July 19–Six years after he called investing in the property one of his worst business decisions, South Florida real estate mogul R. Donahue Peebles appears set to finally move forward with a hotel redevelopment at the former Ramada site near mile marker 54 in Marathon.

Doing business as Key Colony Bay Development LLC, Peebles Corp. is scheduled to present his plans for the hotel, with up to 109 rooms, at Monday’s advisory Planning Commission meeting.

The roughly five-acre property on the oceanside of U.S. 1 would feature roughly 8,632 square feet for a continental-breakfast seating area, offices, meeting rooms and an exercise facility.

Upper Keys attorney Nick Mulick, who represents Peebles, said the hotel would have one-bedroom units.

That’s in stark contrast to original plans for a luxury residential resort called Manoir Resort Villas, which was planned as 72 furnished waterfront vacation homes, each with a private elevator and roof terrace, priced from $1.8 million.

“We haven’t yet been in contact with a specific franchise, but the proposal is to essentially develop a boutique resort,” he said. “The market seems to be favoring more traditional-sized units.”

Peebles told www.Forbes.com in a 2008 interview that he “overpaid for the land and I knew it” when he bought it for $28.3 million at the height of the real estate boom in 2007.

When the economy took a turn for the worse, project financing fell through and Peebles ended up in a long-running foreclosure case with New York-based iStar Financial Inc.

“There was some litigation pending that made it virtually impossible to move forward. It was settled and the property was returned,” Mulick said.

Peebles Corp. had a nine-year development agreement for Manoir Resort approved by the City Council on Sept. 29, 2007, but that would be void due to major changes to the project. Monday’s hearing is for a new conditional-use permit and development agreement.

City Planning Director George Garrett said the new project is “very similar” to the former Ramada in terms of its layout.

“They’re going to knock the building down and do it again, because the footprint is basically the same,” he said.

Mulick said Peebles plans to pursue a portion of the 35 hotel room permit allocations remaining from 100 awarded to the city by the state Cabinet in 2012. Because the Keys are designated an Area of Critical State Concern, The Cabinet decides how many building permits are allowed to be issued in Monroe County each year.

The Peebles property has 80 transient-rental allocations attached to it. Mulick said “the number of units can be dictated by the cost. There’s an alternate plan to build less units [than the 109] if we can’t obtain the allocations.”