Peebles Acquires 87 Acres for Luxury Oceanfront Development
By Brian K. Miller
August 22, 2005 08:14am

PACIFICA, CA-Peebles Atlantic Development Corp. has acquired 87 acres of oceanfront here with plans to seek entitlements for a low-density, high-end mixed-use development. Plans for the former rock quarry located 15 minutes south of Downtown San Francisco include a luxury hotel, resort and residential uses with an expected sellout of nearly $1 billion.


The first step was acquiring the land, which PADC did using a $16.5-million non-recourse loan from North American Capital Advisors of Miami. NACA president Michael Browarnik says the financing represents 90% of the cost to acquire the land as well as all the predevelopment costs required to attain the necessary entitlements prior to breaking ground. The sale closed about 10 days ago.


PADC chief and business mogul R. Donahue Peebles tells GlobeSt.com he acquired the land for “just under $8 million,” which is a steal compared to the $20-million-plus he says Trammell Crow was under contract to pay for the property back in 2000. The seller in both instances was William F. Bottoms, who owned this and several other rock quarries.


“TCC went through the first phase of obtaining entitlements for an all-residential project but eventually decided to abandon the effort,” Peebles says. “We began negotiating with Mr. Bottoms after that and, subsequent to his death, began negotiating with his estate, the Bottoms Family Trust, which was looking to liquidate more quickly. We understand our lender’s appraisal came back at significant multiples of our purchase price.”


The property sits between the main highway and the ocean. PADC envisions the development as “extremely low density,” with the residential units “extremely exclusive” and the hotel “five-star.”


“What we are looking at is single-family homes, a luxury hotel, some condominiums and some retail on a portion of the site close to the main streets,” Peebles says. “We could build over 2.2 million sf of commercial on the property, but we’re going to do significantly less than that in order to have a lot of open space; it’s good for the environment and consistent with our want to have far more quality than quantity.”


Peebles says the hotel will have 200 to 300 rooms and there will be about 300 units of housing, about half single-family and half multifamily (most likely condominiums). The single-family homes will sell for between $3 million and $8 million, he says.


“The closest thing to what we are going to do is Half Moon Bay,” he says. “The difference is Half Moon Bay is a ways off the ocean; our property will on a bluff right above the ocean, providing fantastic views of the Bay and Downtown San Francisco.”


The current retail plan calls for about 160,000 sf of boutique retail and restaurant space in smaller buildings. “We’d like to take the main shopping corridor that runs parallel to the ocean and just extend it into our site,” he says. “It will be similar to Carmel by the Sea.”


Peebles says the property abuts a public golf course that is owned and operated by the City of San Francisco. “We are going to work with the City of Pacifica to obtain a management contract and restore the course and use it as more of an attraction to the area,” Peebles says. “It’s a beautiful course that runs right along the Pacific Ocean.”


Peebles estimates the total development cost at about $500 million. He expects the entitlement process to take between 18 months to two years. The first phase will likely consist of the residential and hotel uses, he says.


“We’ve already has meetings with the Sierra Club and other environmental groups and have engaged in extensive talks with the city,” he says. “We also will be working closely with the California Coastal Commission, the Environmental Protection Agency and residents to create a development plan that is “mutually beneficial.”


Established in 1987, PADC is a real estate development company specializing in luxury hotel, residential and office projects. The company has $1 billion worth of developments under way in Washington, DC, Miami and Detroit. The Pacifica development is part of business mogul R. Donahue Peebles’ plans to establish a major presence on the West Coast. The Pacifica Property marks the company’s first West Coast acquisition. Other acquisitions are in the works.


Peebles tells GlobeSt.com he is under contract to purchase a Downtown San Francisco office building in the heart of south of Market District that he plans to demolish in favor of a luxury 50-story retail, office and residential tower. He expects to close on the site by early fall. As well, he says there's a well-known San Francisco hotel he’d like to acquire. Beyond the Bay Area, he’d like to explore opportunities in Los Angeles and Las Vegas, he says.


www.globest.com/news/353_3...7508-1.html