The Prince of South Beach: R. Donahue Peebles has built a real estate empire with the posh and a pipeline of deals in South Florida. And he's not finished yet

Black Enterprise, June, 2004 by Allan Hughes

There was a reason for the set-aside. Several years earlier, prominent local attorneys H.T. Smith and Marilyn Holifield led a tourism boycott by African Americans, claiming city officials had snubbed South African leader Nelson Mandela when he visited because the former political prisoner made positive remarks about Cuban President Fidel Castro. Miami is home to the largest Cuban population in the U.S. This made the city, which was segregated until the mid 60s, a hotbed for political and social unrest.

As part of the 1993 settlement to end the boycott, which gained national attention when the NAACP got involved, Miami Beach agreed to underwrite the development of a black-owned luxury hotel by putting up a long-term $10 million loan to acquire the property. But the deal stalled after four local African American would-be developers, known as the HCF Group, won the original bid but failed to secure additional financing for the estimated $60 million project. "Ultimately, in spite of H.T. Smith and other community leaders [urging] the city commission to reach a deal with HFC, the city commission terminated negotiations," recalls Peebles.

A MARRIAGE OF BUSINESS AND POLITICS

Though an outsider to the dynamics of politics and business in Miami Beach, Peebles understood the importance of utilizing the former to benefit the latter. Exposed to real estate at an early age by his mother, a real estate agent who later launched a brokerage firm, Peebles was a page on Capitol Hill for former Rep. Bon Dellums (D-Calif.) and Rep. John Conyers (D-Mich.) while in high school during the late '70s. After a brief stint in the premed program at Rutgers University in Newark, New Jersey, he decided he wanted to go into business for himself. Peebles returned to Washington and worked as a real estate sales agent and appraiser.

In the early '80s, Peebles was also a fundraiser and supporter of then-Mayor Marion Barry's reelection campaign and was named to the city's property tax appeals board, becoming its chairman at the age of 24. During that time, Peebles became a player in terms of political fundraising and then started a real estate appraisal business. But he really wanted to be a developer and own buildings. He got his opportunity in 1986, when the then-26-year-old entrepreneur closed on his first property, a vacant development site on which he built a 100,000-square-foot office building, with a project budget of $9 million. By 1989, he'd left the city's tax appeals board to focus on his private enterprise.

So, when the Royal Palm deal came along, Peebles was familiar with both the real estate business and the politics of public/private partnerships. Even more important, he gained control of the Shorecrest hotel, which would become a pivotal part of sealing the deal. When the city of Miami Beach issued its request for proposal for the Royal Palm, it was conditional on the development of the adjacent Shorecrest property. However, the city had earmarked $10 million to acquire both properties and used $5.5 million of those funds to acquire the Royal Palm, leaving insufficient funds in the budget to meet the $5.5 million asking price for the Shorecrest. Peebles' acquisition of Shorecrest turned out to be highly strategic, because any competing bids for acquiring and developing the Royal Palm had to include that property.