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Gianni Versace’s favorite gay bar is reinventing itself after 36 years
It made history as the first bar and restaurant on Ocean Drive, which would become one of the most expensive neighborhoods in the country.
Before Gianni Versace was gunned down in front of his mansion on Ocean Drive, he enjoyed an enviable social life, with one of his gay haunts being the Palace Bar.
During the 1990s, Miami Beach emerged as America’s playground, including a larger-than-life queer nightlife where the rainbow shone brightly over MacArthur Causeway, the bridge connecting the lively area to Downtown Miami and the world.
Steve Palsar founded the Palace Bar in 1988 when there were no other restaurants on the thoroughfare; locals considered him “crazy,” a tale familiar to pioneers of gayborhoods everywhere.
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The venue made history as the first bar and restaurant on Ocean Drive, which would become one of the most expensive neighborhoods in the United States. The Palace immediately began catering to Miami’s LGBTQ+ community by hosting tea dances and drag shows, drawing the party crowd from 12th Street, the adopted gay block in South Beach.
Coincidentally, Versace had recently relocated to Ocean Drive and shared the queer community’s passion for safe and fabulous spaces. He invited friends you might be familiar with to dine with him, such as Elton John, Madonna, Princess Diana, and Luciano Pavarotti.
If there was a place for queer people to thrive and have fun besides Manhattan, Miami Beach was it.
Gradually, and then seemingly all at once, the entire area became the epicenter of gay culture, even after Versace met his untimely fate in 1997.
AJ Prasaguet, the current general manager at the Palace Bar, reminisces to GayCities about strolling down the streets of South Beach in the early 2000s and encountering drag queens any time of day, either on their way to or from werk.
He says as the neighborhood cemented itself for the elite, the Palace Bar experienced a downturn in business. Local queer residents were being priced out.
In 2007, nightclub owner and designer Thomas Donall took over the bar, facing the challenge of upgrading an outdated kitchen and sound system and walls that were begging for renovation. “The bar was going in the wrong direction, and Tom basically rescued it,” says Prasaguet.
More importantly, Donall was tasked with rejuvenating the waning energy of a place that was once the mecca of fun. He launched the bar’s iconic drag brunch and hosted celebrations for major events such as Miami Beach Pride and Winter Party, eventually requiring him to acquire permits to shut down 12th Street to accommodate the crowds.
Donall transformed the Palace Bar from just a party space into an LGBTQ+ community center. This included collaborating with the city to create a rainbow South Beach landmark on 12th Street in 2009 and hosting a special ceremony in 2016 to honor the victims of the Pulse nightclub tragedy. The bar has raised over $2 million for LGBTQ+ causes.
The harsh reality of gentrification, fueled by an influx of developers, resulted in the Palace Bar’s closure in 2017. However, Donall saw the building sale as an opportunity to reopen in a bigger and better location not too far away, at 1052 Ocean Drive. Ironically, the new venue aptly resembled the grandiosity of its name.
Miami Beach was in danger of losing all its gay bars. The Palace Bar shared the community’s nightlife with the remaining gay hospitality soldiers still standing: Twist, Nathan’s Beach Club (formerly Nathan’s Video Bar), and the Gaythering.
The general manager believes several factors played a role in shifting the town’s gay culture. “A combination of ultra-conservative mayors for three terms in a row for the last 12 years,” he says. “Development has definitely changed the footprint of Miami Beach, especially South Beach where we’re at. And then, of course, there’s higher rents, and everything starts to change.”
Prasaguet notes that once upon a time, there were 20 to 30 gay bars and hotels in the area, so it wasn’t lost on Donall the bar’s importance to gay Miamians.
And the community agreed: the Palace Bar reached a new level of popularity, becoming renowned for its legendary drag brunches. These brunches propelled the careers of many drag queens, including RuPaul’s Drag Race contestants Malaysia Babydoll Foxx and Mhi’ya Iman LePaige.
“Drag recruitment is a complicated process because, even when I’m off, I’m still working. I visit other bars and scout talent, and if I like what I see, I have them audition here,” says Prasaguet.
Before many Miami queens aspired to compete on the show, they first fought for a residency at the Palace Bar. Even last year’s winner, Sasha Colby, tells GayCities she got her start lip-syncing for her life at the bar.
While many gay men accept that drag brunches often prioritize entertainment over food quality, the Palace Bar has distinguished itself as a culinary treat. Prasaquet jokes that the secret in the kitchen is love and perhaps the culinary team he brought with him from his former job.
But as drag permeated the mainstream, Prasaguet says management knew the venue needed to keep reinventing itself and pushing the gay nightlife envelope. After 36 years in business, they recently unveiled Palace Lounge, a permanent feature connected via a “tunnel atmosphere” designed to make them the city’s ultimate queer destination – a hotspot you can seamlessly transition your plans from day to night without leaving the premises.
Nowadays, they receive visits from modern gay celebrities such as Billy Porter and Andy Cohen, as well as old-school gay divas like Jeanie Tracy and CeCe Peniston.
“We’re probably the only place in the world that does drag every single day,” says Prasaguet. “We started with a 52-seat restaurant, and now we have 417. The Palace Bar will continue to evolve and grow.”
One can’t help but imagine Versace would’ve loved it.
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