In spite of opposition from local residents, Miami Beach officials narrowly greenlit a proposal by Boucher Brothers and Major Food Group to assume control of the Nikki Beach Club site in the city’s South of Fifth district.
During Thursday night’s city commission meeting, the vote was split 4-3 in favor, granting City Manager Alina Hudak the authority to negotiate a new 10-year lease with the joint venture. This arrangement will come into effect once the existing agreement with current operators Jack and Lucia Penrod expires in 2026.
This decision marks the conclusion of a contentious procurement battle that commenced in April. Initially, city commissioners awarded Boucher Brothers, based in Miami Beach, a no-bid term sheet for Nikki Beach Club. However, the city commission later rescinded this decision due to resident complaints, opting for a competitive bidding process instead.
Commissioner David Richardson, who voted in favor, emphasized the fairness of the process, asserting that the recommended operator, with a longstanding record, had been a responsible entity for many years.
Boucher Brothers, renowned for beach concessions in Miami Beach, and Major Food Group prevailed over proposals from The Group, RH (previously Restoration Hardware), and Tao Group Hospitality.
However, the Penrods have initiated a lawsuit against the city, alleging a breach of procurement rules in their initial selection of Boucher Brothers and for rejecting their proposal based on a 15-minute delay past a city-imposed deadline.
Commissioner Steven Meiner, who voted against, criticized the process, highlighting its flawed inception and the subsequent controversy that clouded proceedings.
Mayor Dan Gelber and commissioners Ricky Arriola and Kristen Rosen Gonzalez joined Richardson in support of Boucher Brothers and Major Food Group. Commissioners Laura Dominguez and Alex Fernandez sided with Meiner in opposition.
Boucher Brothers and Major Food Group have proposed annual payments equivalent to 10 percent of the projected new beach club’s gross operating revenue, amounting to $4 million per year. These payments will escalate by 3 percent annually, resulting in approximately $41 million for Miami Beach over the 10-year term.
The joint venture plans a $26 million renovation of the existing building, including a pool, wellness center, spa, a designated area for children, and a beach concession space. Additionally, the proposal encompasses Sadelle’s, an all-day dining establishment by Major Food Group.
RH CEO Gary Friedman expressed reservations about the rapid selection process, anticipating continued uncertainty due to pending litigation and the existing lease with more than two years remaining.
RH’s proposal offered the city the highest guaranteed rent: a minimum of $333 million over a 30-year lease, along with a proposed investment of $150 million to $170 million in redeveloping the existing structure.
The Group, a New York-based hospitality company, put forth a plan to replace Nikki Beach Club with a $36 million three-story restaurant and cultural theater, a beach concession area, and a wellness-focused “lagoon.” Their offer included $3 million in annual rent, increasing by 10 percent every five years for a 30-year lease.
South of Fifth residents like Paula Allen criticized the hasty decision, questioning the rush to award Boucher Brothers the contract. They expressed concerns over transparency and clarity in the selection process.
