BY BOB SHEMELIGIAN L.V. Business Press
South Florida-based Peebles Atlantic Development Corp., the nation’s largest African American-owned real estate developer, is planning Southern Nevada’s largest and most expensive luxury-hotel/apartment project. It’s to be built at the 13-acre site of the Las Palmas apartment complex on Paradise Road, across from the Wynn Las Vegas’ golf course.
Peebles Atlantic executives are tight-lipped about the cost of the 55-story, 1,830-room development but Las Vegas real estate appraisers estimate the total price could approach $1 billion.
“Being off the Strip, Las Palmas will be conducive to the affluent traveler who is looking for a quieter venue and who is willing to pay for it,” Peebles Atlantic CEO R. Donahue Peebles said. “This will be a place where high-profile people will be able to relax and conduct business while enjoying luxurious accommodations. We’re close enough to walk to the Strip and far enough away to afford our guests more privacy.”
R. Donahue Peebles
Jim Miller | Business Press
The Las Palmas Apartment Homes are slated to make way for a 55-story, 1,830-room luxury development planned by R. Donahue Peebles.
Courtesy Peebles Atlantic Development Peebles’ proposed condo-hotel project, as seen from the west.
Officials from Peebles Atlantic, which has real estate holdings throughout the nation valued at more than $500 million, are seeking construction permits and hope to break ground a year from now.
“We’re planning a four- to five-star hotel and it’s going to be built in phases,” said Daniel Grimm, senior vice president of Peebles Atlantic. The first phase will include an 800-room hotel at the front of the property and an 35,000-square-foot spa.
“The approach is a little less clinical and more holistic,” Grimm said of the planned spa. “It will offer creative ways to improve your life, such as tips on proper nutrition and fitness, and how to combine exercise with an enjoyable pastime, such as star-gazing trips to the desert.”
Once the hotel and spa are in operation, Peebles Atlantic will begin construction on the second phase of the project, which will include 1,030 residential units on the east side of the property, toward the back.
THE PRINCE OF SOUTH BEACH
Peebles, nicknamed “the prince of South Beach” because of his prestigious holdings in southern Florida, including the famed Residences at the Bath Club condominium project, said the upscale development is designed by Arquitectonica, an architectural firm headquartered in Miami, and will feature a “cutting-edge, cosmopolitan” design.
“We’re building a hotel comparable to a Four Seasons,” Peebles continued. “It will be architecturally spectacular and very service-oriented. If your hotel has 3,000 rooms, it’s almost impossible to execute five-star service for all your guests. But if you operate a 750- or 800-room hotel, you can exceed the expectations of your clients. That’s because you’re geared to providing service for the affluent traveler who expects service and is willing to pay for it.”
A former Congressional page, Peebles started in real estate while still a high school senior. He worked as an appraiser for his mother, a Washington, D.C., realtor. Peebles, 46, enrolled at Rutgers University as a pre-med student but dropped out after a year and plunged head-first into the real estate business.
At age 23, Peebles was appointed to Washington’s property-tax-appeal board. He also began investing in commercial property. Within a few years, he became one of the most successful developers in the D.C. area. A registered Democrat, Peebles has lobbied for and contributed to the campaigns of both Democratic and Republican national leaders including New York City Mayor David Dinkins, Florida Gov. Jeb Bush and President Bill Clinton.
“I believe in supporting the individual, not the party,” said Peebles, whose front lawn in Washington was the scene of Clinton’s press conference during the Rodney King riots, in April 1992.
THE BIGGEST CHALLENGE
But while Peebles has met success courting national figures from both parties and has built the nation’s 10th-largest African American-owned business, some say his toughest challenge could be turning a profit at Las Palmas.
“That area is progressing and just about anything is possible, but that property is getting very expensive and financing is getting tight,” said David Atwell, president of Resort Properties of America, and one of the leading brokers of resort-corridor acquisitions.
How expensive? “It would be very difficult to find land in that area for less than $10 million per acre,” said Don Foster Scoggins of Appraisers of Las Vegas.com.
Scoggins explained the Las Palmas site is unique because its size lends itself to a large high-rise project. “There are few sites (on Paradise Road) ready for development that are 13 acres. There is great economy-of-scale opportunity here for Peebles to cross-market hotels, condominiums and apartments,” said Scoggins.
He believes some of the units at Las Palmas will be “condotels,” which are rooms in hotels sold individually to buyers who then rent them to other guests at least part of the year.
Grimm acknowledges the price of land on Paradise Road has increased considerably of late, “but we still think there’s value to be had if you take the long view. After all, Las Vegas is maturing into something beyond just a gaming destination.”
Scoggins and Atwell agree that while the costs of building residential projects on Paradise Road might seem prohibitive, the future looks promising.
“Look at the projects for Project CityCenter,” Scoggins said. “I shudder when I think of the $7.7 billion estimated construction cost. How much is that going to go into the local economy? How many people will that bring into this area? What will it do to land values?”
Atwell agrees that huge projects like CityCenter are helping to change Las Vegas into more cosmopolitan destination, and that land values in and around the resort corridor are going to continue to increase exponentially. “I see the whole area morphing in the next 10 years,” Atwell said, “into a corridor filled with mid-rise and high-rise mixed used developments.”