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1675-14 Royal Palm Groove • mh DELAYS PLAGUE MIAMI BEACH RESORT PROJECT 04/06/1998 THE MIAMI HERALD Copyright (c) 1998, The Miami Herald DATE: Monday, April 6, 1998 EDITION: Final SECTION: Business Monday PAGE: 21BM LENGTH: 132 lines ILLUSTRATION: photo: Arthur Courshon (LAWYER-C) SOURCE/CREDIT LINE: By BARBARA De LOLLIS Herald Business Writer MEMO: COVER STORY DELAYS PLAGUE MIAMI BEACH RESORT PROJECT As questions mount over the development of Miami Beach' s first African-American-owned hotel, developer R. Donahue Peebles said Friday the delay in building the Royal Palm Crowne Plaza Resort are costing millions of dollars in lost bookings. The $64 million, 422-room hotel was supposed to have been under construction by now, but preliminary work has barely begun. Peebles has been putting out fires small and large, from the protracted condemnation of the hotel site, to obtaining city approval for the extra $5 million in finishing touches, to managing a revolving door of investors and lawsuits. Peebles, however, blames the delay squarely on what he says was Miami Beach' s unusually cumbersome negotiations process, led by retired banker Arthur Courshon. By the time he got a binding agreement nine months after being picked the winning bidder, Peebles was forced to retrace some of his steps. "The development business is a moving target. Once you get all things in place, the idea is to close it out. The longer you wait, the more your chances are for things to come out of line. " Courshon, who served as the city' s chief negotiator, admits taking a tough position with Peebles after learning about Peebles ' savvy, dealmaking style in Washington, D.C. "That raised questions in my mind, which caused me during the negotiating period to be very conservative and have a show-me attitude several times along the way. " Looking back, Courshon said Peebles caused the city "some distress and some aggravation, but in the final analysis, he performed. " The historic project, which involves restoration of the Shorecrest and v , Royal Palm hotels at 1535-1545 Collins Ave. , was part of the settlement that ended the three-year black tourism boycott called in 1993 after Miami politicians snubbed South Africa President Nelson Mandela. The project has since evolved into a national model for minority hotel development, even though African American ownership was halved from the original 100 percent ownership. Still, Peebles has promised that 25 percent to 50 percent of the project ' s economic impact will flow into minority communities. "We'd like to get to the upper limit, but it ' s not going to be easy, " said Peter Calin, a partner of HCF Group, a partnership of four African-American men that originally won the Miami Beach project before Peebles entered the race but eventually failed to get financing. HCF later joined Peebles ' team. In December 1995, Miami Beach invited black development teams to submit hotel proposals to build a sorely needed convention center hotel on the Royal Palms hotel property with the lure of $10 million in incentives. Locked up deal While vacationing in South Beach with his family, Peebles read about the deal and immediately moved to lock up the Shorecrest next door, striking a deal with the landowner and the leaseholder. Critics say the clever move gave him an edge in the selection process. His plan would revive the Royal Palm and the Shorecrest with a flamboyant Art Deco theme designed by Arquitectonica. Peebles ultimately won the competition after initially placing second to cable television entrepreneur Eugene Jackson' s Hyatt team. But after claiming victory, he lost control of the Shorecrest over a legal dispute. The city had to go through a lengthy condemnation process that was finally settled last week for $5 . 7 million, about the same price that Peebles would have paid for the site had he bought it. The news was a relief to the people involved in the condemnation proceedings. " It was a mess, " said Ira Elegant, the Miami lawyer who represented the leaseholders, Miami Beach residents Cyrus Merhpovyan and Marta Solini. Miami Beach attorney Arnold Weiner represented the landowners, Gisela and Egnacio Cardonas, a couple who bought the property 48 years ago. "The Cardonases found this to be a horrendously disappointing experience, " Weiner said. Investor trouble Peebles has also encountered investor trouble along the way, though it does not affect the hotel ' s construction loan with Union Planters and Ocean Bank, or permanent financing with General Motors Acceptance Corp. One of his investors, Motown Records Chairman Clarence Avant, opted out of the deal, looking for a more liquid investment than real estate, Peebles said. He is suing two others, Jeffrey Earl Thompson, who heads a Washington, D.C. accounting firm, and Cecile D. Barker, founder of OAO Technology Solutions, an information systems company in Greenbelt, Md. Peebles is accusing both of defaulting on payments required as part of their partnership agreements. Barker did not return a phone call. But Thompson, when asked about Peebles, had this to say: "As an African American and a supporter of Nelson Mandela, I am totally, totally, totally appalled at how some of my partners in this deal have handled this situation, " Thompson said, in the only comment he would make. Peebles said he doesn't think Thompson is referring to him. Barker, meanwhile, sued Peebles. In Miami-Dade Circuit Court documents, he accuses Peebles of commingling partnership funds and using some of them for improper expenses: a race horse and a $10, 000 birthday bash. Peebles "tried to justify the purchase by claiming that the race horse was intended to serve as a mascot " for the hotel, the suit says. Peebles acknowledges he did buy a thoroughbred, Sir Irish' s Secret, with a consortium of 12 South Florida businessmen he would not identify. He contends that "every step was made with prior consent. " Ironically, he noted, by the time Barker filed his suit against Peebles last October, the horse had won back the investment racing at Hialeah Park and Gulfstream Park race tracks. Peebles has a $1 .8 million stake in the venture; Barker, Thompson and HCF $1 .2 million; and Crowne Plaza $11 million. No dual opening Until last week, the Shorecrest and Royal Palm lay dead silent, in stark contrast to the construction frenzy at the intersection of Collins Avenue and 15th Street where luxury condominium buildings are also going up. On Thursday, a crew began preparing one of the hotels for construction, removing asbestos and marking off vintage windows for preservation. The week before, Peebles signed the contract with Clark Construction Group of Bethesda, Md. , and HCF partner Peter Calin said he is scouting for qualified minority contractors to join the massive job. Peebles also says he ' s 60 days from announcing the hiring of a general manager, who will be African American. The project is moving forward now, and Peebles expects to open in the winter of 1999, instead of Oct. 15 of this year, the day the 800-room Loews Miami Beach hotel is slated to open next door. The two hotels were supposed to I open together so that the city could better market its convention center facilities to larger groups. A dual opening also would have prevented hotel guests from staying near a construction zone. It was the most challenging project in my career to date, " Peebles said. " I couldn 't imagine it being more difficult. " 0 Peebles said he is not facing the same pressures in Broward County, where he is building a 500-room, $72 .4 million convention center hotel in Fort Lauderdale. But he' s not in the clear yet. He submitted architectural plans drawn up by Bellon & Taylor, an IAfrican-American firm, and Arquitectonica, to the county for approval on Friday. Peebles is nine months away from construction and must finalize his construction financing and name an operator. Crowne Plaza, the operator he initially named and one that would have brought $7 million to the deal, may not go through with it. Peebles is considering other operators and said he expects to have an announcement in "a few months. " KEYWORDS: STATISTIC COST CONSTRUCTION TAG: 9804090266 6 of 120, 4 Terms mh BLACK-OWNED 10/12/1997 THE MIAMI HERALD Copyright (c) 1997, The Miami Herald DATE: Sunday, October 12 , 1997 EDITION: State SECTION: Local PAGE: 6B LENGTH: 45 lines SOURCE/CREDIT LINE: By PETER WHORISKEY Herald Staff Writer BLACK-OWNED BEACH HOTEL A DONE DEAL After months of negotiations, the city of Miami Beach and the developers of what would be Dade ' s first major black-owned hotel have come to terms on the $60 million oceanfront resort. "All the open issues have been negotiated, " said Arthur Courshon, the city' s chief negotiator. " It worked out beautifully. " Lawyers are drafting the final documents of the historic deal, which is a complicated lease agreement under which the developers, led by businessman Donahue Peebles, will lease a $10-million-plus oceanfront site near 15th Street from the city. The developers will build and operate a 425-room Crowne Plaza resort on the property and pay back the city with a guaranteed rent plus a cut of the revenues. The City Commission, which must ratify the deal, will consider the matter Oct. 21 . "The deal is done, " Peebles said. - -We have all our financing. We have permits to begin construction on the property. We 're set to go. " Construction could begin by January. Completion is expected in spring 1999 . The hotel agreement is the product of the settlement that ended Dade ' s three-year black tourism boycott in 1993 . In December 1995, the city invited black development teams to make hotel proposals. The lure: $10 million of incentives. Seven teams entered the competition. In June 1996, the Peebles group won the right to develop the hotel. Since then, the city and the developer have been engaged in protracted negotiations, which lagged in part because of difficulties in acquiring part of the site. "We 're hopeful that the project will create a symbol of economic opportunity for African Americans, " said Peebles, who has recently negotiated a deal with the Broward County Commission to build a $63 million, 500-room convention hotel next to the Broward Convention Center in Fort Lauderdale. If all goes as planned in Miami Beach, the Royal Palm Crowne Plaza Resort hotel will rise in the 1500 block of Collins Avenue. The plans, approved in December by the city' s design and development boards, call for retaining the original facades of the existing hotels on the site, the Royal Palm and Shorecrest. New rooms would rise behind these in flamboyant towers. The project was designed by Arquitectonica, the renowned Miami firm. TAG: 9710150415 10 of 120, 2 Terms mh BLACK-OWNED BEACH HOTEL A DONE DEAL 10/11/1997 THE MIAMI HERALD Copyright (c) 1997, The Miami Herald DATE: Saturday, October 11, 1997 EDITION: Final SECTION: Local PAGE: 1B LENGTH: 49 lines ILLUSTRATION: photo: BUSY BUILDER: Developer R. Donahue Peebles reached an agreement Friday to build a resort in Miami Beach. Here he stands on the site of the Broward hotel he will build in Fort Lauderdale. (a - ran Local Extra) SOURCE/CREDIT LINE: By PETER WHORISKEY Herald Staff Writer BLACK-OWNED BEACH HOTEL A DONE DEAL After months of negotiations, the city of Miami Beach and the developers of what would be Dade ' s first major black-owned hotel have come to terms on the $60 million oceanfront resort. "All the open issues have been negotiated, " said Arthur Courshon, the city' s chief negotiator. " It worked out beautifully. " Lawyers are drafting the final documents of the historic deal, which is a complicated lease agreement under which the developers, led by businessman Donahue Peebles, will lease a $10-million-plus oceanfront site near 15th Street from the city. The developers will build and operate a 425-room Crowne Plaza resort on the property and pay back the city with a guaranteed rent plus a cut of the revenues. The City Commission, which must ratify the deal, will consider the matter Oct. 21 . "The deal is done, " Peebles said. "We have all our financing. We have permits to begin construction on the property. We 're set to go. " Construction could begin by January. Completion is expected in spring 1999 . The hotel agreement is the product of the settlement that ended Dade' s three-year black tourism boycott in 1993 . In December 1995, the city invited black development teams to make hotel proposals. The lure: $10 million of incentives. Seven teams entered the competition. In June 1996, the Peebles group won the right to develop the hotel. Since then, the city and the developer have been engaged in protracted negotiations, which lagged in part because of difficulties in acquiring part of the site. "We' re hopeful that the project will create a symbol of economic opportunity for African Americans, " said Peebles, who has recently negotiated a deal with the Broward County Commission to build a $63 million, 500-room convention hotel next to the Broward Convention Center in Fort Lauderdale. If all goes as planned in Miami Beach, the Royal Palm Crowne Plaza Resort hotel will rise in the 1500 block of Collins Avenue. The plans, approved in December by the city' s design and development boards, call for retaining the M original facades of the existing hotels on the site, the Royal Palm and Shorecrest. New rooms would rise behind these in flamboyant towers. The project was designed by Arquitectonica, the renowned Miami firm. 'What also makes it special is that this hotel design is truly respectful of the Art Deco district, " Peebles said. "It respects the place. " Cutline JOE RIMKUS JR. / Herald Staff TAG: 9710130090 11 of 120, 2 Terms mh LUNCHEON HONORS PUBLIC SERVANT 09/02/1997 THE MIAMI HERALD Copyright (c) 1997, The Miami Herald DATE: Tuesday, September 2 , 1997 EDITION: Final SECTION: Local PAGE: 6B LENGTH: 16 lines SOURCE/CREDIT LINE: Herald Staff MEMO: OF NOTE LUNCHEON HONORS PUBLIC SERVANT Arthur H. Courshon will be honored for his decades of public service during a luncheon at noon Thursdayat the Miami Beach Convention Center. Tickets are $35 per person, or a table of 10 for $350 . Make checks payable to Arthur Courshon Tribute Luncheon and mail to the attention of: Joy Malakoff, Colonial Bank, 301 41st St. , Second Floor, Miami Beach, FL 33140 . Send items for Of Note to City Desk, The Herald, 1 Herald Plaza, Miami, FL 33132-1693 . TAG: 9709040065 13 of 120, 4 Terms Transfer complete. 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