Miami Beach officials are probably wishing they could hit “unsend” on a two-year-old group chat that could boost Nikki Beach Club’s owner’s claims of favoritism against the city.
Penrod Brothers, led by Lucia Penrod, widow of the firm’s late founder Jack Penrod, has a pending lawsuit against Miami Beach. Penrod seeks to overturn the awarding of a new contract for the city-owned property at 1 Ocean Drive that is home to Nikki Beach Club. The 2023 complaint, filed in Miami-Dade Circuit Court, also names Penrod’s rival, Boucher Brothers, as a defendant.
A bid by Boucher and Major Food Group won the city’s request for proposals, and the joint venture is set to take control of the property at 1 Ocean Drive next year when Penrod’s current ground lease expires.
But dozens of texts by city staffers, recently released via the discovery process, could help Penrod bolster its case that Miami Beach officials violated procurement rules and showed bias in selecting a new operator.
A text conversation on Sept. 2, 2023 between ex-Miami Beach City Attorney Raul Aguila, current city attorney Ricardo Dopico and chief deputy city attorney Nicholas Kallergis stands out.
The thread begins with Aguila texting his former colleagues a link to a Miami Herald article detailing how Miami Beach rejected Penrod’s bid because it was submitted 15 minutes after the city’s deadline. “How STUPID are they???” Aguila wrote.
“I’d hate to be the dumbass who waited until [2:59 p.m.] to submit. Imagine there’s a malpractice claim there,” Dopico responded.
“I’m having multiple orgasms just thinking about it. You guys have all the fun!!!!!!,” Aguila replied.
“Omg for sure that kid is fired,” Kallergis texted.
“What a fitting denouement for the Penrod’s saga!” Aguila shot back.
Aguila, who retired from the city in 2022, Dopico and Kallergis did not respond to requests for comment about the texts, which were first reported by Miami New Times. Daniel Hanlon, a lawyer representing Boucher, did not respond for comment either. A Miami Beach spokesperson declined to comment.
Printouts of the text messages were provided to The Real Deal by a Miami Beach resident who requested anonymity.
In an emailed statement, Penrod said it sought court intervention to “require the city to hold a fair and lawful process for this public land.”
“Former city leaders violated laws requiring public competition which led to the challenge we brought,” the statement said. “We believe our position is supported by clear law and overwhelming evidence.”
City officials faced intense public scrutiny over their handling of the 1 Ocean Drive property’s future. Penrod has controlled the property since the 1980s via its ground lease, and the firm launched Nikki Beach Club in 1997. The name is in honor of late Jack Penrod’s daughter Nicole, who was killed in a car accident the same year the venue was renamed from Penrod’s on the Beach.
In April 2023, the Miami Beach City Commission initially voted to negotiate a no-bid deal with Boucher, which provides beach concessions under a separate city contract, and Major Food Group, the New York-based hospitality firm that owns Carbone and other high-end restaurants.
A month later, commissioners reversed their decision after a wave of public backlash, and voted for a competitive bid process that Boucher and Major Food Group subsequently won. The joint venture is getting a 10-year lease that the city claims will pay Miami Beach $41 million over the life of the agreement.
During the discovery process, Penrod also previously obtained emails showing then-Mayor Dan Gelber, then-Vice-Mayor Ricky Arriola and city staffers regularly hit up Boucher and Major Food Group principals for beach chairs and dinner reservations.