Jeramey Jannene
Eyes on Milwaukee

Why Strip Club Deal Fell Apart

Deal would have ended suits against city if council okayed new club.

By - Apr 19th, 2017 05:27 pm
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730 N. Old World Third St.

730 N. Old World Third St.

Whoops, there’s no deal to allow a strip club to open Downtown.

It looked like there finally was a deal, after years of resistance from the city and years of controversy over the issue of a downtown “gentleman’s club.” At the Tuesday Milwaukee Common Council meeting Ald. Jim Bohl introduced a resolution stipulating that a new license would be granted to PPH Properties I LLC for a tavern and strip club at 730 N. Old World Third St. in exchange for three different parties dropping lawsuits against the city regarding past strip club license applications that were denied.

The lawsuits were by the Silk Group, the Buzdum family and one by John Urban and Roaring 20’s Management, LLC. The Silk Group has already won a lawsuit against the city for nearly a million dollars. Rather than take a chance on losing more money, Bohl and other council members (probably a majority) saw the settlements as a way to prevent any further losses from such lawsuits.

But the proposed location, most recently home to Rusty’s Old 50 tavern, has been rejected as the site for a strip club in the past. And on Monday, at a meeting of the council’s Licenses Committee, Ald. Chantia Lewis had made a motion to hold a new application, allowing the Westown Association business improvement district and others to attempt to find another location. Committee members Khalif Rainey and Milele A. Coggs joined Lewis in voting to hold the matter, while aldermen Jose Perez and Tony Zielinski voted in opposition. This left the Licenses Committee still in control of the application, and that lack of action in turn made it premature for the proposed deal introduced by Bohl to be voted on by the full council. So no deal.

The issue will now go back to the Licenses Committee to somehow find a location that won’t arouse opposition, which won’t be easy. Indeed, however any deal on a strip club is crafted, it is likely to leave some city heavyweights with a bitter taste in their mouth.

The proposed settlements with the three plaintiffs would prevent the city from enacting legislation “that substantially burdens the operation of such a Gentlemen’s Club for a period of six years.” The settlement goes on to note “Examples of legislation that substantially burden the operation of such a Gentlemen’s Club include a regulation that designates a minimum room size in which erotic dances are required to perform; requires erotic dancers to remain at a specific distance from patrons while performing; a regulation that requires erotic dancers to perform only on stage; and/or a regulation that prohibits any touching (other than touching that is already prohibited by state law).”

Meanwhile, the agreement would prevent the plaintiffs from applying to open additional taverns or strip clubs in the city.

The language in this proposed settlement wasn’t agreed to at random, but is derived from a series of yet-to-be introduced bills that would create an “adult entertainment district.” Zielinski, who chairs the Licenses Committee, led those efforts.

Downtown Ald. Robert Bauman opposes the grand bargain, telling the committee “there is an appearance that we are trading a license for money.”

Bauman has allies among his constituents, most notably new Grand Avenue Mall owner Tony Janowiec. Janowiec called the proposed deal “the biggest slap in my face.” Janowiec is leading the redevelopment of the mall into a mixed-use facility and believes the proposed strip club could negatively impact his efforts to secure leases with office tenants.

Joining Jaonwiec in opposition were a number of other downtown leaders including Westown executive director Stacie Callies, Milwaukee Downtown executive director Beth Weirick, St. James Court apartments owner John Hennessy and Mandel Group Chief Operating Officer Robert Monnat. All are unlikely to support any strip club in the downtown area.

About the New Strip Club

The application for the new Old World Third St. club, to be known as the Executive Lounge Gentleman’s Club, lists ownership being divided among three different parties. Scott Krahn of Hartland serves as the agent and sole proprietor, owning 38 percent of the business, Joseph Modl of Germantown is listed as owning 38 percent as well and Radomir Buzdum of Watertown is the smallest partner with 24 percent.

According to the application those three collectively own shares in Silk Exotic Milwaukee, Silk Exotic Madison (Middleton), Silk Exotic Juneau, Dew Drop In (Watertown), Buzdum’s Pub (Germantown), TNT (Watertown), Hideaway Bar & Grill (Okauchee Lake), and Lucky Joe’s Alchemy and Eatery (Wauwatosa).

According to the application, the Executive Lounge would derive 45 percent of its revenue from alcohol sales, 45 percent from entertainment and 10 percent from cover charges. The cover charges are anticipated to be between $10 and $15 per person. The legal capacity of the club would be 216.

Long-time Silk manager Craig Ploetz would manage the club. A plan of operations for the club indicates it would “cater to a more discreet clientele” and would discourage large groups such as bachelor parties. The only exterior signage will be a neon sign of the letters “EL.” All parking would be handled by a third-party valet service.

The club would pay building owner David Weir base rent of $2,500 per month, plus a “prorata share of taxes + CAM.”

Jon Ferraro, who has long been at the center of the issue having applied (and been rejected) for a number downtown licenses, is nowhere to be found on the documents for the new club. In August 2016 the Milwaukee Journal Sentinel reported that Ferraro was indicted in a racketeering case in California with seven other men. Ferraro has previously won a lawsuit against the city for $970,000 regarding a 2013 application for a strip club in the Rusty’s Old 50 space.

Radomir Buzdum’s prior testimony before the Licenses Committee came under fire at the hearing. When previously applying for a license at the location Buzdum referred to the area as “all homeless people” and noted “this would be a perfect gentlemen’s club [location], it’s in the middle of a toilet.” Buzdum apologized for those comments at Monday’s hearing.

Rusty’s Old 50 was operated by siblings Diane, Boro and Radomir Buzdum. A police report from January 2015 notes that Rusty’s was found to have vertical poles for dancing and female dancers wearing just “pasties,” underwear and high heels.

What’s Next?

The proposed settlement with the three plaintiffs stipulates that the deal is contingent on a new club being granted at the N. Old World Third St. location. If Westown suggests a different location, then the parties to the settlement would need to agree to an amended agreement. If they do, there’s a good chance the Licenses Committee would approve the location and and the full council would approve the settlement (with Bauman and perhaps a few other council members objecting). But if no location can be agreed on for a strip club — and that issue has been a sore point for years — then the lawsuits will continue, with the possibility of the cost of a settlement rising ever higher.

Mayor Tom Barrett is monitoring the situation. Spokesperson Jeff Fleming told Urban Milwaukee “this is of ongoing concern to the mayor; clearly the city has to resolve the ongoing potential of liability.”

12 thoughts on “Eyes on Milwaukee: Why Strip Club Deal Fell Apart”

  1. Vincent Hanna says:

    What does a strip club consider to be a more discreet clientele? Rich white dudes who don’t want their wives to know they patronize strip clubs?

  2. Gary says:

    If you’re gonna protect Milwaukee’s morals, at least do it legally. Is a -$970K court settlement worth it to MKE when vice and drug squads would’ve probably generated some income from violations and maybe eventually shut it down if the club or patrons became less than discreet (like the Buzdum joint)?

    When’s the next tour of “Gypsy” coming to the Riverside or Milwaukee Theaters?

  3. Sam says:

    There are several strip clubs in the city with seemingly no ill effects on the surrounding properties commercial success. So the idea that this is somehow an economic development concern is pretty much hogwash. It’s puritanical and silly.

    Quit wasting my tax dollars fighting and losing to legitimate business interests. All you have to do is strictly enforce their liquor license and clobber them the next time they are up for renewal if any problems develop.

  4. Mama says:

    And if this proposal was completely on the level and good for Milwaukee, when then why would the applicant seek to locate it in a neighborhood he views as “a toilet”?

    Look, why doesn’t the Common Council wise up and just redo the zoning codes. Create a separate zoning code for “adult entertainment” and then don’t give any buildings in the City that zoning code. Force all applicants to make an appeal to the Board of Zoning Appeals where they’ll have the burden of proving that their business won’t affect the health, safety, and welfare of the surrounding neighborhood. That’s much harder than going through the Licensing Process and creating situations where the City has to pay million dollar settlements for improperly denying a liquor license.

  5. Jeff says:

    What I find most interesting is that all three of the listed owners live in conservative suburbs. Would their communities allow a strip club in their “downtown” districts?

  6. DemCo says:

    I think Mr. Krahn of Hartland, Mr. Modl of Germantown, and Mr. Buzdum of Watertown should propose such a fine amenity in their communities where they would surely be warmly received for their pro business acumen. Heck, they already own bars in those towns, just add strip clubs to the entertainment options, things are pretty sleepy there now, and it would improve the tax base.

  7. Krista says:

    As a woman and as a resident of the City of Milwaukee I am against this business. In my opinion….only perverted, narrow-minded, odious individuals come to a place of this nature, so don’t give me that line about “cater to a more discreet clientele”. To paraphrase Shakespeare….a rose by any other name is still a rose.

  8. CD says:

    yes…….lol

  9. Matt says:

    One might wonder why anyone would consider allowing strip club associates of an indicted (for Racketerring!) strip club owner to open a strip club. Why not just see if Frank Balistreri has some living associates who want to run a cash business with naked ladies downtown? There must be an unindicted racketeer somewhere who would like a shot at this.

  10. With all the money that a strip club can apparently take in and the large number of marketing firms available for hire in Milwaukee: Executive Lounge Gentleman’s Club is the best name they can come up with?

  11. Bob says:

    There is lack of any strong reason to locate a strip club in the midst of an area where a public/private partnership has been toiling for several years to rebuild the tax base and revitalize the neighborhood. The plan to take a payment (or a waiver to pay a settlement) in exchange for granting a license is blatantly illegal. This simply sets up an application mill, whereby others will propose strip clubs in order to collect their $1 million settlement from the city. Strip clubs are permissible but they are subject to locational criteria as are all land uses. The city needs to fix its land use regulatory framework to avoid getting into this boiling pot once again.

  12. Milwaukee Native says:

    Mama, RE: Create a separate zoning code for “adult entertainment” and then don’t give any buildings in the City that zoning code.

    This sounds like a set-up for more lawsuits against the City–for us taxpayers to pay off.

    I agree with Sam: Why haven’t existing strip clubs on Juneau & Water and South 2nd Street destroyed those neighborhoods after many years in business?

    The Common Council has already approved the complete glutting of this area’s bar scene by subsidizing the Bucks new “entertainment center,” so one more club will hardly tip any balance–no matter what kind. Of course, some bar businesses will likely go bust once Bucks Platz opens. So a strip club could actually draw more people downtown, even if they are “discreet” horny dudes.

    All the euphemisms and pretzel-twisting in this debate is hilarious.

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