Plaza would pay $6 million for the right to brand and manage the hotel.
As it turned out, the Hyatt team was named the top bidder by the city’s citizens’ selection committee, which was set up to make recommendations to the city commission. Peebles came in second, while Baltimore developer Otis Warren came in third. The three finalists were then invited to make presentations to the commissioners, but with the recommendation, Hyatt clearly had the edge.
Peebles knew politics was behind it all. “The city’s financial adviser had recommended us financially; we had three loan commitments and nobody else had any,” he says of the financial backing he received from Nations Bank, Ocean Bank, and Capital Bank. Peebles, however, had an ace in the hole: the Shorecrest property. The city wanted the Royal Palm and Shorecrest properties developed in tandem, and even if Hyatt won the Royal Palm, Peebles still owned the Shorecrest. “I knew that in the end, I’d either wind up with the whole project or Hyatt would have to pay me handsomely to walk away from the Shorecrest.”
Peebles was prepared for action. While he hired lobbyists to help him state his case, he personally developed relationships with city councilmen and pressed for their vote commitment. “I believe that when you go into battle for something, you cannot delegate that stuff,” he says. “People needed to connect to me. They needed to understand that I was going to deliver this project; I was going to get it done. The black community had to understand that I was not going to embarrass us by not getting it finished — that no matter what happened, no matter what obstacles came up, I was going to be here, and I wasn’t walking, and we were going to get it done. And it was going to create opportunities that we can all be proud of.”
He also had to contend with public opinion from many who thought he was getting a sweet deal because he was African American. Peebles is quick to point out that during that same time period, neighboring hotel Loews also received money from the city. Royal Palm received $10 million to build 400 rooms — some $23,000 per room — while the city invested $60 million in the 800-room Loews — or $75,000 per room. Loews also had 99 years to repay the loan, compared to 25 years for Royal Palm. “I brought this up to the city saying, ‘Look at the disparity between the two.’ And they said that the reason is that Loews is a Forbes 100 company, and ‘we feel our money is safer with them,’” Peebles says. “But the idea is that if you’re giving a subsidy, you’re supposed to subsidize something that wouldn’t have been able to be done without the subsidy, and there’s no compelling argument to have treated Loews better than us.”
Peebles’ strategy paid off. Not only was there a national spotlight on Miami Beach and the plight of an African American developer, but Peebles was able