News for the Hospitality Executive
|By Nicole White, The Miami Herald
Knight Ridder/Tribune Business News
Oct. 27, 2002 - The Royal Palm Crowne Plaza hotel, the nation's first black-owned convention-style hotel, opened with much fanfare in May.
But Miami Beach officials say owner Donahue Peebles has failed to pay some $240,000 in rent since the hotel, on 15th Street and Collins Avenue, opened. The city says Peebles owes $1.3 million in back rent and sales taxes.
Peebles disputes the numbers presented by the City Commission and says it is the commission, not he, who has failed to honor the partnership they entered into more than six years ago to get the hotel built.
"These numbers are a laughing stock; it's a joke. You guys should be outraged that these issues have been going on for so many years." Peebles said.
"This is an unusual position for a tenant to take . . . You're operating and not paying," City Commissioner Saul Gross said.
The commission voted 5-2 to continue talks with Peebles through next month in hopes of reaching an agreement on the payments.
Although both sides have been in talks since January, they've been unable to solve their differences. If the matter is not solved by November, both parties will be free to pursue legal or other courses of action, the commission said.
Building a black-owned hotel in Miami Beach was the cornerstone of a 20-point plan that ended a 1,000-day black tourist boycott in 1993.
The boycott, triggered when county officials snubbed former South African President Nelson Mandela, is estimated to have cost the county between $50 million and $100 million in lost business.
Peebles has long maintained that Miami Beach, which was a partner in the deal to build the hotel with a $10 million loan, should share in the extra cost that turned a $60 million project into an $80 million one by giving him a credit reducing his annual payments to the city.
Peebles said the city misled him about the condition of the old Royal Palm hotel on the site, then required him to tear it down and build an exact replica.
Peebles acknowledged that he paid rent totaling $123,000 from September 2000 to October 2001 but did so under protest.
He said he stopped making payments because the city, despite six years of negotiations, has failed to settle claims that they owe him $800,000 related to environmental contamination at the hotel.
Gross said he asked that the matter be discussed because he has never heard of a tenant who would not pay rent.
City Manager Jorge Gonzalez told the commission he would continue talks: "I think we all have our own interest in getting this thing past us."
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(c) 2002, The Miami Herald. Distributed by Knight Ridder/Tribune Business News. SXC,