Thursday, Sept. 16, 2004 | 10:51 a.m.
Treasures, touted as a $30 million strip club of unparalleled luxury, failed to get a permanent liquor license from the Las Vegas City Council after a nearly three-hour discussion Wednesday.
The issue could go to court -- participants on both sides made numerous references to creating a record for potential challenges -- although when and where is uncertain. It would be a difficult challenge, since the council did not revoke the license, instead simply allowing it to expire and refusing to grant a permanent license.
"I'm sure the owners will get together and decide what to do," said Mark Fiorentino, a Treasures lawyer who spoke at the City Council, and one of a small posse of legal aid assembled by the club owners.
One of the club owners, David Ali Davari, declined comment, as did his Houston-based attorney.
The temporary license under which Treasures had operated was to run out at midnight Wednesday. That means no more liquor in the club, a restriction on the high-profit cash stream that other club owners in the past have called a death knell.
Council members said the owners brought their troubles upon themselves, first with problems at their Houston clubs that caused the city to balk at granting the license, then with "The Promise," the commitment made in a 2001 hearing that Treasures would operate 100 percent above the law.
That commitment had been bandied about, with Fiorentino arguing that it was impossible to live up to and reframing it as a general statement of operating principles with which he claimed Treasures did comply.
In the end, council members acknowledged that it may have been an impossible promise, but they held Treasures to it. In August, one Treasures dancer was convicted of soliciting prostitution. Another dancer was in court on Wednesday on prostitution charges. Her hearing was pushed back until November.
"I'm not sure this is an industry that can be in compliance," said Councilman Steve Wolfson. "(But) this is an apple you chose to bite into."
Wolfson was not on the council when the temporary license was granted in 2001. It became effective in September 2003, when the club opened.
The vote was 5-0 to not grant the liquor license. Mayor Oscar Goodman, whose son Ross is a lawyer for Treasures, and Councilman Michael Mack, who has a public relations contract with the club, abstained from the vote.
The owners, the Davari brothers of Houston, appear to have few options. Since the license is discretionary, meaning it is up to the City Council's judgment whether to grant it or not, it is unlikely a judge would force a licensing approval.
Fiorentino hinted that the brothers may not simply go away, however, and if they have to go, they may take others with them.
He referred to a report on other strip clubs in the city of Las Vegas prepared by an undercover investigator hired by him.
He did not introduce it into the record or provide copies during the meeting Wednesday, saying after that "I was trying to respect the integrity of the process."
However, he said that he was "reasonably certain it would be made public."
Tom Dillard, the investigator and former police detective hired by Fiorentino, told council that he concentrated on five clubs. Most operated similarly to Treasures, with few violations of the law.
But there was an exception, he said.
"One is way out in left field," Dillard said. "It is out of control, in my opinion."
He did not name the club, and nobody on council asked him to.
After the meeting, Fiorentino would not name the club.
The comparison between Treasures and other clubs was a tactic that failed.
City Attorney Brad Jerbic, who was the first speaker during the discussion, addressed the issue immediately.
"I never intended to make this presentation as a comparison," he said.
He focused the council on the issue of whether the Davari brothers were suitable license holders. City rules for privilege licenses -- such as a liquor license -- require extensive background checks for suitability.
Jerbic ran down a simple list of reasons why city staff deemed them unsuitable:
Paul Nugent, the Davari's Houston lawyer, argued at a previous council meeting that the transactions were simply a way of making sure cash to operate the club was available on a daily basis. Too much cash at one time would be a tempting target, he said, which is why the transactions were made daily.
While a city of Las Vegas audit found no such issues here, the claims still are relevant to the Davari brothers' general business practices, Jerbic argued.
Fiorentino followed Jerbic's presentation by arguing that the Davari brothers, in business for about 15 years, have cut down on problems at their Houston clubs since 1995, when the most serious allegations of misconduct occurred, and 2000, when Las Vegas investigators showed up.
He spoke of the steps Treasures took to ensure as legal an operation as possible, the main element of which was the hiring of Dillard to train dancers to obey dance restrictions.
He also raised the question of whether the city was selectively prosecuting the Treasures prostitution cases -- one found guilty of soliciting for prostitution, one acquitted of prostitution but found guilty of violating the erotic dance code, and one to take place in December -- when Jerbic testified at a previous council meeting that his office typically allows such cases to be plea-bargained.
Jerbic answered by referring to "The Promise": "They set the standard."
If his office did not prosecute the cases, he said, "I would deprive council of the information it needs."
After Jerbic's brief response to Fiorentino's presentation, the council members made brief statements, and it quickly became clear how most of the five eligible members would vote.
"The point was made that the city of Las Vegas wouldn't tolerate blatant sexual misconduct and I think we established zero tolerance to make that point," Councilman Gary Reese said.
Wolfson made his comment about the "apple that you chose to bite into."
Councilman Larry Brown did not indicate which direction he was going to go, and instead addressed the adult industry.
"The industry, unless we want to take a tougher stand, will remain what it is," he said. "Regardless of the decision today ... what are we going to do next?"
Councilman Lawrence Weekly did not speak. Councilwoman Janet Moncrief said that in 2001, when the saga began, the city staff recommended against the license, and "today staff is still saying they are not suitable."
With that, Moncrief, who represents the ward in which Treasures operates, made the motion to deny the license. It passed unanimously.
Pete Eliades, who owns Olympic Gardens and is part owner of Sapphires, two other strip clubs, said the council had no choice.
"I'm sorry to say, (but) the owners had made that commitment," he said.
Eliades said he expects the owners would try some legal action to protect their multimillion-dollar investment, but if that fails, "they'd have to sell it."
He said it's difficult to operate a strip club without liquor sales, especially one in which the owners have invested so much money.
Eliades also said he felt badly for anyone who might lose their job, and said if Treasures employees have valid work permits, they could try one of his clubs.
"I don't turn nobody down," he said.
After the meeting, the Davari's lawyers did not answer questions about what happens next, and disappeared into City Hall.
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