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R Donahue Peebles

August 4, 2002

A Hotel Helps Ease Racial Tensions


MIAMI BEACH, Aug. 3 — In slick travel magazine ads, big-budget movies and hip-hop videos, this sun-drenched city is billed as an oceanfront oasis with an international flavor that offers something for everyone. To some, though, Miami Beach has never fully lived up to its reputation.

Off and on for decades, Miami Beach has had a strained relationship with African-American tourists and locals, who contend that the city's embrace of Hispanic, European and white American visitors has not always been extended to blacks.

When city officials snubbed Nelson Mandela during a visit here in 1990, local civil rights activists led a two-and-a-half-year boycott of Miami Beach by African-American tourists that cost the city $50 million, by some estimates. Tensions have risen and fallen since, edging up again over the 2001 Memorial Day weekend, when the city did little to prepare for an influx of 250,000 hip-hop fans for club events on South Beach that had been promoted on urban radio stations throughout the country.

The disorganization led to overcrowded streets and hotels and more than 200 arrests and vocal complaints by local residents and business owners that the weekend had been a blight on the city's image.

Enter R. Donahue Peebles, a multimillionaire developer on a mission. Mr. Peebles bulldozed his way onto the pricey real estate scene in 1996, becoming a major part of Miami Beach's answer to its racial tensions.

As part of a deal to end the boycott, the city agreed to allocate some of its oceanfront real estate and invest $10 million in an African-American-owned hotel. The result is the Royal Palm Crowne Plaza Resort, developed and owned by the Peebles Atlantic Development Corporation.

"The whole idea for the hotel was conceived to be a panacea to restore relations between the black community and leadership in Miami Beach," said Nancy Liebman, who was until last year a Miami Beach commissioner and one of the people criticized for statements she made about the 2001 hip-hop weekend.

"The hotel seems to be a very bright and shining star in the tourism aspect of Miami Beach," Ms. Liebman said. The mayor of Miami Beach, David Dermer, did not return calls requesting an interview.

Given the rocky road to making the Royal Palm a reality, Mr. Peebles said he was not looking for local officials to weigh in. "They should be proud and grateful that my company and I created the Royal Palm, and finished it," he said.

"We built this project under very challenging circumstances," he said. "There was contaminated soil, there was structural defects on the building, the hotel management industry basically collapsed, we had Sept. 11 after that, all those obstacles. The project went over $20 million over budget, and I didn't walk away."

Not only did he have his company and investors to consider, Mr. Peebles also had a personal investment in the Royal Palm, an elegantly appointed, $84 million resort. "I didn't want to be, as a developer, the person who failed to build the African-American-owned hotel," he said. "It would have allowed the city and others who may not be supportive of equal economic opportunity to say, 'Hey, we tried to build an African-American-owned hotel but the developer couldn't do it, so now we don't have that responsibility anymore.' "

Mr. Peebles has not stopped there. He is planning to transform the Bath Club, one of the oldest private clubs in the country, into 20-story condominiums and private villas with prices starting at $5 million.

If the Royal Palm sent a message, Mr. Peebles was making an even bolder statement with the Bath Club. Dating to the 1920's, the Mediterranean Revival-style club was once an exclusive getaway for wealthy snowbirds. Herbert Hoover was a member; in 1996, Mr. Peebles joined too. Soon after, a local newspaper reporter asked how he felt being the first African-American member of a club that had historically excluded blacks and Jews. He said he was stunned.

When he found out a few years later that the club was debt ridden and on the market for a mere $10 million, he bought it. Construction will begin later this year, he said.

Just as his projects blend old-style architecture and modern decor, Mr. Peebles himself is an image of contrasts. He began a recent interview by declaring, "I'm not an African-American businessperson — I'm a businessperson." But promotional materials distributed by his office repeatedly refer to his business as African-American owned and his projects as African-American firsts.

Mr. Peebles also says he is committed to creating career opportunities for African-Americans. The general manager of the Royal Palm is black, and the hotel staff reflects the diversity he says he is striving for, though the Bath Club's sales and marketing staff is mostly white.

Mr. Peebles says that who he is and what he does involve a dual responsibility. "I'm a businessperson who has just as much of a sense of responsibility to my employees and my investors, but I also feel a sense of responsibility to the community I represent," he said.

The Royal Palm has come to be known as the black hotel, a distinction Mr. Peebles admits is simplistic, but embraces anyway. The hotel has also become a source of pride to some residents and tourists here.

Dwayne Bryant, an African-American firefighter from Newark who was visiting here for the first time on his vacation last week, said he switched hotels when a cab driver told him about the Royal Palm.

"It's long past due," Mr. Bryant said. "There should be more black-owned businesses out here. I mean, this place is for everyone — it's not just for whites, not just for Latinos, not just for blacks."

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