Don Peebles of the Peebles Corporation, America’s largest African American-owned development company, has well and truly planted his flag in Manhattan. Peebles moved with his family to the city last year to oversee his company’s entry into the New York market, where it plans to make a name for itself by building iconic developments in emerging neighborhoods.
Based at 600 Madison Avenue, the firm has begun scouting what will be its first few Manhattan projects. In addition to a Financial District condominium, Peebles has submitted a proposal to the city’s Economic Development Corporation for the disposition of three city-owned office buildings in Lower Manhattan. Vornado Realty Trust, Toll Brothers and Kushner Companies have all toured the 750,000-square-foot, three-building package at 346 Broadway, 49-51 Chambers Street and 22 Reade Street, which the city will sell in an effort to consolidate its spaces, according to a request for proposals it issued in April.
Today, Peebles talked to The Real Deal about another prospective deal his company is hoping to make in West Harlem. The Peebles Corporation has submitted a proposal in response to a Request for Expressions of Interests (RFEI) from the city in June for a Harlem development site. The 13,500-square-foot site, where there is currently a BP gas station, is situated at 2040 Frederick Douglas Boulevard, at the northwest corner of Central Park.
What has attracted you to this particular site in West Harlem?
I was drawn to the site from the moment I began really focusing on Manhattan. In the last market cycle, Harlem began to get a lot of attention because of the relative affordability of land and buildings. Development has been pushed pretty much all the way south and now development and redevelopment are being pushed up north. The focal point for residential living is on Central Park. The site on Frederick Douglass Boulevard is prominent. It’s completely underutilized. We approached the owner of the property months ago, well before the city even talked about doing any [RFEI] for that site. I’m drawn to it because I see it as a gateway to West Harlem. It has great prominence on Frederick Douglass Circle. There’s not a building of any quality on that circle so this is a chance to transform that circle.
The city’s RFEI called for a residential development. What kind of residences are you hoping to build?
As a person who has children, my son and daughter went to school at 93rd Street and Central Park West at Columbia [Grammar and Preparatory School], I looked at apartments to be close to the school and many, many other parents do [the same]. What’s happening in Manhattan, especially along the park, is that prices for family-sized apartments are growing to a point where they’re even pricing out affluent buyers who have traditionally been able to buy apartments along the park. The circle, because of its prominence, warrants a landmark building so you can’t do affordable housing or 80/20 housing. We’ll build a residential building that will be for families or people who want larger apartments ranging from 3,000 to 6,000 square feet for the penthouse. We brought in Architectonica [to design the building.] The building will be about 80,000 square feet. There will also be parking and a fresh foods facility. We’re planning to build a building that would be just as appropriate at Columbus Circle and just as appropriate on Central Park South.
The RFEI also mentioned a community facility component. What do you have in mind?
We’ve had discussions with the Studio museum of Harlem to provide a gallery [on the ground floor.] [It's] an organization that showcases African-American art. Our aim is to bring a cultural arts facility that will attract visitors from all over the globe to come to this location. We want to attract people that will infuse dollars in the community there.
Is there a lot of competition for the site?
There are other bids. There’s going to be competition but we’ve been competing in the public private process since the inception of the company. When I started the company in 1986, the first project we did was a public private partnership in Washington D.C., in an area similar to Harlem. We’re not afraid to go into an area whose best days are yet to come.
What kind of prices will you be looking at in that neighborhood?
The unit price will be starting in the mid-to-upper teens per square-foot. There are so many buildings that have, over the last market cycle, done pretty well but no one has really crossed $2,000 a foot. We plan to cross $2,000 a foot. I’m going to buy the penthouse because it’s close to where my daughter goes to school.
How much have you bid for the site?
We think that to build the project there will cost north of $100 million [including land acquisition costs].
Have you been looking at other projects on the park such as One Museum Mile for inspiration?
We moved to New York City last September. We looked at apartments all summer and through the early part of the fall. We looked at 1200 Fifth Avenue; we looked at 111 Central Park North; we looked at 1 Museum Mile. We’re going to build, without question, the most exciting building architecturally. If we are fortunate enough to be selected, we will build the best building north of 96th Street. We want to use this type of project to establish our reputation and our presence in the Manhattan market.
What other projects do you have in the pipeline in the city?
We bid on all three buildings in the civic center RFP: Broadway, Reade and Chambers [streets]. We’ve proposed an amazing hotel for [the site] on Chambers. Two of those three buildings are historic landmarked buildings. We’ve had significant experience converting landmark buildings to hotels. Whoever the successful bidders are, the city will go into contract with them before the year is out.
What have you learned about the New York City market?
About two years ago, we made a decision to really focus our energy on Manhattan. As a development company, we’re based in Miami but we’re a national firm and pride ourselves on doing business in great cities. What I love about New York City is, while you hear a lot about the New York families that are entrenched in this market, this market is very receptive to new ideas, new developers and new investors.
You mentioned recently that you might be planning another condo downtown. Can you reveal anything about that?
We’ll be announcing a project there very shortly, downtown in the Financial District.
You’re a big President Obama supporter. How do you think his 2012 campaign is looking?
If you look at [Obama's] first four years, he’s had a lot of success in areas that were important to the voters who elected him. He did many of the things he said he would do. We’re no longer fighting a war in Iraq, Osama Bin Laden was captured and killed, and we have a far better global relationship with countries around the world. He reformed health care. It’s a work in progress but it’s a positive step there. He stabilized the housing market. The fact that I’m talking about developing high-end condos in New York City is indicative of the fact that the housing market has stabilized in most major cities and continues to do so. He’s done a good job in many areas. Unemployment is very difficult though. There are still 20 million Americans looking for jobs, but that’s a function of the economy and what the president inherited.
Are you concerned that he’s falling behind Mitt Romney in terms of fundraising?
Fundraising is much more critical in political races to the candidate seeking to unseat an incumbent, a candidate looking to define themselves on a very broad basis. For President Obama it was very critical when he ran for the nomination to outraise Hillary Clinton. Money is not as critical for him [now]. American voters know who he is and know his record. He just has to remind people what he’s accomplished.