America’s Largest Black Developer Sets Sights On Philly Casino

Donahue Peebles
Donahue Peebles

As owner and chief executive of one of America’s largest African American real estate development company, R. Donahue “Don” Peebles has an impressive resumé.

The multibillion-dollar portfolio of the Peebles Corp. includes luxury hotels, high-rise apartment buildings, and Class A office space in Washington, New York, Las Vegas, and Miami. Missing from that list: a casino, though he has made close-but-no-cigar efforts in Atlantic City and in Yonkers, N.Y.

Which is why Peebles now has his sights firmly set on landing Philadelphia’s second casino license, should it be allowed to stay in the city.

“If you look at Philadelphia, and if you say, ‘There’s no room for another casino,’ that’s like saying, ‘There’s no room for another hotel,’ ” said Peebles, dressed in a dark designer pinstripe suit and blue silk tie.

“Sure, there is.”

Peebles, 52, the grandson of a hotel doorman, said he’s been interested in building a hotel in Philadelphia since 1997, and now he sees a casino as a means to that end. A beachhead in this city also will strengthen his company’s growing presence on the East Coast, “the Amtrak corridor,” as he put it.

“Philly gets lost between New York and D.C.,” he said. “We need to give Philly a higher profile – a destination and a promoter of Philadelphia that says: ‘This is Philadelphia. . . . It’s culturally rich and every American should visit’ . . . by giving them one more reason to come and have something to do.”

In April, Forbes magazine ranked Peebles No. 10 among the wealthiest black Americans. (His estimated net worth was $350 million in 2009, the latest Forbes data available). He said he envisions a facility with a performing-arts component that would attract year-round tourists and bring in world-class performers, such as Lionel Richie or Alicia Keys, that would fill local hotels and attract people from this region as well as farther out.

As his team conducts due diligence on sites for a casino, Peebles said he has a few locations in mind in Center City, Northern Liberties and Old City, and along the Delaware River waterfront. Earlier this month, he met with Mayor Nutter, who wants the second casino license to remain in the city, despite efforts in Harrisburg to auction it off.

On May 2, House Bill 65, which would award the license to the highest bidder statewide, sailed through. But the measure, which starts bidding at $65 million, has yet to be heard in the State Senate.

“Nothing has changed,” Doug Harbach, spokesman for the Pennsylvania Gaming Control Board, said this week. “We continue to monitor this action but have not set a timetable to accept any applications.”

The investor group behind a Foxwoods casino proposed for South Philadelphia was stripped of the license by the gaming board in December 2010 after repeated delays in getting the project built.

“Our point of view is the state granted a second license in Philadelphia, and there have been people here who have expressed possible interest in pursuing that,” said Alan Greenberger, deputy mayor for economic development. “Our expectation is the state will initiate a process to take proposals and make this happen.”

In expressing his interest in the second casino license, Peebles joins high-profile local developers Bart Blatstein and Robert Zuritsky. (SugarHouse on Penn’s Landing, which opened in September 2010, is the only casino within the city limits.)

Zuritsky is president of Parkway Corp., which owns mostly parking garages and is behind a new hotel rising at 12th and Arch Streets, across from the Convention Center.

“We are not ready to talk about it,” Zuritsky said of his casino project and its location. “There is some interest from some parties, and we are just starting to talk. I think I have the best site, which is in a Center City location. We could do a hotel.”

Blatstein, who has been on a redevelopment spree of North Broad Street, said he was forging ahead with plans for a $500 million casino hotel and entertainment complex with retail space at 400 N. Broad.

Blatstein said that he has been finalizing his plans with an architect and engineering firms, and that he hopes to have economic and traffic-impact studies completed by next week. He also has met with neighborhood groups and city lawmakers to sell them on his plan.

“It’s coming together very quickly,” he said last week.

Not to be outdone, Peebles said he brings vision, a track record of development success, and the ability to raise capital. He said that he was talking to potential equity partners and that he plans to launch a private-equity fund out of New York and Washington.

“A good project is going to get financed,” he said. “Where does it come from? Most likely New York.

“An all-gaming facility is probably not the way to go, but more mixed-use,” he said. “I am confident capital is not going to be an issue.”

In 2007, Peebles made his first Las Vegas investment, purchasing Las Palmas, a 13-acre apartment complex that he sold earlier this year. His Manhattan-based real estate empire plans to expand into gaming there by redeveloping the Mardi Gras Hotel & Casino.

Peebles went under contract in 2002 to acquire the site where the new Revel Casino now sits on the Atlantic City Boardwalk, but he ultimately did not buy it. In 2008, he was part of a team that won the right to develop what is now Aqueduct Racetrack & Casino in Yonkers; the license was rebid and won by another firm.

“We’re in the gaming business,” he said. “But I’m in the development and hospitality business. I develop to own,” including the Royal Palm Hotel in South Beach and a Marriott hotel in Washington.

Developer Peebles has also been an author, writing two books: The Peebles Principles, detailing his most memorable deals, and The Peebles Path to Real Estate Wealth, which outlines fundamentals to real estate investing.

Raised in Washington by a real estate agent single mother, Peebles said an internship on Capitol Hill as a page while in high school inspired a lifelong interest in politics. He serves on the National Finance Committee for President Obama and is on the board of the Congressional Black Caucus Foundation.

He left Rutgers University in 1979 as a premed student to become a real estate agent in D.C. He is the father of an 18-year-old son and a 9-year-old daughter and travels frequently to colleges to urge students, with an emphasis on minorities and women, to pursue careers in business and entrepreneurship.

“I try to teach my daughter that, in business, you get another chance,” Peebles said.

He views competition as a good thing. And should he win the casino license he seeks, his operation would face off not only against SugarHouse, but also Parx in Bensalem, the recently rebranded Harrah’s Philadelphia in Chester, and the Valley Forge Casino Resort (the state’s 11th) – which has prompted some to question the need for another casino here at all.

New York-based gaming analyst Greg Roselli, of UBS Securities L.L.C., said at this month’s East Coast Gaming Congress in Atlantic City: “Although the demographics are strong, judging from the recent share loss at Harrah’s Philadelphia over the past year, it doesn’t imply the need for a fifth property in the market.”

But Peebles, former board chair of the Greater Miami Convention and Visitors Bureau, believes that a world-class, big-ticket casino hotel like the Cosmopolitan in Las Vegas, the Sporting Club & Casino in Monte Carlo, and the Borgata in Atlantic City – which the state lacks – will attract tourists and conventioneers.

“We’re in the beginning stages of a real estate market that is now on the rise,” he said. “Philadelphia is an amazing place for tourism.

“Build the absolute best casino in Philadelphia, and have everyone step up.”