RH, formerly known as Restoration Hardware, is making a strategic move into Miami Beach’s thriving restaurant and entertainment scene, earmarking a substantial investment of between $150 million to $170 million for the revitalization of the Nikki Beach Club, a city-owned establishment.
Headquartered in Corte Madera, California, RH, renowned for its high-end home furnishings, has expanded its scope to include hospitality development. It stands as one of four competing teams seeking to assume control of the Nikki Beach Club located at 1 Ocean Drive in Miami Beach. The victor will secure a fresh 30-year lease to oversee this city-owned venue once the existing operators, Jack and Lucia Penrod, conclude their tenure in 2026.
The intricacies of the four proposals will remain confidential, shielded by Florida’s public records law for a span of 30 days, as confirmed by Miami Beach spokeswoman Melissa Berthier. Nonetheless, RH opted to unveil their plans via an official press release on Wednesday.
The other contenders include Boucher Brothers, a company presently holding a city contract for beach concessions; Akerman and The Group US Management LLC; and Tao Group Hospitality alongside One Ocean Hospitality LLC, according to information presented in an online agenda for an upcoming Miami Beach committee meeting tasked with evaluating these proposals.
City officials have prevented the Penrods from submitting a proposal to retain control of 1 Ocean Drive by asserting that the couple’s entity, Penrod Brothers, missed the bid deadline by 15 minutes. In response, Penrod Brothers has lodged a petition in Miami-Dade Circuit Court, seeking a court order to reverse the city’s decision.
RH, under the leadership of CEO Gary Friedman, is putting forward a starting base rent of $7 million to the city, with an annual increment of at least 3 percent, amounting to a minimum of $333 million over the lease’s duration, as outlined in the release. The envisioned project would bear the name “RH Beach House at One Ocean Drive.”The proposal envisions a pair of low-rise buildings covering 16 percent of the 180,000-square-foot site, featuring two landscaped beach promenades, a 94,000-square-foot public park situated atop an underground parking facility, and a 17,000-square-foot public sculpture garden on an elevated platform, as described in the release. To address the concerns of neighboring condominium residents about potential disturbances from late-night activity and traffic, RH is suggesting restricted operating hours.
RH’s capital investment includes $50 million earmarked for public benefits. Additionally, the proposal offers the city a $5 million upfront payment to offset lost rent and taxes over a two-year construction period, along with a $1 million “cultural contribution,” according to the release. RH asserts that the new project will also generate approximately $100 million in property, hotel, and food and beverage taxes over the lease’s duration. The proposed structure at RH House is set to encompass a beach club, a bathhouse and spa, three food and beverage venues, a design studio, a library, and art galleries, according to the release.
Having managed 1 Ocean Drive for decades, the Penrods began to relinquish control of the city-owned property in late April. At that time, Miami Beach commissioners authorized City Manager Alina Hudak to engage in negotiations for a non-binding term sheet with Boucher Brothers to oversee the site once Nikki Beach Club’s lease concludes in 2026. A month later, following public outcry over perceived favoritism, Miami Beach commissioners rescinded their decision and opened up a competitive bidding process for a new lease.
