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1655-10 African American/Blacks • Black-owned hotel paves way for new opportunities on South Beach Page 1 of 3 i::�:Jr...x.:r{:\i'.:;�4 vC{..w.:}`+:•�:y.•'...:�}ti:,{,.x,{•{.�r�rxv..• .•:•� r Home News Sports Entertainment Classified Business Weather Shopping http://www.sun-sentinel.com/news/local/southflorida/sfl-hote10210.story?cull=sfla%2Dnews%2Dfront Black-owned hotel paves way for new opportunities on South Beach By David Cazares Miami Bureau February 9, 2002 MIAMI BEACH -- When one of the top African-American advertising agencies considered moving the Acapulco Black Film Festival from Mexico to a new location, its search led to an obvious choice: the Royal Palm Crowne Plaza, the nation's first black-owned luxury resort. For Byron Lewis, chairman and CEO of Uniworld Group, a division of which stages the film festival, the hotel was more than a symbolic selection. In the Royal Palm, Lewis sees a resort that could open doors for blacks in the hotel business and related industries, especially in South Florida, where blacks have long complained they have been denied opportunities. • "We have a number of African-Americans who own car dealerships and fast food franchises,"Lewis said. "The idea of a major hotel in a major resort community is very distinctive. It definitely sends out a very strong message of what is possible." In June, when the sixth annual festival begins, more than 3,500 film directors, writers and actors and others from the United States, England, France, Canada and Africa are expected to pour into the hotel. Now that the resort is complete, black groups from around the country are clamoring to book rooms at the Royal Palm, among them the Congressional Black Caucus.Next year, the NAACP will bring its national convention to the site. iWith the opening of the Royal Palm this month, an $84 million development made possible by an agreement that ended a black tourism boycott of the Miami area, South Beach could lure a greater share i,� of the$35 billion a year blacks spend on travel. The hotel, developed by R. Donahue Peebles' Atlantic Development Corp., also is expected to spur the creation of supporting businesses. Black leaders in Miami say the Royal Palm also could help open up Miami Beach, a cornerstone of Florida's$20 billion tourism industry that has denied blacks a share of its economic fortunes. The 422-room Royal Palm, located between the beach and Collins Avenue at 15th Street, wouldn't have been possible without the ambitious and smooth-talking Peebles, a 41-year-old real-estate developer who arrived in South Florida in 1996 with experience and hotel industry connections. The project was delayed because of crumbling concrete in the Royal Palm, one of the two historic hotels that were to be renovated as part of development. Black-owned hotel paves way for new opportunities on South Beach Page 2 of 3 After the 1930s building was torn down, Peebles built an exact replica of it. That structure and the Shorecrest were then given new 17-story towers. Peebles, the resort's majority owner, said his marketing staff will reach out to all travelers. But he said the fact more than 95 percent of his hotel's upper management posts will be filled by blacks should help lure black business and professional meetings and leisure travelers from cities such as Washington, D.C., Atlanta, New York, Boston, Chicago, Detroit and New Orleans. "In Miami Beach, we have not been able to penetrate the African-American market," Peebles said. "Frankly, African-Americans, when they go to warmer climates, tend to go to the Caribbean. Part of the reason is those environments are run by blacks and by governments who are more receptive and responsive to African-Americans. "We will be able to look the black associations and African-American professional organizations in'the eye and say we are committed to diversity—look what's being done in this community," Peebles said. "The first black or African-American hotel wasn't done in New York, Washington, D.C., or Chicago. It was done in Miami Beach. That says something about our community." The new resort already has garnered publicity from the BBC Worldwide and Black Entertainment Television. It's also received press in Boston,New York and San Diego. The publicity highlights South Florida's efforts to resolve the boycott Smith and other prominent blacks called for in 1990, when Miami city commissioners snubbed visiting South African leader Nelson Mandela—an effort that cost the region $50 million in lost business. The boycott led county and tourism officials to seek 20"points of progress," among them the Visitor Industry Council, created to spur greater black participation in the tourism industry —and a$10 million subsidy from Miami Beach for the Royal Palm. IC Stu Blumberg, president of the Greater Miami &the Beaches Hotel Association, said the new resort should help finally resolve the friction between blacks and the tourism industry underlying the boycott. But Blumberg said the Royal Palm also will be good for the city's economic fortunes given that when paired with the 800-room Loews Miami Beach, it will make South Beach competitive for major conventions with other major facilities. Both hotels are only a few blocks from the Miami Beach Convention Center. "I wish it had been open years ago,"Blumberg said. "It's a new hotel in a location that is dynamite and proven by the success of the Loews next door." Peebles is quick to point out his resort is not the beneficiary of corporate welfare, as the $10 million provided by Miami Beach is a loan that must be paid back over 25 years. The Royal Palm also must pay Miami Beach $490,000 a year in rent and 20 percent of the any gross over$17 million a year for a decade, he said. Average opening room rates at the resort will be $200 a night, with beachfront cabanas going for$550 in the summer and $659 in the peak season,Peebles said. Scott Berman, a hotel analyst with the PricewaterhouseCoopers accounting firm, said the resort's { Black-owned hotel paves way for new opportunities on South Beach Page 3 of 3 success will depend on its ability to market itself to groups, conventions and leisure travelers, particularly in its first year. But Berman is not sure that Peebles' strategy of paying special attention to blacks will make a difference. What will likely be more important are Miami Beach's status as a favorite destination and the Crown Plaza hotel conglomerate, which is one of the world's largest, he said. "I don't care if it's minority owners or whomever," Berman said. "A consumer, at least as far as I know, has never chosen a hotel based on the color of somebody's skin that owns it. I think it's going to be successful one way or another if it addresses its ability to deliver a first-rate product." Peebles, who saw a deal to build a 500-room convention hotel at Port Everglades fall apart, intends to deliver in Miami Beach. But he also wants the Royal Palm to be an example of the kind of successful public/private partnership he thinks is needed to break down barriers to minority participation in the hotel industry. But for H.T. Smith, a prominent Miami lawyer who helped lead the boycott a decade ago, the Royal Palm resort doesn't so much close a chapter in the area's troubled history as mark another step in the struggle for equality of economic opportunity. He hopes Peebles' resort will show blacks around the country how to make similar gains. "What we wanted to do with our demand for a$10 million subsidy towards the development of an African-American hotel was to show to the rest of America that not only could this be done as a result of a civil rights struggle," Smith said. "This was a tremendous opportunity that could be replicated across the country. "African-Americans in New York, Atlanta,Philadelphia,New Jersey and Washington, D.C., will say, `If they can do it in Miami, you know we've got to do it here,"" Smith said. "That is the type of attitude that we want to try to create." David Cazares can be reached at dcazares@sun-sentinel.com or 305-810-5012. Copyright©2002, South Florida Sun-Sentinel k � iI