The Sunshine Economy: Race, Real Estate And A Recovery
Don Peebles' real estate career in South Florida began because of racial tension and economic inclusion 25 years ago – a theme that has emerged again in the aftermath of the George Floyd killing. Peebles wants to diversify his industry as he's optimistic about the post-pandemic recovery.
Don Peebles had never seen a real estate deal that required a Black developer before he came to Miami Beach in the mid-1990s. He already was a successful and wealthy developer in Washington D.C. He was familiar with projects that were geared toward women and minority developers, but one that specifically called for a Black developer — that was a first.
"I thought, 'Wow, what could they have possibly done to make things so bad that they need to do this?'" he said.
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What happened was Nelson Mandela. In the summer of 1990, Mandela was touring the United States after being released from 27 years in a South African prison. He was due to visit Miami and the city planned to celebrate with a proclamation and give Mandela a key to the city. But before Mandela came here, he praised Cuban dictator Fidel Castro on ABC's "Nightline" for supporting "our struggle to the hilt."
With that, the Cuban-American political leaders canceled the plans. A national organization of Black lawyers canceled their convention in Miami. Within weeks, other groups did the same. It became known as the "Quiet Riot" — an economic boycott of the region’s hospitality industry.
It lasted nearly three years. Apologies were given and proclamations were issued. And steps toward more racial inclusion of Black people in the hospitality business, including a black-owned, convention-worthy hotel in Miami Beach. And that's where Peebles came in.
Peebles eventually won the deal to develop the Royal Palm Hotel, becoming the first Black-owned, resort-style luxury hotel in Miami Beach. It put race at the center of his real estate experience in South Florida.
"It opened my eyes to to be more mindful of the impediments that women and people of color confront when doing business in South Florida," he said. "It made me much more of an outspoken critic of that system."
He thinks it has had made him less popular within real estate development circles.
His portfolio in South Florida is not as large or flashy as other developers like Jorge Pérez and Armando Codina. Peebles has projects in several cities including Los Angeles, Charlotte, and Washington D.C. He calls himself "the outside insider.
"I'm trying to force people to be more inclusive," he said
At the heart of the Quiet Riot boycott in the early '90s was economic inclusion – a theme that has emerged again in the aftermath of the killing of George Floyd by a Minneapolis police officer.
"I think that there needs to be a recognition that systemic oppression and discrimination needs to be rectified by affirmative steps and providing opportunity."
Talent is distributed equally. It is opportunity that's discriminatorily applied and access to capital is key to that."
For Peebles, that means aiming to apportion credit and work "reflective of the demographics of the communities." Defining what is the community would shape that effort.
According to the Census Bureau, one-fifth of the South Florida population was Black in 2018, the latest data available. It was almost 30 percent in Broward while about half that in Miami-Dade.
"Talent is distributed equally. It is opportunity that's discriminatorily applied and access to capital is key to that," he said.
This is one of the reasons behind Peebles' effort to raise a $500 million real estate investment fund directed at women and minority developers. He began this effort in mid-2019. Before the pandemic, he was growing frustrated by efforts to raise the money from outside investors such as public pension funds and others.
"There shouldn't be this idea that in order to do business with African-Americans, you have to take a less valuable project or a riskier investment or an inferior product. You should be able to do business with them the same way you do with white investors — look at the deal first."
After George Floyd's death in May, fundraising efforts changed. He said he's raised two-thirds of the goal and expects to make the first investments this year — targeting relatively small projects from less-seasoned developers.
In the meantime, the veteran developer is looking for opportunities to come out of the pandemic difficulty, particularly with hotel real estate. Peebles expects to be a buyer, particularly of higher-end hotels in vacation destinations — like South Florida.
"You cannot virtually have a vacation," he said. "You're not going to get a sun tan virtually. You have to physically go [to Miami Beach]."