Peebles Corporation CEO & Chairman R. Donahue Peebles: Real Dealer
January 30 2009 by C.J.Prince
The outcome of the recent presidential election likely disappointed Chief Executive readers, 80 percent of whom said they supported Sen. John McCain in his presidential bid. But at least one CEO celebrated Sen. Barack Obama’s victory: R. Donahue “Don” Peebles, founder of the Peebles Corporation, a $400 million real-estate development company based in Coral Gables, Fla., and author of The Peebles Principles: Tales and Tactics from an Entrepreneur’s Life of Winning Deals, Succeeding in Business, and Creating a Fortune from Scratch. As a member of Obama’s national finance committee, Peebles tapped his networks to help the campaign reach its $18 million fundraising goal in Florida. His efforts paid off: the Sunshine State came out in favor of Obama, 51–49 percent.
The real-estate mogul’s decision to get behind Obama might seem at odds with his own self-interest; Obama’s tax plan will likely dig deeper into Peebles’ pockets than would have McCain’s. But Peebles argues the picture isn’t that simple, citing Obama’s promise to eliminate the capital gains tax for small businesses and to create incentives for companies growing jobs in the U.S. And he doesn’t believe that he will ultimately pay that much more in taxes. “But if I do, and we have a better environment and a better economy that produces more business opportunities, I’ll make more money in the long run.”
He adds that conserving wealth isn’t his only priority. “I’m an American first and an entrepreneur second,” he says, asserting that he wants other Americans to have the same opportunity to achieve their dreams as he did. “My grandfather was a doorman at what is now the Marriott Wardman Park—and I now own a Marriott in the same city. That’s the American story,” he says. “This system is supposed to be, if you work hard and get a good education, there’s no limit to what you can accomplish.” The system is currently flawed, he observes, and he believes Obama can mend it.
Though he isn’t interested in an appointment in the new administration, Peebles’ involvement in the campaign was a natural fit, given his lifelong interest in politics. In high school, the Washington, D.C., native served as a page in the U.S. House of Representatives. In his 20s, he chaired the Board of Real Property Assessment & Appeal, the youngest chair of any board in the Capitol’s history.
Diplomacy skills, along with a talent for managing risk, helped Peebles succeed in some highly charged, complex public-private partnerships. In 2000, he gained notoriety when he won a bid to develop the Royal Palm Crowne Plaza Resort—Miami’s first African-American-owned resort hotel and part of a plan to heal tensions between the city and the African- American community. Thanks to numerous unexpected hurdles, the project went $16 million over budget, but Peebles wouldn’t walk away. “Part of it was that I didn’t want to be known as the person who didn’t complete this historic project that had all this symbolism associated with it. But I also believed that it was going to be a very profitable exercise.”
He was right. The deal helped to heal the racial rift, and Peebles netted $48 million when he sold the property a few years later. His prescient timing enables him to profit even in down markets, which he views as opportunities to gobble up prime property on the cheap, cashing in later when the pendulum inevitably swings back. And after two decades of exporting New York style to South Beach, the District of Columbia and Las Vegas, Peebles is set to make his New York debut. In October, Governor David Paterson chose Peebles’ team for the Aqueduct Gaming project, a partnership to build a 328,000-square-foot gaming and entertainment destination in Queens, N.Y. As private-public deals go, this one should be comparatively simple, Peebles says, noting that the capital for the first phase is already secure and that a local gaming facility should be somewhat insulated from larger economy woes.“The challenge will be the economic climate we’re operating in,” he says. But with a new sheriff in town, Peebles is anticipating a better climate in the near future. “We’re in for a profound change for the good.”