A new agreement may wash away pending lawsuits but will the city agree?
It almost happened. They were so close.
After years of legal battles, numerous denied applications, a nearly million-dollar settlement and much hand-wringing, the city came as close as it’s ever been to granting a new license for a Downtown strip club a couple of weeks ago.
A group of three applicants — who each had separate lawsuits pending against the city for recent strip club license denials — had teamed up, met with the city attorney and drafted an agreement that would have granted the group a license in exchange for ending their lawsuits.
“All the parties that have lawsuits [will] drop them, all the parties who have lawsuits agree not to sue again [and] all the parties who have lawsuits agree not to apply again, if a license is granted,” says Jon Ferraro, one of the lawsuit litigants.
Ferraro, who has long battled the city over opening a Downtown strip club, is co-owner of Silk Exotic, the company that received $970,000 from the city last year for damages and legal fees after winning a previous lawsuit based on repeated license denials.
“This is the same agreement that was on the table three years ago — I just think they’re taking it more seriously now as we get closer and closer [to concluding the second Silk lawsuit],” adds Ferraro.
With the new agreement in hand, the group of applicants brought their proposal to open a Downtown club called “The Executive Lounge” at 730 N. Old World 3rd St. to the Common Council’s license committee April 17. And that’s where what looks like the proposal’s slow but imminent death began.
Like all other Downtown strip club license hearings, the application and lawsuit-ending proposal was met with fierce opposition from local business groups testifying at the hearing and claiming such a club would have an adverse effect on surrounding businesses.
In turn, the License Committee put the application on hold so business leaders could try to find a different, more suitable location for the strip club. They couldn’t. Instead, they decided they “cannot in good conscience recommend a Downtown location,” said one business leader in a statement to the Milwaukee Journal Sentinel.
The business leaders did propose some other locations for a strip club, but none of them were Downtown. This led the lawsuit plaintiffs’ lawyer to send a letter to the business leaders warning that if no license for a Downtown strip club location is granted, the pending lawsuits will continue and may put the city on the hook for $10 million.
One city alderman says that figure could actually be much higher.
“The liability is real and it’s significant for the city,” says Ald. Jim Bohl, who helped orchestrate the lawsuit-ending proposal. “The collective liability [of all the lawsuits filed or that could be filed], if decisions are rendered against the city, could be in the range of 8.5 [million dollars] to 20-some million dollars.”
While he’s sympathetic to residents and business leaders who don’t want a strip club Downtown, Bohl says the city may be facing a no-win situation. “I don’t know that there’s a best case scenario,” he says. “The city is between a rock and a hard place.”
Another agreement architect, Deputy City Attorney Adam Stephens, isn’t talking. “I’m not free to comment on any of the recent developments at this point — there are a lot of legal considerations both in the lawsuits that are pending and other things … I can’t comment.”
Others are staying hush too: None of the five aldermen on the Common Council’s License Committee would return my calls seeking comment.
According to online schedules, the next chance the License Committee has to vote on the Old World Third Street location application will be May 16, though some news reports say that the committee may meet sooner, possibly May 8.
Regardless of the outcome of the new application and lawsuit-ending agreement, Ferraro won’t be a part of it.
“I’m going a different route,” he says. “I’ve had some opportunities come up, some new business ventures that I’m going to jump on,” he adds, declining to explain more.
Plus, he says, battling the city “has gotten pretty old.”
Still, he finds what he calls the hypocrisy of the whole matter unnerving, given there’s been a strip club Downtown — Art’s Performing Center at 144 E. Juneau Ave — for many years.
“All these people that are saying ‘We won’t develop here,’ or ‘We’ll pull our business [if a new strip club opens], but they developed and built around Art’s Performing Center, which is a very low-end gentlemen’s club,” he says. “So, you’re okay building around a low-end gentlemen’s club but you’re telling me that if we put in a high-end gentlemen’s club with a great reputation, you’re not going to be okay with it?”
For much more information and background on how we got to this point, Milwaukee Magazine has a feature on Silk Exotic and Jon Ferraro in its May, 2017 issue. Find the issue on newsstands starting May 1.