City rejects Nikki Beach bid to remain in South Beach due to missed proposal deadline
Miami Beach has rejected a bid by the owners of day club Nikki Beach to continue operating on city-owned property after its lease expires in 2026, saying the club failed to submit its bid documents through an online portal by a 3 p.m. Thursday deadline.
The development marks a strange twist after months of controversy over the future of the site, during which Nikki Beach owners Jack and Lucia Penrod have argued the city’s process was rigged against them. In May, the owners sued the city and beach concession operator Boucher Brothers, claiming city officials had decided prematurely to boot Nikki Beach from the site and bring in a joint venture by Boucher and Major Food Group.
City officials say it appears the club’s legal team failed to push a final submission button on bid platform Periscope, with records showing they took a step to “review offers” Thursday at 2:59:44 p.m. — 16 seconds before the deadline — but didn’t hit send on time.
Attorneys for Nikki Beach said in a letter to the city that they did submit before the deadline, blaming an apparent glitch in the system. About 15 minutes later, records show, a lawyer from the firm Stearns Weaver Miller sent city officials a link to the club’s bid documents via email. The firm also delivered a hard copy of the proposal to Miami Beach City Hall.
But city officials said that wasn’t enough, citing language in the request for proposals that says “hard copy proposals or proposals received through email ... are not acceptable and will be rejected.”
“Unfortunately, no bid was received from your firm in response to the RFP,” Chief Procurement Officer Alex Denis said in an email at 5 p.m. Thursday.
On Friday morning, the club’s attorneys wrote a letter to city staff and elected officials, saying the city had “refused inquiry into the platform error and declined to accept the bid.”
They added that the city had rejected their request for a one-day extension after a state of emergency was issued due to Hurricane Idalia, which knocked out power at Stearns Weaver Miller’s Tallahassee office.
“Penrod’s bid must be considered by the City,” the attorneys wrote. “We respectfully demand confirmation that the City do so.”
City Attorney Rafael Paz wrote back around 6 p.m. Friday, denying the day club’s appeal and saying “it appears that you ran out of time prior to completing the bid submittal process by the established deadline.”
The Nikki Beach team submitted a lengthier, formal bid protest less than three hours later.
“Even if the city maintains Penrod’s bid was untimely (it was not), it was an abuse of discretion and unlawful for the city to preclude Penrod from consideration based on what the city claims is unquestionably a minor and non-material timing issue,” the attorneys wrote.
“The city’s refusal to even evaluate Penrod’s bid in light of the significant material benefits it provides to the city and its residents would be a grave departure from the city’s obligation to act at all times in the best interests of the city,” they added.
Paz replied 17 minutes later.
“We already responded to this. This is Procurement 101,” he wrote. “Again, for the third time, you did not submit your proposal in Periscope by the deadline, as required by the RFP, and we cannot accept late submittals. Thank you and have a wonderful weekend.”
Representatives for Nikki Beach could not immediately be reached for comment.
Other bids
The city received four other bids to operate a “high-end beach establishment” at the oceanfront property at 1 Ocean Drive, which is among the most valuable properties in Miami Beach given its waterfront location at the city’s southern edge.
One submission came from Boucher Brothers, according to the agenda for an evaluation committee meeting on the proposals scheduled for Sept. 11.
Other bids came from Akerman and The Group US Management LLC, Restoration Hardware, and Tao Group Hospitality and One Ocean Hospitality LLC, the agenda shows. Details of the proposals have not yet been released.
Nikki Beach has become a popular South Beach destination and spawned other locations around the world since its lease with the city began in the mid-1980s.
But residents of the South of Fifth neighborhood, which has seen several luxury condo towers rise since the late 1990s, have complained over the years about the club’s presence and called for something new in its place.
The Penrods say they have listened to their neighbors, taking steps to limit noise and closing their doors at 7 p.m.
Still, city officials have said it’s time for change at the site.
In April, the Miami Beach City Commission voted to pursue a non-binding term sheet with Boucher Brothers for operation of the site, paving the way for a potential no-bid deal.
The move was met with public backlash, and commissioners walked back their April vote in May, directing staff to instead issue a request for proposals on the Nikki Beach property and adjacent beach area.
The Penrods have fought in court in the months since, with limited success. A Miami-Dade Circuit judge dismissed their lawsuit last month, calling their claims “speculative and unripe.” They filed an amended complaint this week.
The club owners also filed a formal protest of the city’s request for proposals, saying the process has been “marred by inappropriate political influence and preferential treatment of prospective bidders.”
City officials agreed to tweak one part of the bid language and extend a deadline to respond to late August, but otherwise shot down the day club’s claims as “factually and legally meritless.”
This story was originally published September 2, 2023 at 9:31 AM.
