May 20, 2004 -

U.S. District Judge Ted Bandstra found RDP Royal Palm Hotel responsible for the extra two years it took to finish the 422-room complex, a delay that led to a protracted battle between the city of Miami Beach and R. Donahue Peebles, the RDP principal who led the development.

Peebles blamed the problems on ground contamination, structural problems on part of an existing hotel the city ordered him to preserve and other issues he said were largely Miami Beach's responsibility.

In lawsuits, RDP Royal Palm also blamed contractors, architects and engineers for delays. The contractors, including lead builder Clark Construction, said the delays were the developer's responsibility.

"How were we supposed to finish on time when we were supposed to be remodeling a building we ended up tearing down?" Sid Jordan, a Clark division president, said in an interview.

Peebles had agreed to preserve the original Royal Palm Hotel but had to demolish the entire structure once engineers declared the historic building unsalvageable. The delays pushed the original $30 million price tag on the project well beyond $40 million, Jordan said.

Jordan said the construction drawings were also faulty, contributing to delays. Miami's Arquitectonica, architect of the project, agreed to pay Peebles's firm $4.7 million under a settlement over problems with the drawings, according to Bandstra's ruling.

Arquitectonica blamed the dispute on an engineering firm that later became embroiled in a scandal over faulty work on the Dadeland Station shopping center. An Arquitectonica spokesman could not be reached for comment late Wednesday afternoon, and the firm's lawyer declined to comment.

Peebles lawyer Stuart Hoffman said Peebles did not dispute many of the judge's findings and that the Arquitectonica and Miami Beach settlements would cover most of the damages Bandstra awarded. Clark would receive about $6 million under the order, with McCugh Concrete Construction receiving $4.4 million and two other subcontractors receiving less than $1 million each.

Peebles and the city plan to finalize a settlement of their dispute next month, including at least two years of free rent on the city-owned land and the option to convert one of the two buildings to a hotel condominium, said Peebles lawyer Stuart Hoffman. Peebles still must pay 20 percent of the hotel's revenues to Miami Beach.

Peebles is expected to appeal the verdict. Miami Beach had hoped to recoup some of its settlement with him with proceeds from the suit, which he had brought against the contractors.

The contractors and Peebles are likely to negotiate over a settlement to avoid an appeal, said Raymond Robinson, a Miami lawyer for Talmac, a mason subcontractor which was awarded $770,000.

-----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. IHG,