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Gianni Versace’s most popular gay bar is reinventing itself after 36 years

Look at the neon "PALACE" Sign in front of the Palace Bar
The Palace Bar has been hosting drag shows for over 36 years and counting. (All photos courtesy of Palace Bar)

Before Gianni Versace was shot dead outside his Ocean Drive mansion, he enjoyed an enviable social life, with one of his gay hangouts being the Palace Bar.

In the 1990s, Miami Beach emerged as America’s playground, with a larger-than-life queer nightlife scene where the rainbow shone brightly over the MacArthur Causeway, the bridge that connects the vibrant neighborhood to downtown Miami and the world.

Steve Palsar founded Palace Bar in 1988, when there were no other restaurants on the thoroughfare; The locals thought he was “crazy,” a story familiar to gay neighborhood pioneers everywhere.

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, hosting tea dances and drag shows and drawing the party crowd from 12th Street, South Beach’s adopted gay block.

Coincidentally, Versace had recently relocated to Ocean Drive and shared the queer community’s passion for safe and fabulous spaces. He invited friends you may know to dinner with him, including Elton John, Madonna, Princess Diana and Luciano Pavarotti.

If there was a place besides Manhattan where queer people could express themselves and have fun, it was Miami Beach.

A large crowd celebrates on the outdoor terrace
Like Gianni Versace, countless queer people have found the same pleasure at the Palace Bar.

Little by little, 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 of Palace Bar, remembers this GayCities about walking the streets of South Beach in the early 2000s and encountering drag queens at any time of day, whether on the way to or from work.

He says as the neighborhood became established for the elite, the Palace Bar experienced a decline in business. Local queer residents were priced out.

In 2007, nightclub owner and designer Thomas Donall took over the bar and was faced with the challenge of modernizing an outdated kitchen and sound system, as well as walls that were crying out for a renovation. “The pole went the wrong way and Tom basically saved it,” Prasaguet says.

More importantly, Donall was tasked with revitalizing the waning energy of a place that was once the mecca of fun. He started the bar’s legendary drag brunch and hosted celebrations for major events like Miami Beach Pride and the Winter Party. Eventually, he had to get permission to close 12th Street to accommodate the crowds.

Donall transformed the Palace Bar from just a party space into an LGBTQ+ community center. That included working with the city to create a South Beach rainbow 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.

A neon sign from inside the venue reading: "Every queen needs a palace."
Drag queens seeking a kingdom need look no further.

The harsh reality of gentrification, fueled by an influx of developers, led to the closure of the Palace Bar 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 of its gay bars. The Palace Bar shared the community’s nightlife with the remaining gay hospitality soldiers that remained: Twist, Nathan’s Beach Club (formerly Nathan’s Video Bar) and Gaythering.

The executive director believes several factors have played a role in changing the city’s gay culture. “A combination of ultra-conservative mayors for three terms in a row over the last 12 years,” he says. “Development has definitely changed the footprint of Miami Beach, particularly South Beach where we are located. And then of course there are higher rents and everything starts to change.”

A group of 11 men sit around a table in the Palace Bar. Other guests are in the background.
The venue is spectacular for people watching and taking in all of Miami’s beauty.

Prasaguet points out that there were once 20 to 30 gay bars and hotels in the area, so Donall didn’t forget how important the bar was to gay Miami residents.

And the community agreed: Palace Bar reached new heights and became known for its legendary drag brunches. These brunches have propelled the careers of many drag queens including RuPaul’s Drag Race Participants Malaysia Babydoll Foxx and Mhi’ya Iman LePaige.

“Drag recruiting is a complicated process because even when I have time off, I continue to work. I visit other bars and look for talent, and if I like what I see, I let them audition here,” says Prasaguet.

Before many Miami queens wanted to take part in the show, they first competed for a residency at the Palace Bar. Even last year’s winner, Sasha Colby, tells it GayCities At the bar, she started lip-syncing for her life.

A neon sign from inside the venue reading: "Just a warning.  It's really gay here."
Warning: Gayness thrives here, but all allies are welcome.

While many gay men accept that drag brunch often prioritizes entertainment over the quality of the food, Palace Bar has stood out as a culinary treat. Prasaquet jokes that the secret in the kitchen is love and perhaps the kitchen team he brought with him from his previous job.

But as drag penetrated the mainstream, Prasaguet says management knew the venue had to keep reinventing itself and pushing the boundaries of gay nightlife. After 36 years in business, they recently opened the Palace Lounge, a permanent facility connected by a “tunnel atmosphere” designed to make it the city’s ultimate queer destination – a hotspot where you can seamlessly move your plans from day to night can be transferred without leaving the premises.

A drag queen twerks in front of an admiring audience on the outdoor terrace
Miami’s best drag talent wants to perform in one place.

These days they receive visits from modern gay celebrities like Billy Porter and Andy Cohen, as well as old-school gay divas like Jeanie Tracy and CeCe Peniston.

“We are probably the only place in the world where it drags every day,” says Prasaguet. “We started with a 52-seat restaurant and now we have 417. The Palace Bar will continue to develop and grow.”

One can’t help but imagine that Versace would have loved it.

Giani Versace sits at a table with a group of friends and colleagues
What else do gay men need?

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