Central City is one of Colorado’s few gaming towns. (Denver Post file photo)
A months-long debate over whether to allow a strip club in the gambling town of Central City has moved from the political arena to the legal arena, and put the city on the defensive.
In late 2022, the city sold a three-story brick building along its Main Street to RCI Holdings for $2.4 million. RCI, a Texas company that owns strip clubs in Denver and elsewhere, claims that city officials also promised then to let RCI operate a steakhouse and cabaret there.
“We have had building plans approved to build and to expend over $3 million upgrading the property for this use,” RCI CEO Eric Langan told the Central City Council on Tuesday night. “We went into this business relationship with the city with eyes wide open.”
But a cabaret isn’t allowed. Under Central City ordinances, sexually oriented businesses cannot be within 1,000 feet of schools, churches, homes, parks and daycares. In a town of 800 people spread over two square miles, that is effectively a citywide ban on strip clubs.
So, since May, the City Council has weighed whether to shorten the proximity limit to 150 feet. Its meetings have drawn a plethora of public comments in opposition, including on Tuesday, when the council voted 3-0 to deny RCI’s appeal of a previous denial for a permit.
“We’re all aware of the criminal activities drawn by RCI: prostitution, drugs and even death,” resident Peter Droege told the council that night. “Economic development is important in this city. I ask the council to consider what the outcome would be if Central City had a reputation of not being safe. I think we would lose casino partners and other visitors.”
“Putting the cart before the horse is what has happened,” said resident Rebecca Blondo. “Someone who wants to put a sexually oriented business in a building that isn’t permitted for that shouldn’t have purchased that property. It’s not on us to fix that problem.”
RCI wants to open Rick’s Cabaret, an upscale steakhouse now under construction, by October to improve what it considers to be a dearth of non-casino entertainment options there. A major proponent is Mayor Jeremy Fey, who is friends with RCI’s CEO, Langan, and has accordingly recused himself from votes on the matter, including Tuesday’s.
Although public comments were overwhelmingly opposed to RCI’s plans that night, one Black Hawk resident suggested they allow Langan and RCI to build Rick’s Cabaret in order to avoid a lawsuit that RCI would likely win and that would “bankrupt” Central City.
Her concerns were at least partly borne out the next day, when RCI filed a federal lawsuit that accuses Central City of violating its First Amendment free speech rights, its Fifth Amendment due process rights, and its 14th Amendment due process rights.
The Diamond Cabaret Denver at 1222 Glenarm Place is one of five local strip clubs owned by RCI. (BusinessDen file)
“The First Amendment protects not only popular and accepted forms of expression, but also those disfavored by public opinion,” Wednesday’s lawsuit states, “and the City of Central’s course reversal after selling (130 Main St.) to the plaintiffs for a specific business purpose upsets their settled expectations and violates their due process rights.”
City Manager Daniel Miera declined to comment on the litigation while it is pending.
RCI is represented by the attorneys Aaron Bakken with Johnson Bakken Greely Smith in Centennial, plus Benjamin Allen and Casey Wallace with Wallace Allen in Houston.
RCI owns five clubs in the Denver area, including The Diamond Cabaret Denver and La Boheme Gentlemen’s Cabaret downtown. Last year, it paid $4.5 million for 8,500 square feet at 1400 Arapahoe St. with plans to open a military-themed sports bar, Bombshells.
