Beating Whitey II

Around and around on the MIAB/black-owned hotel deal

Gross and Steinberg expressed shock and bewilderment after reading Peebles's letter. "I'm a little surprised," said Gross. "I have no problem with the deal. He's been telling us all along that he can take care of the boycott leaders. It was always a condition and he didn't object before."

Steinberg adds that Peebles is more unhappy with the two other requirements he and Gross insisted be added to the settlement. "If he really wants to resolve our issues then why would he demand that the city extend the time he can file a lawsuit against us?" Steinberg asks incredulously. Peebles's anger at his request to obtain the blessing of African-American boycott leaders is just "smoke and mirrors," Steinberg says, adding that Peebles may be trying to conceal the fact he doesn't have a bank commitment to guarantee the city's ten-million-dollar-loan repayment.

Now, Gross says, he's willing to remove the condition that Peebles obtain the support of the boycott leaders, but it won't matter. "I don't think Peebles had any intention of accepting what was negotiated," Gross surmises. "I think he's looking for a better financial deal."

Via telephone, Peebles's "anger" rises as he defends his position. "I didn't bring race into the equation," Peebles says. "They did! To me, that's disrespectful. Have they ever asked a Jewish businessman to get the blessing of the Jewish community before he closes a deal with the city?"

As he's wont to do, Peebles throws out the disparity between his deal and the $60 million in incentives the Tisch family (they only have to pay back $30 million) received from the city to build the Loews Miami Beach Hotel next door to the Royal Palm, on Collins between Fifteenth and Sixteenth streets. He points out that the Miami Beach commissioners who approved his original deal with the city didn't ask him to get the black community's blessing in 1996. "So why should I do it now?" Furthermore, he adds, he spent the past year negotiating with city representatives, including Cruz, who was the commission's appointee in the matter. "The agreement we came up with did not include the things Gross and Steinberg decided to arbitrarily add!"

Cruz reluctantly agreed: "We did everything we could to create a fair deal," he says exasperatedly. "The reality is that the Royal Palm Hotel is still going to be owned by an African American. We are still living within the spirit of the original agreement, so I didn't think it was necessary to get the approval from the black leaders."

If Peebles doesn't want to go to the boycott leaders, then the commission will, counters Gross. "If he doesn't feel comfortable doing it, then we can pick up the phone and talk to H.T. Smith ourselves," Gross says. "I don't think it's a big deal to go to the boycott leaders and say: 'It is in everyone's best interest to let Don sell the Shorecrest.'"

Of course, Peebles's interests have changed. He no longer wants to sell the Shorecrest as condos, preferring to keep it part of the resort because the condo market has become oversaturated in the past eighteen months. Peebles will ask Mayor Dermer, whom the commissioners want to finally "iron things out," to give him 99 years to pay off the city instead of 25. He also wants to slash his annual rent payments from $490,000 to $250,000. Basically, Peebles says, he wants the same treatment the Tisch family received from the city. The Loews got 99 years to pay off its $30 million debt. "It's either that or turn back the clock and give me a sound building," Peebles says sarcastically.

The whole episode makes one wonder if Peebles and some Miami Beach commissioners are masochists. Can they actually enjoy keeping their beef alive? After all, neither side loses by dragging out the conflict. The city can bide its time until Peebles decides to file a lawsuit where the burden will fall on the developer to prove the city knowingly sold him a bill of goods (i.e. the structurally unsafe Royal Palm building). Meanwhile Peebles can continue to withhold his lease payments to the city, daring MIAB officials to sue him for defaulting on the agreement. What city commissioner wants to read a newspaper headline that says: Miami Beach Sues Black Developer? "None of them," says a city hall lobbyist who insisted on anonymity.

Peebles scoffs at that theory. "I'm a businessman," he says. "I want to put this behind me. I signed an agreement. But that agreement can't keep changing once it gets to the commission for approval."

Besides, he says, he is going to start making his lease payments next month regardless of the current situation. "That, you can count on," he says.

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