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The Bottom Line?

The County Commission's new "sexually oriented business" ordinance could signal the last dance for Memphis strip clubs. Will the City Council intervene?

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On a recent Thursday night at the Gold Club, a topless, Caucasian woman with long, dark hair and an ample bosom snakes around a brass pole in the center of the stage. Occasionally, when the music's intensity heightens, she jumps into the air and lands in an impressive full split on the floor.

One man, seated at the end of the stage, inserts a dollar bill into his mouth, and the woman approaches him slowly. She smiles as she pulls his head toward her breasts and holds it there for several seconds. Then, as she pulls away, she uses her hands to push her breasts together and grabs the dollar between them. The woman saunters away to finish her routine, leaving the man looking dazed, like a boy who's seen his first nudie mag.

The diverse clientele — ranging from properous-looking businessmen to young, hip couples — looks little different from a Saturday-night dinner crowd at Huey's. As they sip their beers and watch the dancers, other women, in G-strings and bikini tops, work their way through the audience. Some lounge on the laps of customers, who have undoubtedly paid handsomely for such a privilege.

Contact between dancers and customers is common in local strip clubs but perhaps not for long. A new ordinance passed by the Shelby County Commission last year went into effect on January 20th. It will be enforced beginning April 30th, the end of a 120-day grace period.

The new ordinance will prohibit dancers from coming within six feet of customers or other entertainers. It prohibits the sale or consumption of beer or liquor on club premises and requires dancers to wear opaque bottoms and cover their nipples. Club owners and dancers will be required to undergo complex licensing procedures, including a review of any criminal records.

Suffice it to say, if the county ordinance stands, a decades-long era of "anything-goes" Memphis strip clubs is over — and with it, a multimillion-dollar business model.

But, as you might expect with so much at stake, there's a rub, and the clubs aren't, um, going down without a fight. Seven businesses — Christie's Cabaret, Platinum Rose, the Gold Club, New York, New York, the Pony, the Jet Strip, and Downtown Dolls — filed a lawsuit against the city and the county last month. The suit contends the new ordinance is "overbroad, vague, and ... in violation of the First and Fourteenth Amendments."

According to the suit, "the rule requiring entertainers to remain six feet from patrons and one another during performances and the rule prohibiting the sale of alcohol in adult-oriented establishments ... will destroy the market for live adult entertainment in the City of Memphis."

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"It's ironic that, right now, the county has a shortfall of $5 million to $6 million, and they've cut off a tax-revenue source — the sale of beer," says Rex Brasher, an attorney for Christie's Cabaret.

The ordinance also would prohibit patrons from bringing their own liquor or wine into the clubs, a practice that was allowed under the old rules. The newly created Adult Entertainment Board can revoke, suspend, or annul the license of a club owner if any patron is caught consuming alcohol on the premises.

There's also some confusion about how the county's law would apply to local strip clubs, all of which are located within the city limits.

The lawsuit claims that since Memphis already has two ordinances regulating adult- oriented businesses, the county ordinance should not apply to clubs within the city limits.

"Though Memphis is in the county, it has its own government authority and its own boundaries," Brasher says.

A city version of the ordinance, which would supersede the county's, is now under discussion. It came near passage by the outgoing council after last year's municipal elections, but that council heeded public discord on the matter and passed the buck to the newly elected council, sworn in, with nine new members, on January 1st.

Even as the regulatory board appointed by the County Commission sits down this week for its first meeting on the enacted county ordinance, the city could well make those deliberations moot.

Some of the differences between the proposed city ordinance and the one already approved by the County Commission seem minor. For example, terms of regulatory board members would be staggered rather than concurrent, as provided for in the county ordinance. Other provisions of the proposed city ordinance seem designed to appear stricter: Club operators whose licenses are revoked would be permanently barred from being relicensed, as compared to the county ordinance's five-year exclusion from reapplication. Closing times for all sexually oriented businesses (S.O.B.'s) would be 3 a.m., as against the 5 a.m. closing time provided by the state law.

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Key provisions in the proposed city ordinance suggest, however, that restrictions overall would be liberalized. Though dancers could not perform bottomless, topless dancing, sans pasties, would be permitted. And beer could be served to patrons.

Mike Ritz, who spearheaded the county ordinance on the County Commission, takes a dim view of the city alternative. Ritz, a Republican who represents an outlying suburban district, disapproves of the liberalized provisions, but his major objection to the city version is that he believes it to be a Trojan horse designed to encourage nonstop litigation and to prevent any regulation at all.

Ritz claims to have been told by a city official that club owners interceded directly in the drafting of the city version. "They essentially wrote that ordinance," he says, maintaining that among the ordinance's pitfalls are unspecified "illegal provisions" designed to invalidate the measure."It was clearly written by the industry to put things in a multiyear holding pattern so the county can't enforce things," he says.

Litigation may indeed become the fate of the city ordinance, as it already is for the county ordinance it would supersede. Meanwhile, the pending city version was due for some spirited discussion in this week's meeting of the City Council's zoning committee and was scheduled for a second reading. The real showdown will probably come on March 18th, when a third and final reading of the approved ordinance is expected.

Even if no substantial changes are made in the ordinance as now proposed, a close vote is anticipated. Some members have expressed a preference for the county version. And at least one council member, newcomer Shea Flinn, has indicated he wants to do some serious revamping of the city's alternative.

Flinn is a proponent of establishing what in layman's terms is usually called a "red-light district" — a carefully circumscribed area in which various kinds of activity, outlawed in other parts of a jurisdiction, are permitted under strict regulation.

As part of the run-up to the council's consideration of a possible topless-club measure of its own, zoning committee chairman Myron Lowery furnished council members with several detailed reports — one of which systematically analyzed the issue that assistant city attorney Thomas Pacello called "concentration [i.e., creation of a red-light district] versus dispersal." Pacello's analysis compared the results of Boston's red-light district, established in 1974 under the somewhat whimsical name of "combat zone," to those stemming from Detroit's 1972 "anti-skid-row" ordinance that provided for dispersal of adult businesses via mandated distances between them.

Shea Flinn - LARRY KUZNIEWSKI

Pacello's conclusion, based on crime reports and property-value statistics from the two cities, is that "a concentration of adult businesses may have a magnifying effect on the negative secondary effects already associated with each adult use." His analysis suggests further: "The number of cities that are choosing to implement the dispersal approach suggests that this method is the most effective at minimizing the negative secondary effects of adult businesses."

Flinn is unfazed. "I'm still researching the matter," he says, arguing that the data on which Pacello's analysis is based might be outmoded. "Concentrating sexually oriented businesses in a red-light district still seems to be a better strategy, so long as you have stiff enough penalties for infractions. That makes the clubs enforce themselves."

A significant feaure of the penalties that Flinn (and, for that matter, the currently proposed city ordinance) would propose is that they are financial rather than the criminal ones established by the county ordinance, based as it is on state law.

Beyond all other distinctions and legal hair-splitting, however, Flinn concedes that a difference in philosophy plays a major role in his thinking. While he acknowledges that "the clubs do have a harmful patina, and we need to take common-sense measures to limit that," he sees the county ordinance as one "designed to make it as difficult as possible to run a sexually oriented business," and that he finds disturbing from a First Amendment point of view.

"The sound of ideas clashing is the sound of democracy," he says, making the case for a broader degree of tolerance on the morals front.

Flinn's thinking is shared to some degree by county commissioner Steve Mulroy, who was "very skeptical" when first apprised of the county resolution last year. "I thought it might have been overblown and reflected a puritanical mindset. And I thought we had more important priorities."

But Mulroy says he developed confidence in the integrity of Eric Kelly, the consultant engaged by the commission to recommend an approach to sexually oriented businesses, and finally decided, after sifting through reams of reports on the adverse secondary effects of S.O.B.'s, that the model state legislation on which the county ordinance was based is "not all that restrictive."

He had one important reservation, however: a feeling that the ordinance's banning of beer sales went too far. Besides noting the outright loss of beverage tax revenues, estimated by opponents of the ordinance to be upwards of $100,000 per club per year, Mulroy says, "I didn't see any compelling link between the adverse secondary effects and alcohol."

Even so, he ended up voting for the county ordinance, which passed without opposition, believing, as he later said, that the City Council could, and probably should, amend the ordinance once the council took into account the welter of conflicting opinions and interest groups in the community.

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Some of the strongest opposition to the strip clubs is coming from businesses around Memphis International Airport, where several S.O.B.'s operate along Brooks Road. The companies hope to turn the area into an "aerotropolis," a term coined by John Kasarda for a futuristic urban business center. The Memphis Regional Chamber of Commerce and Memphis Tomorrow have bought into the idea. Medtronic, Smith & Nephew, Pinnacle Airlines, FedEx, and several trucking companies have lobbied the City Council to adopt the same policy as Shelby County regarding sexually oriented businesses.

"Business owners both large and small are taking an active interest in making this area a more desirable place to have a job and go to a restaurant," says Jim McCullough, president of General Truck Sales and Service. "We're not being moralists. We're just pragmatic business people. We are kind of at a crossroads. If we don't improve the area, then property values and the tax base could go down. Or we can redevelop and the tax base might go up."

McCullough moved to Memphis in 1973 and has worked for General Truck since 1980. At that time, the Brooks Road area still boasted such popular restaurants as Fred Gang's and the 91st Bomb Group. Ireland's steak and biscuits restaurant occupied the space that is now occupied by Pure Passion.

There were strip clubs too, with Danny's on Airways Boulevard the most notorious, but it was more contained, McCullough says.

William Griffin, senior vice president of global operations for Smith & Nephew Inc., came to Memphis six years ago from Dallas. On a recent driving tour of the neighborhood, he contrasted the company's well-kept campus and manufacturing buildings with the three strip clubs on Brooks Road and cheap motels and X-rated bookstores. The company, Griffin said, "had to decide whether to follow the FedEx model and move out East or the Medtronic model and stay in this area and try to improve it." He thinks the area is improving but has a long way to go.

"We bring in some 1,200 physicians and surgeons a year for training and consultation, and Brooks Road is always an eyesore," Griffin says. "There are not good places to go out for lunch. You bring in a candidate for a job interview and immediately want to go to Southaven for lunch. It doesn't have to be that way."

Smith & Nephew produces medical devices and offers some of the best-paying manufacturing jobs and executive salaries in the Memphis area.

"How many ways can a human resources department spin the prostitute on the sidewalk to a Harvard graduate looking at our community for the first time?" Griffin asks. "These clubs are on the verge of destroying entire logistics, medical technology, and tourism industries that this city has survived on and is betting its future on."

The strip clubs are both cause and symptom of the decline. The airport area does not have as many potent stakeholders as it did 10 to 15 years ago. FedEx still has an office presence but moved its executive offices to East Memphis. The airport used to border a residential neighborhood called Oakhaven, but it was bought out for airport expansion in the 1990s. One unintended consequence was a loss of homeowners who might have opposed neighborhood deterioration and expansion of the S.O.B.'s.

In what was hailed at the time as a landmark victory against strip clubs, the namesake and proprietor of Danny's, Danny Owens, was convicted by federal prosecutors and sent to prison in 1995. But other clubs took its place. One of Owens' successors was Ralph Lunati, owner of Platinum Plus and Tunica Cabaret. In 2006, FBI agents seized the two clubs and closed them after a two-year undercover operation by Memphis police, who observed drug sales and the notorious "two-girl" sex shows. Those shows were ultimately determined to be prostitution and got the clubs shut down.

In February, Lunati pleaded guilty in federal court, forfeited the clubs, and was sentenced to 18 months in prison. Slightly built and soft-spoken, Lunati, who has courtside seats at Memphis Grizzlies games, was described by U.S. district judge Samuel H. Mays as a "model husband and ex-husband" who had stayed out of trouble for the last 25 years.

That assessment reflects the nod-and-wink attitude of many in Memphis toward the strip clubs. It's a conflict between Old South morality and a laissez-faire attitude common to other tourist cities. The Memphis clubs may not have achieved the acceptance of Printer's Alley in Nashville or Bourbon Street in New Orleans, but the tax revenues and ancillary economic impact they generate are nothing to sneeze at.

Like most alternative newspapers, the Memphis Flyer was once an advertising vehicle for lucrative full-page strip-club ads. The Commercial Appeal still runs smaller strip-club ads. Fewer ads mean smaller newspapers, fewer billboards sold, fewer radio spots. And there is little doubt that conventioneers and other tourists often find their way to local strip joints.

Now the fate of local strip clubs has fallen — yes — into the lap of the Memphis City Council. Whether or not they'll pay for the dance is yet to be decided.

Steve Mulroy - JUSTIN FOX BURKS

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