With a lawsuit hanging over their heads, elected officials in Central City are considering ordinances that could clear the way for strip clubs in addition to the gambling casinos that drive the historic mountain town’s economy.
City Council is scheduled to look Tuesday at two proposals that could ease restrictions on the location of adult-oriented businesses to open more possible sites in town. Also on the agenda for a work session is discussion of putting the matter to a public vote.
But it’s unclear whether the City Council is inclined to make any changes. Members voted Aug. 6 against granting a permit to RCI Dining Services to operate an adult-oriented nightclub in a building it bought from the city for $2.4 million.
RCI Holdings Inc., parent company of RCI Dining Services and owner of nightclubs and sports-bar restaurants across the country, then filed a federal lawsuit claiming the city’s denial is unconstitutional.
Todd Williams, a member of the city council, said a possible change to the ordinances is to restrict adult-oriented businesses to industrial zones. He said that’s an option the city planning commission has discussed.
Williams proposed asking voters to decide whether and where sexually oriented businesses should be allowed. The mayor and another council member have recused themselves from acting on the issue because they have had relationships with RCI and want to avoid the appearance of a conflict of interest.
“I suggested that because of the contentiousness of this particular item and the fact that two of our council members have recused themselves from voting on anything regarding RCI, it would probably be a good idea for us to have everyone in town give us their opinion on what should happen here,” Williams said.
RCI Holdings, whose businesses in the Denver area include the Diamond Cabaret strip club, said in its lawsuit filed Aug. 7 in U.S. District Court in Denver that a Central City ordinance prohibiting “sexually oriented businesses” from being within 1,000 feet of similar businesses, homes, schools, public parks and other places effectively bans adult-oriented entertainment sites.
City representatives have admitted that the restriction makes it impossible for sexually oriented businesses to get permits in Central City, according to the lawsuit. The result is a violation of the businesses’ constitutional rights of free speech and due process of law, RCI Holdings said.
The city approved the sale of the property on Main Street to RCI Holdings in 2022 knowing that an affiliated company “would operate the premises as an adult-oriented nightclub,” the lawsuit said.
Daniel Miera, city manager for Central City, said in an email Monday that under city policy, he can’t comment on litigation.
Mayor Jeremy Fey declined to comment because he has recused himself from deciding matters involving RCI Holdings. He said he recused himself to avoid the perception of a conflict of interest because of his friendship with Eric Langan, president and CEO of RCI Holdings.
In July, KMGH-Channel 7 reported that two community members cited Fey’s personal relationship with Langan in complaints they filed against the mayor with Colorado’s Independent Ethics Commission.
Mayor Pro Tem Kara Tinucci said in an email that she recused herself because her husband was a contractor at one point for RCI.
Messages were left with Langan.
When RCI Holdings closed on the $2.4 million property deal two years ago, city officials said the new business wouldn’t be a strip club. One council member said the community opposed having a strip club at the site.
The city planning commission in 2022 recommended approving two ordinances that would modify the restrictions on the location of adult-entertainment businesses to make more sites in Central City eligible for their operation. In May, city staffers also recommended adopting the changes, saying that the U.S. Supreme Court has upheld limited First Amendment protections for strip clubs and a total ban on them is unconstitutional.
But in July, a city board rejected a permit for RCI Dining Services because the building is within 1,000 feet of homes. The council rejected the company’s appeal.
RCI Holdings is seeking unspecified damages for lost profits, loss of property and other costs.
Central City, about 38 miles west of Denver, is one of three historic Colorado mountain towns where gambling was legalized in 1991. The others are Cripple Creek and Black Hawk, Central City’s neighbor.
Updated at 2:30 Aug. 20 to add comments from a city council member.
Get more business news by signing up for our Economy Now newsletter.
Originally Published:
