Nikki Beach site is going out to bid. Why do its owners still say the process is unfair?
The Miami Beach City Commission voted Wednesday to invite bidders to operate one of the most valuable pieces of land in South Beach, reversing their previous decision but still failing to satisfy the owners of the Nikki Beach day club that has leased the site from the city for decades.
In response to backlash from residents who called for a competitive process before the club’s lease expires in May 2026, commissioners rescinded their April decision to negotiate a possible deal with the beach concession company Boucher Brothers to manage the city-owned property.
“This is exactly the right time,” said Mayor Dan Gelber, addressing criticism that he and Commissioners Ricky Arriola and David Richardson are trying to expedite a deal before they are termed out of office in November. “The best idea, hopefully, will prevail.”
The vote was 6-1 to have the city issue a request for proposals no later than June 30 with a target date of June 15. Bidders will have 60 days to respond.
Commissioner Steven Meiner cast the lone “no” vote, advocating for a 90-day response period after city staff recommended additional time. City Manager Alina Hudak also said staff may need beyond June 15 to secure a property appraisal and an assessment of the facility’s conditions from a consultant.
“I just want a process that our residents can be proud of and say that that’s fair,” Meiner said.
The owners of Nikki Beach — which Jack and Lucia Penrod have operated under several names and iterations since the mid-1980s — still aren’t pleased. On Friday, they filed a lawsuit against the city and Boucher Brothers that accused city officials of executing a “backroom deal” with Boucher and called Richardson’s subsequent proposal for a competitive bid process “fundamentally flawed.”
The lawsuit points to the proposed accelerated bid timeline and the requirements for prospective bidders, including that they have at least five years operating a “beach establishment, beachfront concession or similar concession.” That stipulation, the Penrods say, is designed to narrow the pool of potential applicants.
“It’s another piece of evidence of the intentional lack of competitiveness of this project,” Phillip Hudson, an attorney for Nikki Beach, told the Miami Herald. “It’s not going to be fair and it’s not going to be competitive.”
Judge declined to block vote
At a hearing Tuesday, Miami-Dade Circuit Court Judge Lisa Walsh declined to grant a request by the Penrods to block the Wednesday commission vote on Richardson’s proposal, saying she would instead let the process move forward and hold a more detailed hearing on the club’s claims in the coming weeks.
The lawsuit argues that the city and Boucher should be held liable for various offenses, including alleged unregistered lobbying by Boucher in its interactions with Arriola.
Miami Beach City Attorney Rafael Paz said at Wednesday’s meeting that the Nikki Beach owners were “throwing mud at the wall and trying to get something to stick.”
“We were, quite frankly, perplexed by the many claims that were raised,” he said.
Miami Beach officials, following the lead of condo owners in the upscale South of Fifth neighborhood who want something new at the site, have blasted Nikki Beach as a bad neighbor in recent weeks.
“I’ve heard all sorts of stories about it over the years,” Richardson said. “I’ve publicly said I don’t want what is there now.”
The Penrods say they have been good operators who deserve to have their lease renewed. They agreed to stop playing loud music in response to neighbors’ complaints, according to Lucia Penrod, and close by 7 p.m. each night.
In their lawsuit, the Penrods accused city officials of making “defamatory” comments about their brand. Since opening the first location in South Beach, Nikki Beach has opened beach clubs in France, Spain, Thailand, Dubai, Italy, Montenegro and the Caribbean.
The stakes are high at the South Beach site, which Gelber described as perhaps “the best prime public property on the beach right now.”
Under their current lease, Nikki Beach makes annual payments to the city of 6.5% of gross receipts, an arrangement city officials have criticized as a sweetheart deal. The day club also has a concession agreement to operate on the beach next to the club at 1 Ocean Drive, one of the few remaining pieces of Miami Beach where Boucher does not have a deal to plant its chairs and umbrellas.
Bidders to take over the site in 2026 can propose a lease agreement, a concession agreement, or some combination for a term of up to 30 years. The city charter requires a voter referendum for the city to lease any waterfront or park property for 10 years or more.
Boucher Brothers has engaged with Major Food Group, a high-end restaurant company that includes Nikki Beach’s next-door neighbor, Carbone, about potentially putting a restaurant at the site.
That idea faced scrutiny last weekend after several Miami Beach elected officials were seen attending the swanky Carbone Beach dinner party put on by Major Food Group and Boucher Brothers during Formula One weekend.
The Nikki Beach brand started in 1998 as a quiet garden by the ocean, named Nikki Café to honor Jack Penrod’s daughter, Nicole, who died in a car accident when she was 18. That later became Nikki Beach, which revolutionized “day club” culture in the area.
This story was originally published May 17, 2023 at 1:18 PM.
