A juicy lawsuit against the city of Miami Beach and Boucher Group over the redevelopment of a city-owned beachfront ended in a $3 million settlement, payable to the owner of Nikki Beach.
Boucher agreed to pay $1.5 million to Penrod Brothers to settle the lawsuit. The city agreed to pay $1.5 million, but Boucher will pay Penrod that amount directly, over time, in lieu of rent or concession agreement payments to the city, according to a news release from the city.
The lawsuit accused city officials’ of favoring Boucher Brothers and Major Food Group’s bid for the site. Boucher and Major Food Group plans call for opening a Mediterranean restaurant, Japanese restaurant, Sadelle’s and beach concessions on the site of Nikki Beach, which sits on city-owned land at 1 Ocean Drive.
The city awarded a no-bid contract in 2023 to Boucher and Major Food Group, the owner of Carbone, to replace the two-story Nikki Beach building with a development called Boucher Brothers Pier Park. Residents were outraged at the ouster of Nikki Beach, operated for decades by Penrod Brothers’ Jack and Lucia Penrod.
That resulted in Miami Beach City Commission members rescinding their votes for Boucher and opening bids for the right to develop the land, where Nikki Beach’s lease was set to expire this year.
A few firms submitted proposals, but Penrod’s wasn’t accepted because it was filed 15 minutes after the deadline.
It was no surprise that Boucher won the contract.
The subsequent lawsuit alleged the city and Boucher violated city laws, including illegal lobbying and defying open bidding processes.
Boucher was accused of arranging a backdoor deal with city commission members years before the Nikki Beach lease was set to expire.
The suit revealed messages between then-Vice Mayor Ricky Arriola, who was serving his last term on the city commission at the time. The texts showed Arriola asked Boucher and Major Food Group for beach chairs and dinner reservations, allegedly receiving preferential treatment at their properties. He was accused of accepting a $3,000 ticket to a Major Food Group beach event for free.
The case also turned up salacious text messages about Penrod between lawyers in the city attorney’s office.
The settlement, reached through mediation, ends the three-year dispute and clears the slate for Boucher and Major Food Group to pursue its redevelopment. Penrod’s lease will end next year.
Boucher was given an extension to its development timeline and a five-year lease extension option as part of the settlement.
The joint venture between Boucher and Major Food Group has proposed a 10-year lease deal and concession agreement with the city worth $41 million.
The redevelopment will include restaurants and bars, a pool and retail pavilion, upgraded cabanas, a children’s center, a wellness space and a public restroom, according to a letter of intent and renderings filed with the city in March.
The renovations include wheelchair accessibility to the public beach. The proposal includes funding for two police officers and a park ranger as well as priority access and discounts for Miami Beach residents, provided through an app.
Boucher will also agree to partner with the Miami Beach Senior High School culinary arts program, make annual donations to every public school in Miami Beach, host 12 resident-focused events per year and provide extensive beach cleanups.
Construction is expected to start next summer and wrap up in the fall of 2029.
Jack Penrod opened a beach club at 1 Ocean Drive in 1985. He and his wife renovated it in the late 1990s and renamed it Nikki Beach, in memory of their daughter who was killed by a drunk driver. Since then, Nikki Beach has expanded to operate 13 locations across Europe, the Caribbean, the Middle East, Asia and Africa, according to its website.
— Rachel Stone