Adult club owners seek permit for downtown Modesto site

The building that housed the former Hero’s Sports Lounge and St. Stan’s Brewery at L and Ninth streets in downtown Modesto, Calif., is pictured on Friday, July 29, 2016. An adult cabaret business wants to buy the building.
The building that housed the former Hero’s Sports Lounge and St. Stan’s Brewery at L and Ninth streets in downtown Modesto, Calif., is pictured on Friday, July 29, 2016. An adult cabaret business wants to buy the building.

A Beverly Hills-based corporation wants to open an adult cabaret in downtown Modesto, featuring erotic dancing by strippers and other entertainment in the building that once housed Hero’s Sports Lounge and St. Stan’s Brewery at Ninth and L streets.

The corporation – Sassafrass 821 – is suing Modesto in federal court, alleging that the city has refused to process its application for a business license to operate an adult cabaret, even though the company claims the property is zoned for adult businesses and meets other city requirements.

The lawsuit further alleges that city officials initially said the project conformed with the city’s land-use policies but then changed their minds, saying the site was too close to land that could be used for housing. Modesto’s Municipal Code requires adult businesses to be at least 300 feet from residential zones. The lawsuit claims the city is violating the company’s First Amendment rights and improperly objecting to the cabaret on moral and political grounds.

“Historically, cities have disregarded their constitutional obligation to ensure freedom for their citizens,” said Santa Monica attorney Roger Jon Diamond, who represents Sassafrass and has extensive experience and success representing adult businesses. “We find there is a lot of hypocrisy. ... These clubs are protected by the First Amendment. The courts have ruled that erotic dancing still is protected.”

An executive with Sassafrass and with its parent company – Beverly Hills Real Estate Holdings – said the land Modesto claims could one day become housing is the parking lot of the nearby DoubleTree hotel. The executive would identify himself only by his first name, Tony, because he said he is “an extremely high-profile” businessman.

“It will come out later,” Tony said about his full name.

City Attorney Adam Lindgren said Modesto received the lawsuit Friday. He said the city would not argue the case in public. “We are carefully reviewing and evaluating the allegations,” he said. “We have one of the top First Amendment lawyers in the state representing the city. She has successfully litigated these issues.”

The attorney is Deborah Fox with the Meyers Nave law firm. Lindgren also works for the firm. Modesto contracts with the firm for city attorney and other legal services.

The cabaret owners have put down a deposit for the building, and the property is in escrow. The purchase will be all cash, according to Tami Gosselin, the Century 21 M&M Associates real estate agent who represents the building’s owner, Larry Mariani of Stockton. She said an unrelated legal dispute between Mariani and the owners of the former St. Stan’s Brewery is expected to be resolved by mid-September.

Victor Franco Noval is the agent for Beverly Hills Real Estate Holdings and Emilio Ferrero is the agent for Sassafras 821, according to the secretary of state’s website. Noval could not be reached for comment. Ferrero is slated to be the cabaret manager and submitted the business license application to the city June 29.

Ferrero said in Spanish that the owners plan to invest $1 million in renovating the building. He said it will have a restaurant and other amenities. “It would be the most elegant place in Modesto,” he said. “There would be no prostitution, no alcohol, no drugs. It would be a place the people can be proud of.”

City spokeswoman Amy Vickery said it also would be the only strip club or cabaret in Modesto if the project proceeds, though Bee archives show two similar businesses were operating in Modesto in the mid-1990s.

The proposed cabaret would be in Councilman Tony Madgrigal’s district. When asked about his thoughts on an adult cabaret downtown, he said: “I think it’s important to balance our need to attract businesses to Modesto with our need to make sure that those new businesses are a good fit for our community.”

When asked whether he thought the cabaret would be a good fit, Madrigal said: “We definitely need to learn more about how this type of business could impact our downtown, our public safety resources, and I guess you could say the integrity of our neighborhoods near that location.”

The City Council is set to meet in closed session Wednesday with its attorney to discuss the lawsuit.

The lawsuit alleges that Modesto has not set aside sufficient land as required by law for adult businesses and that the city has too much discretion in deciding whether an adult business meets its zoning rules. Modesto allows adult businesses on land zoned for light or heavy industrial use.

The lawsuit asks a judge to rule that the property at Ninth and L streets qualifies for an adult cabaret and that Modesto must process the business license application, and asks for monetary damages from the city as well as having it pay Sassafrass’ legal costs.

Bee reporter Rosalio Ahumada contributed to this report.

Kevin Valine: 209-578-2316.