Here comes Miami Beach

Pub date August 29, 2006
WriterG.W. Schulz

A pebbled, unmarked trail crunches underneath Peter Loeb’s soft leather shoes as he walks through the Rockaway Quarry in Pacifica, his dog following behind.
Until recently, the 87-acre plot was owned by a man named William F. Bottoms. But he never showed much interest in developing it, and locals have long used the network of trails for hiking. It’s one of the few remaining vacant lots of its size in Pacifica.
Bordering the west side of the property is a ridgeline — a small stone peak literally cut in half by what was once a noisy limestone mining operation — that separates the Pacific Ocean from flat seasonal marshlands that turn to rolling hills just past the highway, where the property stops.
Like the rest of the small coastal town, the former quarry is submerged much of the year in a thick, fast-moving fog. From the ground, it hardly seems like an ideal place in which to introduce luxury living.
“It’s the windiest spot in Pacifica,” Loeb says. “It’s the coldest, windiest spot in the whole city.”
But its close proximity to San Francisco has a headstrong Miami developer drooling.
R. Donahue Peebles bought the quarry last summer for what he says was $7.5 million, and although he hasn’t actually submitted a formal proposal to the town, he’s talking about building 350 exclusive hotel suites, 130 single-family homes, more than 200 town houses, live-work lofts and apartments, and an untold number of stores, such as the Gap and Trader Joe’s.
It’s an unusual battle for the normally quiet town. Tucked 10 miles south of San Francisco just off Highway 1, Pacifica is a largely middle-class bedroom community of about 37,000 people that’s so overwhelmingly residential, it’s hardly seen any commercial development larger than a shopping center with a Safeway.
Loeb served on Pacifica’s City Council for eight years in the 1980s and has lived in the same home near the quarry for three decades. He helped formulate the land use plan for the property, which was designated a redevelopment area in 1986. The plan calls for mixed-use residential and commercial spaces, preservation of the walk and bikeway system, and “high-quality design in both public and private developments including buildings, landscaping, signing and street lighting.”
Joined by a stay-at-home dad named Ken Restivo, Loeb is now organizing the opposition to Peebles — and it hasn’t been an easy task. Peebles has already poured several hundred thousand dollars into a campaign to overturn a 1983 city law that requires voter approval of a housing element in the redevelopment zone. This in a town where the typical council candidate spends less than $10,000 running for office.
Of course, as the opponents point out, it’s not clear exactly what Peebles wants to do. His plans are still tentative; he’s trying to get blanket approval for a massive development before he actually applies for a building permit.
The point of the 1983 law was to ensure that new development on the property would be mixed-use, mostly to offset the city’s high residential concentration and to increase the amount of money the city received in tax revenue.
“What he’s trying to do is privatize the certainty and socialize the risk,” Restivo said. “He wants to know whether he can build the houses before he even starts with a plan, and he wants to leave us trusting him to do whatever.”
Measure L on the November ballot would give Peebles the right to include as many as 355 housing units in any final plan. But even if the bill passes, Pacifica’s City Council would get to negotiate and vote on any final deal with Peebles.
Peebles isn’t the first developer to spend a small fortune attempting to overcome the required ballot vote to develop housing on the quarry, which could attract buyers from all over the millionaire-heavy Bay Area. A similarly well-funded effort failed just four years ago.
The difference is, Peebles likes to win — and has proven before that he knows how to do it.
When it comes to commercial and residential development, Peebles is a prodigy of sorts.
At just 23 years old, after one year at New Jersey’s Rutgers University, the ambitious young man forged a relationship with Washington, DC’s infamous former mayor Marion Barry.
The returns were handsome. Barry appointed Peebles to a city property assessment appeals board membership, a sleep-inducing government function that is nonetheless among the most powerful at the municipal level. Peebles also counts the legendary former congressman and now Oakland mayor–elect Ron Dellums as a mentor; a teenage Peebles worked for him as a legislative page.
“Ron was an interesting person,” Peebles said in a recent phone interview. “One of the things I learned was that you can have your own ideas. He was a very liberal member of Congress. He got to chair two committees even though he was an antiwar person [during Vietnam], because he respected the process.”
After a short tenure on the assessment board, Peebles was developing thousands of square feet of commercial space across the nation’s capital under the Peebles Atlantic Development Corporation, today known simply as the Peebles Corporation. Eventually, an attempt to lease a multimillion-dollar office building to the city inspired accusations of cronyism, according to a 2001 Miami New Times profile. Peebles left Washington and moved to Florida.
There he indulged in the truest spirit of American affluence, putting together enormous hotels and condominium complexes, working in partnership with public agencies. He earned a reputation for resorting to multimillion-dollar litigation when those relationships went bad.
Peebles is well aware that major developments naturally attract conflict. He says it took him a while to become thick-skinned as a controversial developer. In south Florida, however, he proved skilled at getting cranes into the air, completing a $230 million residential tower and a $140 million art deco hotel in Miami Beach during the first half of this decade.
And now he’s set his sights on the low-density, small-scale town of Pacifica.
“Pacifica is unique in many ways, but politically it’s not,” he told the Guardian. “If you look at any city, small or large, it always has people on both sides of the issue. There are people who like to say ‘no’ a lot. [In] most environments — if you look by and large across the country, DC for example — developers are generally not the most popular all the time. Pacifica is not different politically in that regard from other places.”
Press accounts depict Peebles as highly self-assured, even cocky. He once cited his favorite saying to the San Francisco Business Journal as “Sometimes you have to be prepared to stand on the mountain alone.” But he’s also charming and enthusiastic, something that Loeb admits has won Peebles the hearts of many Pacificans.
“The comments we get from people who have seen him speak is, ‘I was soooo charmed by him. I trust him,’” Loeb said. “On the basis of what?”
Restivo chimed in, “He’s a very charismatic speaker. He makes promises and gives voice to people’s fantasies and wishes.”
Pacifica isn’t technically the first place in California where Peebles has attempted to introduce his version of the East Coast’s taste for high-rise condos and hotels. In 1996 a bid to redevelop the old Williams Buildings at Third and Mission in San Francisco crumbled when the partnership he’d created with Oakland businessman Otho Green turned into a civil battle in San Francisco Superior Court. The two couldn’t agree on who would control the majority stake, and another bidder was eventually chosen by the San Francisco Redevelopment Agency. Peebles and Green later settled a $400,000 dispute over the project’s deposit, according to court records. Green, in fact, alleged in a complaint against the city that Willie Brown had him kicked out of the deal.
The 1996 fallout notwithstanding, Pacifica marks the first time Peebles has actually bought land on the West Coast for development.
And he’s using a proven political tactic to win over hearts and minds: fear.
The quarry is still zoned as commercial land, and if Measure L fails, Peebles reminds Pacificans, he could go to the city council with a proposal that strictly includes retail and office space.
In a letter he circulated to the city’s residents, he warned that the alternative to a plan that includes housing could just as easily be a Wal-Mart.
“Your ‘yes’ vote means we will have an opportunity to study and evaluate a better option for our community,” Peebles wrote in the letter. “A ‘no’ vote means we would be forced to file an application for a large scale commercial development such as a big box or a business/industrial complex.”
But a plan that exclusively contains commercial space doesn’t appear to be what Peebles really wants. Despite the fact that Pacifica is hardly the type of crony-driven city that he’s used to, he’s shown that he’s willing to pay what it takes to get his housing element.
In a six-month period, the political action committee that he formed to push through Measure L spent more than $163,000, according to campaign disclosure forms kept in Pacific’s tiny, half-century-old City Hall, which sits close to the ocean amid a neighborhood of clapboard beach houses.
Nearly $90,000 went to a Santa Barbara public relations firm called Davies Communications, whose clients range from schools and major oil producers to Harrah’s Entertainment and the Nashville-based privatization pioneer Hospital Corporation of America.
Two user profiles under the names “Jimmy” and “Susan” surfaced on a Google message board where the development has been discussed, and they link back to a Davies mail server in Santa Barbara. Jimmy and Susan claimed to be Pacifica residents in favor of Peebles’s plan. (A call to Sara Costin, a Davies project manager who’s been present at some of the community meetings, was not returned.)
Peebles spent $10,000 more on the influential Sacramento lobbying firm Nielsen, Merksamer, Parrinello, Mueller and Naylor, which specializes in passing ballot measures. Another $70,000 went to professional petition circulators who were needed to get the measure on a ballot.
Peebles isn’t the first one to bring big money to the city. Four years ago the publicly traded Texas developer Trammell Crow Company spent $290,000 just on election costs in an attempt to get a mixed-use development with housing past Pacifica voters, according to public records. The company’s plan for the quarry included 165,000 square feet of retail space, over 300 apartments and town houses, and a town center. The late 2002 ballot measure still lost by over 65 percent of the vote, despite the fact that the opposing political action committee, Pacificans for Sustainable Development, spent just $6,500.
An Environmental Impact Review released at the time suggested the wrong type of development could threaten the habitat of an endangered garter snake and a red-legged frog, both known to be living in the area. The lush Calara Creek, which runs the length of the property to the ocean, was also perceived to be in danger of pollution runoff without the proper setbacks. And traffic mitigation on Highway 1 has remained a top concern of the city’s residents.
Peebles insists he’s identified state money that can help with widening the highway and says he’d also donate land for a library and new city center. Beyond election costs, Peebles says he’s spent hundreds of thousands of dollars on experts who’ve helped him craft a better plan that promotes sustainability compared to what Trammel Crow had to offer.
“I’ve had an environmental consulting team and contractual consulting team for the last year analyzing this property, analyzing these issues that are necessary,” he said.
Affordability is another matter, however. Peebles has suggested to the business press that single-family home prices on the land could range from $3 million to $8 million.
A mixed-use development on the land could still bring millions of new tax dollars to a city that has struggled in the past to find money for emergency services and even basic public works projects.
Loeb and Restivo haven’t been without their own rhetoric in the debate. They started a Web site,, which prophesies a nightmare traffic scenario on Highway 1 where it bottlenecks into two lanes through town. They add that estimates on potential tax revenue are unreliable without a definite plan.
But their group, Pacifica Today and Tomorrow, has hardly spent enough to even trigger disclosure requirements. And Pacifica remains a modest world, far removed from Miami’s glass-and-steel monoliths. Only a man with an ego equal to the size of his development dreams would try to so dramatically alter Pacifica’s topography. Peebles says he’s confident he’ll prevail in November.
Loeb and Restivo recognize that the area won’t stay empty forever, and they aren’t opposed to all development. Restivo told us he’d be more than happy to consider a commercial and residential project on the site — “but ideally it’d be much smaller.” SFBG