Clock ticks on strip club

By Jeff German (contact)

Wednesday, Oct. 3, 2007 | 7:03 a.m.

Federal marshals are on a tight deadline to sell Crazy Horse Too before year's end , when the closed strip club stands to permanently lose its liquor license and , with it, much of its potential profitability.

The Marshals Service, which took possession of Crazy Horse Too under a federal court order, last week hired the Las Vegas branch of commercial real estate giant CB Richard Ellis to market the once thriving strip club. The firm listed the property this week.

Crazy Horse Too was seized after former owner Rick Rizzolo, serving a 366-day federal prison term for tax evasion, failed to sell the club to meet $17 million in court-ordered fines, forfeitures and settlements stemming from his 2006 plea agreement with the government.

Rizzolo's attorney, Mark Hafer, said this week he feared that because of the looming deadline, the Marshals Service won't be able to sell the club at a fair market price, leaving Rizzolo "financially devastated" and unable to meet all his debts.

Hafer estimated Rizzolo's total financial obligations at the club at $24 million to $25 million.

As late as last month, Hafer had found three potential buyers, all approved by the government, willing to pay as much as $34 million for Crazy Horse Too. None, however, was able to close a purchase.

Any buyer Los Angeles-based CB Richard Ellis finds must receive at least a temporary liquor license from Las Vegas and reopen the club by Dec. 31, said Jim DiFiore, the city's top licensing official.

A zoning ordinance passed by the City Council more than a decade ago prohibits certain establishments from selling alcohol within 1,500 feet of each other, DiFiore said. Crazy Horse Too, which is less than 1,500 feet from another topless club, Cheetahs, was grandfathered in under the zoning change.

But if the club remains closed for six months, it will lose its liquor license, no matter who owns it. Crazy Horse Too shut down on July 1, setting the Dec. 31 deadline.

Len Briskman, deputy chief of business management for the Marshals Service in Washington, said the government is aware of the deadline. But he declined to comment and referred a reporter to CB Richard Ellis.

Geoffrey West, who is marketing Crazy Horse Too in Las Vegas for the real estate firm, acknowledged that the deadline is having a "significant impact" on the South Industrial Road club's value.

But he added: "We don't feel it impairs our ability to sell the property in any manner."

West, a vice president of investment properties for CB Richard Ellis, said he thinks Crazy Horse Too still will attract offers in the mid-$30 million range.

The company will accept sealed bids to ensure that a fair market price is reached and that the club's sale won't be compromised, West said.