Milwaukee prepares for strip club trial

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A businessman who wants to open a downtown Milwaukee strip club is trying to settle his lawsuit against the city.

A city attorney, however, is preparing to go to trial, which is scheduled for February.

In his lawsuit, businessman Jon Ferraro, owner of Ferol LLC and Six Star Holdings LLC, both based in Menomonee Falls, has contended city ordinances prevented him from opening an alcohol-free strip club in downtown. In August, U.S. District Judge Lynn Adelman ruled that Ferraro was entitled to recover damages if he could show that he would have run a strip club if it weren’t for the existence of regulations the city eventually repealed.

Ferraro, who has strip clubs in Middleton, Juneau and on Milwaukee’s west side, sued the city in October 2010 after it denied his application to open a strip club in downtown. He then applied for a tavern amusement license under one of those regulations, which was repealed before the city acted on his application. That prompted Ferraro to amend his lawsuit to claim the ordinance was unconstitutional.

Adelman ruled the ordinance was constitutional but determined the city could be liable to Ferraro for its failure to act on his application. The judge also said Ferraro submitted no evidence indicating he had “concrete plans” to open an alcohol-free strip club, but that the topic would be examined at trial, according to court documents.

Sarah Furey Crandall, the trial consultant to Ferraro’s companies in the lawsuit, said her client figured the city’s lack of action on his requests for a strip club cost him $1.1 million that he would have made had he been allowed to open it. She said Ferraro wants to settle with the city to avoid going to trial.

“There haven’t been settlement talks in a long time. The city is not interested,” Crandall said. “We have made a number of settlement offers. The ball is in their court at this point.”

Ferraro has two applications pending with the city for a strip club, either at 906 S. Barclay St. or 505 S. Fifth St. The applications are for full alcohol, Crandall said.

In his lawsuit, Ferraro claimed the ordinances the city repealed were unconstitutional because they contained no time limit for the city to decide on a license application, a point with which the judge agreed.

Adelman rejected the city’s contention that the lack of time limits in the city’s regulations did not matter because Ferraro could have sought a court’s review under state law. The law in question required a “final determination” from the city before a review could take place, according to court documents.

All that matters, Adelman said, is that the city imposed “a prior restraint” on Ferraro’s expression because of the lack of time limits. The city let Ferraro’s application “languish” for several months, according to court documents.

In 2012, the city repealed the regulations in question.

“We pointed to ways the ordinance was unconstitutional,” Crandall said. “They made changes to correct glaring errors. Why didn’t they do that years sooner?”

Assistant City Attorney Adam Stephens said the claim that Ferraro wanted to open a strip club without alcohol is “a manufactured case with manufactured damages.” The city is preparing for trial, he said.

“Our expert has their damages at zero,” Stephens said. “People like to have drinks and get drunk while watching exotic dancers. That’s the rule of thumb in these places.

“How many dry strip clubs have there been in Milwaukee? None.”

Stephens said he is aware of only one in the state, in Appleton, across the road from a bar. He said Ferraro never intended to open a dry strip club at the West Pittsburgh Avenue site, the application for which prompted the lawsuit.

The reason the city so “aggressively” defended itself, Stephens said, was that it wanted to protect the rights of neighbors.

“It takes a lot of time and effort to have these lengthy hearings to provide due process,” he said. “We do the same with taverns, restaurants and pool halls. Neighbors can’t run over the rights of applicants, but they should be given a fair shake.” Follow @DGiuliani_DR