Two art deco hotels combine as Miami Beach's first African-American-owned resort
By David Jones | Online Only | Dec. 20, 2002
MIAMI BEACH—Jesse Stewart Jr., who began his career in this city's hotels 20 years ago, can recall a time when black residents were barred from everyday activities.
"Years ago, our parents could not come on the beach without a pass," recalls Stewart, whose first job was as a management trainee for Sheraton Hotels.
Today, Stewart is the general manager of the city's only African-American-owned hotel, renovated and reopened earlier this year.
Tensions between Miami Beach's many ethnic and racial groups simmered for decades, and in 1990, the area erupted in another race-relations crisis when local politicians ignored recently freed Nelson Mandela during his seven-city tour of America because of his support of Fidel Castro.
That incident created a firestorm that led black civil rights activists to begin a 1,000-day boycott against Miami Beach's convention and tourism business. Because African-American groups refused to hold meetings or book group tours in Miami Beach, the region lost more than $50 million in convention business.
To repair the city's image and recapture millions of dollars in lost revenue, in 1993 local officials negotiated a truce with boycott organizers. A key component of that agreement—to encourage African-American education, jobs, and ownership in the hospitality industry—recently came to fruition when the $84 million Royal Palm Crowne Plaza Resort opened in May. Not only is the Royal Palm the first newly constructed beachfront hotel here in more than 30 years, it is one of the only African-American owned resorts in the country.
The new 422-room resort opened on the site of the historic Royal Palm Hotel and Shorecrest Hotel, both built in the 1930s. In their heydays, the Royal Palm and Shorecrest were two of the most successful, sophisticated hotels on the beach. The Royal Palm was built in 1939 as a four-story resort and expanded to seven stories two years later. Designed by architect Donald G. Smith, the art deco structure was built the same year as the nearby Poinciana, St. Moritz, and Sands hotels.
In October 1995, R. Donahue Peebles, a developer from Washington, D.C., was vacationing at the recently opened Delano Hotel Miami Beach. "I saw all the development going on, so we decided to get a vacation home there," recalls Peebles, owner of Peebles Atlantic Development Corp. "I was kind of just keeping my eyes open for the right opportunity."
When Peebles and his wife returned that December, he noticed stories in the Miami Herald about South Beach's hot real-estate market and about the Shorecrest Hotel, at the time a struggling residential hotel renting $50 rooms. Both the Shorecrest and Royal Palm were near the convention center, a district suffering from neglect and economic dislocation.
"The convention center needed to catch up, and the hotels that service [it] needed to catch up with the rest of the nation," says Herb Sosa, executive director of the Miami Design Preservation League.
Owners of the long-neglected Shorecrest, who bought the hotel for $900,000, had put it on the market for $4 million. Within two months, Peebles inspected the Shorecrest and agreed to buy the property.
Meanwhile, as part of the boycott settlement, the Miami Beach Commission was soliciting bids for a new black-owned hotel, and the city of Miami Beach had pledged $10 million in public financing to get such a hotel off the ground. Seven investor groups emerged with various resort ideas and hotel brands, including Ritz-Carlton, Hyatt, Wyndham, Marriott, and other chains. A $56 million beachfront Hyatt hotel won the initial bid process, but Peebles successfully argued that his offer was better. It was the first of several uphill battles fought to open the Royal Palm, Peebles says.
In August 1998, Peebles' team went into the Royal Palm to do interior demolition. What they found would forever alter the scope of the project. Despite a city inspection report that found the property structurally sound, the old Royal Palm was anything but. A fairly common construction technique in 1930s Miami Beach—mixing concrete with beach sand—had led to structural defects after chlorine levels in the seawater eroded the walls.
"There was no problem in the Shorecrest, but in the Royal Palm there was a very high percentage of chlorine in the concrete," says Bernardo Fort-Brescia, president of Arquitectonica International Corp., the Miami-based architectural firm that oversaw the project. "You could actually grab hold of the columns, and the rebar would come off in your hands."
Three months later, the city commission voted to condemn the old Royal Palm, much to the dismay of preservation officials. Yet a caveat was added to the demolition order: the hotel had to be rebuilt from its original plans, using original construction techniques. Furnishings from the old hotel, including a green keystone reception desk and a terrazzo floor with a compass-rose motif, would be salvaged and reinstalled in the new hotel. The Shorecrest, which wasn't contaminated by chlorine, was easily incorporated into the new design.
Faced with this challenge, Fort-Brescia's team went into action. They performed architectural plastic surgery, transplanting a new set of limbs and a fresh face onto an otherwise dormant torso.
"It's the first time, because of the special circumstances involved, that somebody had to rebuild an existing structure with this kind of exactitude," says Fort-Brescia. His firm conceived of the Royal Palm Crowne Plaza as a resort village, constructing a circular Shorecrest tower and an angular Royal Palm tower behind the original Shorecrest and rebuilt Royal Palm and adding a two-story row of cabanas around a tropical garden.
Peebles and Stewart say they're optimistic about the resort's future, based on occupancies approaching 60 percent during the rainy season and a slumping tourist economy. Already, the resort has booked major conventions, including the 2003 NAACP national convention.
Peebles is also close to resolving a financial dispute with the city of Miami Beach, which resulted in $11 million in claims for multiple construction delays and soil contamination. Under a tentative agreement, he will repay several hundred thousand dollars in rent and sales taxes that he withheld from the city during the dispute. Peebles said his contractor withheld $800,000 due to the contaminated soil on the property. When a final agreement is reached, Peebles will be able to convert rooms on the Shorecrest side of the Royal Palm into condominiums.
Peebles realizes that many people will closely monitor the success of the Royal Palm to see if it translates into opportunities for African-Americans, but he says he doesn't feel pressure to set an example.
"I don't have anything to prove to myself," Peebles says. "There's never been a question in my mind that there are many talented African-American businesspeople that would have the drive to be successful in this business. I see breaking a barrier as a tremendous opportunity."
Peebles unwittingly broke another barrier in 1996, when he became the first African-American member of Miami Beach's historic Bath Club, which opened in 1926 and once hosted member Herbert Hoover. Two years later, he bought the club for about $10 million. Now he's planning to convert the exclusive Bath Club into a luxury resort hotel with condominiums and oceanfront villas.
Jesse Stewart, who oversees Peebles' Royal Palm employees, about half of whom are African-American, is committed to putting the hotel on the map. "This is really more than just a job," Stewart says. "It feels like a calling."
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