Developer claims conspiracy blocked Overtown deal
Four years after walking away from a major redevelopment in Miami’s struggling Overtown neighborhood, prominent developer R. Donahue Peebles is now alleging he was pushed out of the project in a “conspiracy” cooked up by city Commissioner Keon Hardemon, a relative, other city officials, and a competing developer.
The startling and unsubstantiated claim is laid out in a 100-page lawsuit that Peebles and his partners filed against another prominent developer, Michael Swerdlow, who recently announced plans to build a massive commercial and residential project with a Target store on publicly owned vacant land in Overtown. Swerdlow’s company won a competitive bid from the city’s Southwest Overtown/Park West Community Redevelopment Agency to purchase one of two CRA-controlled lots that Peebles had planned to build on.
Peebles secured a bid in 2013 to develop the lots, but surrendered one bid in 2016 after failing to come to a development agreement with the agency. The
CRA then canceled his bid on the second, saying he had failed to meet deadlines, and sought new proposals for the property, known as Block 55. Peebles did not file bid protests at the time.
But in his suit, Peebles and his Overtown Gateway Partners, including Miami developer Barron Channer, claim Swerdlow secretly worked to block their development plans in a conspiracy with a group that included agency chairman Hardemon and the commissioner’s uncle, influential activist and consultant Billy Hardemon. The same group then conspired to award Swerdlow the new bid for Block 55, the suit claims.
The suit offers little proof for the claims.
Peebles, regarded as one of the leading AfricanAmerican developers in the country, is seeking $160 million for lost profits and damages. The lawsuit names only Swerdlow, his development company Downtown Retail Associ
ates, and partner Alben Duffie as defendants. But it says the Hardemons and others could be added as defendants and contends some of their actions could be criminal in nature.
Alan Kluger, an attorney for Swerdlow, called the claims by Peebles and Channer baseless.
“Like many lawsuits filed by Don Peebles over the years, this claim is without merit,” Kluger said in a statement. “Peebles and Barron Channer made an early attempt to develop the Block 45 and Block 55 sites in 2013, but they were unable to fulfill their obligations to the Overtown/Park West CRA and their plans were ultimately terminated. The CRA then undertook a public RFP process, which Downtown Retail Associates undisputedly won. Seeing that Peebles and Channer have no legitimate claim against Downtown Retail Associates, their 11th hour attempt at litigation is nothing more than a brazen act to extract dollars from the pockets of Block 55’s development team.”
In an email, Commissioner Hardemon said he played no role in the failure of Peebles’ plans.
“The CRA has partnered with many developers to produce thousands of units of affordability in Overtown,” Hardemon wrote. “Here, it seems that this developer failed to produce and wishes to place the blame elsewhere. I had no role whatsoever in the demise of their development plan. I remain steadfast in elevating the quality of life for the residents in Overtown and look forward to the communities advancement.”
Billy Hardemon expressed incredulity over the lawsuit and its timing in the middle of a virus pandemic, stressing that he had publicly supported Peebles’ development plans in Overtown. He said he also vocally supported Peebles’ earlier, successful bid from the city of Miami Beach to develop the Royal Palm Crowne Plaza Resort on Collins Avenue as a convention hotel to end a three-year boycott by black tourists. But the project led to years of legal disputes between the developer and the city before Peebles sold it to a white-owned development group in 2004.
“I’ve always admired
Don Peebles,” Billy Hardemon said. “I was a foot soldier in the campaign for him getting that hotel. I have nothing but respect for Don Peebles.”
But, he said of the lawsuit: “Its such a damnable lie. It’s ridiculous. The only reason they’re putting Keon’s and my name in it is to get this into the Miami Herald. This guy is telling a bald-faced lie to cover the failure of his deal. Everyone is focused on the pandemic and these guys, God bless, they’re focused on money.”
It’s not the first time that someone has claimed that the Hardemons have acted in concert to influence city actions.
In a 2019 lawsuit, accountant Michael Siegel claimed the Miami commission took away his right to erect giant advertising murals on a building next to Interstate 95 that’s owned by his family after he declined to hire Billy Hardemon as a consultant. That suit is pending.
The Peebles suit and the virtual shutdown of business because of the coronavirus pandemic might jeopardize the Swerdlow project, which had been hailed as a major breakthrough in efforts to bring new residents and economic vibrancy to the heart of long-suffering Overtown.
The suit was filed March 26 in Miami-Dade Circuit Court, three days before Swerdlow was scheduled to close on the purchase of Block 55. The closing did not take place, a spokesman for Swerdlow said. Sometime before the suit was filed, developer David Martin of Terra Group, who had joined the Swerdlow project as a partner, pulled out for unknown reasons.
The Peebles suit stems from years of fitful, partially successful efforts by the Overtown CRA, which was set up to help revitalize the historically black neighborhood, to redevelop several large vacant lots just east of I-95. After Peebles won a competitive bid to develop one set of properties, the CRA — chaired at the time by then-Commissioner Michelle SpenceJones — persuaded the developer to split that project with the second-ranked bidder, All Aboard Florida, the parent company of the Brightline train service.
But while All Aboard built a new office headquarters and parking garage on the site, Peebles’ plans for the lot next door foundered. When Peebles signed a letter giving up his right to develop the property, Channer said the developers could not come to an agreement with the CRA. The agency’s then director, Clarence Woods, said Peebles had been unable to obtain financing, a claim that the developers did not dispute.
That lot was owned by Miami-Dade County, which took back control after the Peebles plan failed. It was recently awarded to another developer for a project.
Peebles also won a bid for a second lot, Block 55.
In their lawsuit, Peebles and Channer contend that after Keon Hardemon was elected to succeed SpenceJones, he and his uncle recruited Swerdlow and Duffie and, by continually delaying needed approvals, forced Peebles into a partnership with them. Billy Hardemon, the suit claims, was effectively running the agency “through shadow influence” through his nephew.
Peebles claims Swerdlow violated his agreement with his group and “defrauded” them by going behind their back, working with CRA officials to get them pushed out and gain sole control of Block 55, actions that the suit terms “possibly illegal.”