Miami Hotel Gets New Life

Second-time around may be the charm for Miami's black-owned hotel

If at first you don’t succeed, try again, could well be the mantra inspiring attempts to bring the first black-owned hotel to Miami’s shores.
Outbidding two other competitors–the Hyatt Regency and Wyndham chains– a group of investors has structured a financial package for the country’s first 100% African American-owned hotel, the Royal Palm, projected to open in 1999. The investment group is headed by R. Donahue Peebles, a D.C. building developer and president of R. Donahue Peebles Companies, and includes Motown Records Chairman Clarence Avant and NASA aerospace contractor Cecile D. Barker.

Groundbreaking for the $29 million Royal Palm Crowne Plaza Hotel is anticipated this year. The 252-room property, near the Miami Beach Convention Center, is the second go-round for the development of a major black-owned hotel in Miami. The resort was the main requirement for the 1993 settlement ending a Dade County tourism boycott, which began after area politicians snubbed Nelson Mandela during his U.S. visit in 1990 (see “Boycott Produces Results,” Newspoints, December 1994).

But the original deal fell apart after the Sheraton Corp., which was putting up $8 million in equity, withdrew from the project in February 1995. The City of Miami Beach Commission terminated negotiations, and put the project up for bidding by issuing a new request for proposal (RFP) in December 1995.

That’s when Peebles stepped in. He had recently acquired the property rights to build a $22 million, 152-unit all-suite tower on an adjacent Miami Beach site. When he learned of the RFP for the larger site, he assembled a team of architects, general contractors and engineers, and met with several hotel companies to discuss getting a flagship chain for the hotel.

Peebles also met with three banks that gave loan commitments to be submitted along with a bid to prove the project could be financed. The R.D.P Royal Palm Hotel Limited Companies plan was selected by commissioners in June 1996. Peebles has a 50% interest in the hotel. Barker, CEO of Orbiting Astronomical Observation Corp., has 16.75% and Motown Chairman Avant, 15%.

The group has a franchise agreement to operate under the Crowne Plaza Hotels & Resorts flag. Crowne Plaza is loaning furniture, fixtures and equipment but owns no share in the Royal Palm. “We made a conscious decision not to have the hotel be a partner in our venture,” says Peebles, “because if you’ve got a multi-million-dollar corporation as your partner, they are in a position of strength, and it can’t be a truly African American-owned business.”

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