One afternoon in 2022, Lucia Penrod and her niece sat down for a late lunch at Contessa, a recently opened restaurant in Miami’s Design District, and ordered a bottle of wine. Less than an hour later, the server dropped the check and asked if they could move to the bar so the restaurant could be set for dinner.
“I’m like, ‘Why? I’m not moving. I have not finished my wine,’” Penrod recalls. The manager came over. When Penrod explained that she was the owner of Nikki Beach, a network of clubs and resorts around the globe co-founded by her late husband, Jack, she was allowed to stay. But, she says, she left the restaurant thinking, “Oh my God, these New Yorkers are trying to turn Miami into New York.’” What she didn’t know was that “these New Yorkers”—by which Penrod means the hospitality powerhouse Major Food Group (MFG), co-founded by Jeff Zalaznick, Mario Carbone, and Rich Torrisi—had their sights set on her own property.
Early the following year, one of Penrod’s employees said he’d been at a party where somebody who worked for Carbone told him, “We’re taking over Nikki Beach.” Penrod called the city the next day, and she was told that her lease, which was due to expire in 2024, might not be renewed. “I caught them,” Penrod says. “So they made everything extremely difficult for me.”
When Penrod threatened to sue, the city opened the lease up for bids. Proposals were due within 30 days, though the required financial documents can take much longer to produce.
As the August 31, 2023, deadline approached, Hurricane Idalia bore down on Tallahassee, where Nikki Beach’s lawyers were based. They asked for a one-day extension. The city said no. Nikki Beach nonetheless managed to pull everything together. But because it arrived seven seconds late, their proposal was rejected.
Another bid was submitted by RH, or Restoration Hardware, which proposed spending roughly $160 million on construction and promised to pay $333 million to the city over a 30-year lease. A third, more modest offer came from Boucher Brothers, a company that manages beaches for more than a hundred hotels along the East Coast.
One of Penrod’s employees had been at a party where somebody who worked for Carbone told him, “We’re taking over Nikki Beach.”
The Bouchers (James, Michael, Perry, and Steven) proposed a 10-year lease; $26 million spent on renovations; and a Sadelle’s, a brunch-focused MFG franchise. Under the deal, the Boucher brothers would pay the city 10 percent of their gross operating revenue, or at least $4 million per year, increasing by 3 percent a year. It was a fraction of the RH deal, but a committee tasked with reviewing the proposals favored the shorter lease from the Bouchers. In September 2023, the commission voted to approve the Boucher-Carbone proposal.
In a lawsuit filed against the city and the Boucher brothers, Penrod claims the bidding process was a sham. MFG isn’t a party in the suit, but the New York–based company is still a focus of it, with accusations that city officials took favors in order to get into the company’s Miami restaurants.
Text messages revealed during discovery showed what the Miami Herald called a “cozy relationship” between the Boucher-Carbone team and the city. Other publications were less delicate, with a Miami New Times headline highlighting one city official’s message about “having multiple orgasms” when Nikki Beach missed the deadline by seconds.
“The Prom Queen of South Beach”
Jack Penrod first came to Miami Beach in 1984, at the invitation of the city leaders. He owned a popular spring-break bar in Fort Lauderdale called Penrod’s on the Beach, and local officials hoped he might be able to lure young people to what was then known as “Bagel Beach,” full of fixed-income retirement homes. Miami Beach native Bruce Singer, the city commissioner who showed him around the boardwalk, said, “Hey, Jack, whatever you want, it’s yours.”
Miami Beach offered Jack Penrod a 40-year lease at 1 Ocean Drive, a 3.6-acre piece of city-owned land on the unloved south end of the island. In exchange, the city got a cut of the gross income, now at about $1 million a year. The beachfront bar he built quickly became a popular party spot, thanks to its cheap beer and ocean views.
When his 18-year-old daughter, Nikki, was killed by a drunk driver in 1997, Jack Penrod shut the place down for a year. Eventually it would reopen as Nikki Beach. The idea was to attract a more sophisticated—and responsible—clientele. He later added a restaurant upstairs, Pearl, that might have been the city’s first “clubstaurant.”
In 1984, he hired Lucia Hausman (née Reinoso), an immigrant from Nicaragua, to be his assistant, and eventually promoted her to head of P.R. and marketing. The two married in 1995, and together they opened new Nikki Beach locations in 10 countries, from Marbella to Dubai. Their customers in those years included Madonna, Paris Hilton, Beyoncé, Justin Timberlake, and Leonardo DiCaprio. I first went in 1999, and when I dropped in midday on a recent Saturday it was the same as I remembered: tourists in bikinis or half-buttoned linen dress shirts lounging on low-slung couches, hip-hop coming from speakers in the bushes, sunlight dappled between palm trees. Though it’s licensed by the city to stay open until four in the morning, it no longer operates as a nightclub.
In January 2021, Nikki Beach got a new neighbor: Carbone. The restaurant’s chef and co-owner, Mario Carbone, had been planning to open a Miami location for some time, but the pandemic—with New York City still largely shuttered and Florida open for business—hastened the move. MFG couldn’t be reached for comment, but last year Carbone spoke to me for an article in Flamingo magazine. “We’ve been welcomed with open arms since the day we came here,” he said of Miami Beach.
Hidden behind tall planters, Carbone Miami is like a Rat Pack–era supper club, with velvet chairs and delicate crystal chandeliers. Much was written in the restaurant’s early days about how hard it was to get a table. In May 2021, The New Yorker called Carbone Miami “the city’s hottest ticket, the prom queen of South Beach.”
But there’s one group that never had trouble getting a table at Carbone: local officials. Then mayor Dan Gelber got a May 2022 reservation for five to celebrate his daughter’s birthday. Miami Beach assistant city manager Mark Taxis, the point person for negotiations regarding the Nikki Beach property, got a reservation at the Las Vegas Carbone when he needed one. And when Carbone hosted a party for the Formula 1 Miami Grand Prix weekend, officials got free tickets worth $3,000 each. (Much of the heat has since cooled; a recent Resy search showed few available tables on weekends, but plenty during the week.)
I called Gelber to ask about those messages. He left office in 2023 and now works in Miami as a lawyer. Gelber recalls Nikki Beach asking for a meeting to get an extension on their contract. He had a vague recollection of being at the club once for a reception, but otherwise he says he didn’t know them and wasn’t convinced they should remain at the property. Then came the issue of the seven seconds. “The current folks submitted their bid late, which is a no-no,” Gelber says. Giving them a break would set a bad precedent, he says.
Of the F1 party, Gelber says he paid for his own ticket out of “an abundance of caution.” As for the reservations, he says asking for a hard-to-get table is something he did before and after becoming mayor. “Is someone really thinking this is where that’s at, a reservation?” he says. “The notion that a reservation had anything to do with it, it’s just silly.”
The lawsuit is scheduled to go to trial in February, but there’s no telling if Miami-Dade’s notoriously slothful court system will keep to that date and wrap things up before the lease ends in May, when the property is scheduled to be turned over to the Boucher-Carbone team.
The New Yorker called Carbone Miami “the city’s hottest ticket.” But there’s one group that never had trouble getting a table: local officials.
And in the latest twist in the saga, the Boucher brothers recently filed a new set of plans with the city that would require tearing down the Nikki Beach building rather than renovating it. Penrod’s lawyers wrote a letter to the city calling it “classic bait-and-switch.”
“This is not what I hoped for with Miami Beach,” says Singer, the former city commissioner who first convinced Jack Penrod to open his club. “The new world is different. It’s build, build, build. More and more and more expensive things.” Miami Beach, it seems, may no longer run on island time.
Eric Barton is a Miami-based writer who has contributed to Garden & Gun, Outside, and Men’s Health
