R. Donahue Peebles, the D.C. native who became one of the country’s best-known real estate developers and political fundraisers, has been selected by Mayor Vincent C. Gray (D) to build a 200-room hotel and 60 residential units on city-owned property in Mount Vernon Triangle.

Peebles beat out nine other companies for the project. His selection quickly drew criticism from some neighbors of the site, who preferred competing proposals.

D.C. native and real estate magnate Don Peebles (THE WASHINGTON POST -NIKKI KAHN)

After growing up in D.C., Peebles did his first real estate deal in Anacostia with then-mayor Marion Barry. He then grew his Peebles Corp. into one of the country’s largest African American-led development firms, with headquarters in Miami Beach and properties in Florida, New York, Las Vegas and California.

Gray said he chose the Peebles team, which also includes the D.C.-based Walker Group, because the partners offered the most money for the land.  The other three finalists included proposals from Akridge, JBG and CSG Partners.

“The Peebles Corporation and Walker Group will transform this valuable site into a thriving and productive asset that will serve the District of Columbia and beyond,” Gray said in a press release. A spokeswoman for deputy mayor Victor Hoskins declined to provide the dollar amount Peebles offered.

In his presentation to residents, Peebles promised that the project would create 900 construction jobs, 400 permanent jobs and work with Hospitality High School to transition D.C. youth into jobs at the hotel. Peebles also offered to build affordable housing as part of the project, but he said he would build the units east of the Anacostia River, rather than in the Mount Vernon Triangle neighborhood.

The developer issued a statement through a spokesman saying he was “proud to return to my hometown, the city that launched my career and served as the foundation for what is now the multi-billion dollar real estate portfolio of the Peebles Corporation, by bringing a transformational development project that will serve as an economic engine for permanent jobs and opportunities for the city’s youth as well as minority- and women-owned businesses.”

The Peebles proposal for city-owned land at 5th and Eye streets. (Courtesy DMPED)

Some neighbors preferred plans by other companies. After hearing proposals from four development teams named finalists for the site, members of the Advisory Neighborhood Commission 6E in February offered their preferences for the teams and none ranked the Peebles team first.

“I’m so terribly upset about it,” said Marge Maceda, a member of the ANC, shortly after the selection. “I just really feel like this neighborhood doesn’t need another hotel.”

Another commissioner, Rachelle P. Nigro, said in an e-mail that she was disappointed. “I was behind Akridge,” Nigro said.

Here’s a tally of the ANC preferences:

(Courtesy ANC 6E)
(Courtesy ANC 6E)

A spokesman for Peebles, Asher Corson, said that although the ANC hadn’t gone to bat for the project, other neighborhood groups had, including a condo association and parents’ group. “The ANC preferred plans by other companies but from our perspective there was an outpouring of support for the project,” Corson said.

Peebles was one of the most generous funders of Gray’s 2010 mayoral campaign. Angered by former mayor Adrian Fenty’s management of the city and having been passed over by Fenty to develop the former Stevens Elementary School in the West End, Peebles considered running against Fenty himself before deciding instead to contribute nearly $100,000 to help Gray defeat him. 

An outside political group largely backed by Peebles, for instance, distributed mailers aimed at persuading African-American voters not to support Fenty. Gray spokesman Pedro Ribeiro pointed out however that many of the competing companies and their executives wrote campaign checks.

“Mr. Peebles’ political contributions had nothing to do with this selection,” Ribeiro said.

Executives at Jefferson Apartment Group, which partnered with Akridge to bid for the project, issued a statement saying  the were “very disappointed and shocked by the news” of the selection.

“Our joint proposal ambitiously met the clear goals in the initial [project solicitation], while simultaneously gathering key support from the ANC,” the company said.

An earlier version of this story included the incorrect headquarters location for the Walker Group. It is based in D.C., not Bethesda. The story has been updated. 

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz