backed out. He said the ultimate source of the problems was that Peebles lacked the financial means to build the hotel and wanted the county to shoulder all the risks.
"I'm not surprised," Graber said. "It was not a good deal. I can't see an organization like Wyndham sticking its neck out on a deal because their partner [Peebles] was shaky. . . . This was just their way to back out."
Commissioners Lori Parrish and Ilene Lieberman, past Peebles' supporters, also said the deal is now over and it's time to find a new developer.
Parrish said the only reason she had gone along with this last chance was because Wyndham had offered to contribute $25 million.
"We all gave it a valiant try," she said. "There comes a point of time to fold them, and unfortunately that time has come. We all tried our very best, but unfortunately unless he pulls a rabbit out of the hat -- holding $25 million -- I'm out."
Andy Ingraham, the local leader of Al Sharpton's National Action Network -- who said months ago that he has a deal with Peebles to contract for public relations work for the developer's Royal Palm Hotel project due to open on South Beach in two months -- blamed the commission for the outcome.
"It's an unfortunate ending to what could have been a historic victory for the minority community in this county," he said.
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(c) 2001, The Miami Herald. Distributed by Knight Ridder/Tribune Business News.