Beating Whitey

Developer Donahue Peebles is as handsome, smooth, articulate, & nasty as he needs to be

In December Gonzalez reported that both sides appeared close to a settlement. This would allow Don to convert the Shorecrest into a time-share condo-hotel, which is what he wants. In exchange, Don would agree to pay the city $4.5 million plus eight percent interest after the closing of the first unit sale. The proposed settlement also calls for Peebles to pay back only fifty percent of the rent, or $326,664, from November 2000 through April of last year, plus the full rent due since May of 2002, which totals $285,833. "Quite candidly, I prefer cash," Don said of the pending compromise. "But the city doesn't want to part with cash, so we came up with a creative solution to resolve these claims and move forward."

One sticking point remains: the number of hotel rooms Peebles can make available for conventions. In an effort to boost Miami Beach's convention business, the city required the Loews to prioritize 650 of its 800 rooms for conventioneers. The city also required the RP and the Shorecrest to prioritize 350 rooms for the same reason. But if Don gets to convert the Shorecrest into a time-share, his combined convention room total would decline to 272 rooms.

"I've told Don that I am not willing to change the convention center agreement," Gonzalez said, adding that he asked the developer to find a way to make the Shorecrest rooms available during conventions. "Peebles's counteroffer is to leave it at 272 rooms and call it a day. I'm not sure I am ready to do that because the city also has to look out for the best interests of the convention center, keeping it competitive as possible."

Steve Satterwhite
Peebles opened the Royal Palm Crowne Plaza Resort in 2002, after years of haggllng with the city over lease terms and millions in extra costs
Steve Satterwhite
Peebles opened the Royal Palm Crowne Plaza Resort in 2002, after years of haggllng with the city over lease terms and millions in extra costs

What's more, Gonzalez explained, the city has begun efforts to expand the convention center by adding a ballroom and meeting space. "So how can we justify taking away rooms when we need to be adding more rooms?" he reasoned. "Is it a deal-breaker? I don't know. That is a policy decision of the city commission."

On the other side of the MacArthur Causeway, shopping inside a whimsical candle store in Coral Gables, Commissioner Simon Cruz was visibly annoyed by the suggestion that he and city bureaucrats are succumbing to Peebles's pressure. Cruz, along with Gonzalez, is part of the city's negotiations team. "There are a lot of people out there who will criticize any deal we do with Don," Cruz bristled. "I am not concerned with that. My job is to make sure we cut the best deal possible. I take offense to anyone who thinks I'm caving ..."

Cruz emphatically pointed out that he, along with Commissioner Saul Gross, voted to stop negotiations with Don until he paid up the rent he owed the city. But Cruz offered that getting into a legal dispute with Peebles over the Royal Palm's construction problems isn't worth the hassle. "We have created a lot of goodwill, particularly with the black community," he rationalized. "After going through all these initiatives to get a black-owned hotel, it is very shortsighted to draw hard lines and throw the baby out with the bath water. We've worked too hard to create a diversified community to just blow it at the end."

The hairs on the back of Neisen Kasdin's head stand up at the very mention of Don Peebles. The former Miami Beach mayor and the developer have no love for each other, even though Kasdin pushed hard on the Miami Beach Commission to award Peebles the Royal Palm project in 1996. Their political alliance deteriorated in the summer of 1998, a year before Kasdin ran for his second term as mayor. What ensued between them would go down as one of the nastiest political brawls in recent history.

It began after Peebles bought the Bath Club, a low-rise private club at 5937 Collins Ave., in the middle of mid- and high-rise condos that had fallen on hard times in the Eighties and Nineties. Peebles wanted to bump the zoning density up a notch so he could preserve the existing historic structure and build a condo and thirteen-story resort-hotel tower on the same site. But when he approached commissioners about getting the increase at the September 29, 1999, commission meeting, Kasdin told Peebles he wouldn't support Bath Club plans until the developer sought input from residents in the surrounding community. Condo residents were against the idea of a new high-rise that would increase traffic and obscure oceanfront views. At that point, Peebles decided to financially and publicly support Marty Shapiro against Kasdin in the 1999 Miami Beach mayoral race. "I was going to remain neutral and not support either of them," Peebles recalled during the interview at his Coral Gables office.

At an October 20, 1999, city commission meeting, Don dropped a bomb on Kasdin, accusing the mayor of voting against his Bath Club proposal because he had given campaign contributions to Shapiro. He then accused Kasdin of privately supporting the Bath Club, but changing his mind after Don refused to back Neisen's re-election bid.

In reality, it was an old-fashioned political backstabbing by both men. Don expected Neisen's loyalty on his disputes with the city, and Kasdin wanted Peebles's personal and financial loyalty. What resulted was a Miami-Dade State Attorney's Office investigation into both men's alleged misdeeds. Shortly after the commission meeting, the SAO looked at Don's accusations against Neisen. Kasdin, who wasn't buckling under Peebles's pressure, countered by telling the SAO that Don was funneling campaign contributions to Shapiro through the Miami Beach Council of Condominiums.

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