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San Diego- “secondary market” for Clubs

San Diego- After more than 15 years in the adult entertainment business in San Diego as a dancer and promoter, Joy Wallace has decided to open her own strip club.

She thinks her chances for success are better in Tulsa, although San Diego is much larger and a place where she is well connected.

“Here if a girl’s hair touches a guy, she can get in trouble,” Wallace said. “There, they say, ‘Yeah, we’re the Bible Belt. How much for a lap dance?'”

Wallace said nude dancing was lucrative in San Diego when she got her start in the late 1980s. The rules were looser, and there were many more Marines and Navy recruits in town.

“You’d have the Marines on one side of the bar and the Navy guys on the other, and they would outbid each other,” Wallace said. “You could make $800 on a good night.”

Now, she says, a dancer is lucky to make $100 in a night at the Body Shop, a strip club on Riley Street in the Midway District.

The Navy base closings of the early 1990s, a series of city ordinances restricting activities inside the clubs and a family-friendly image of San Diego pushed by the San Diego Convention & Visitors Bureau have contributed to a tough business environment for strip clubs.

Sex-industry insiders consider San Diego a “secondary market” for strip clubs. All told, San Diego County is home to about 20 clubs. This contrasts with similarly sized metro areas such as Miami, Houston and Atlanta, each of which has 50 or more clubs.

Background: Corruption charges against three San Diego city councilmen cast a spotlight on the region’s adult entertainment businesses. The trade has evolved from the sleazy peep shows and X-rated theaters of decades past into a multimillion-dollar industry that includes tidy boutiques and pricey night clubs – all blending into the local economy. Peter Luster, who oversees six local clubs owned by the Michigan-based Deja Vu chain, said the strip-club business is as strong as it’s ever been nationwide, but San Diego is “not a favorite of the industry.”

The clubs are privately owned and do not release financial information. However, interviews with industry insiders and research by the San Diego Union-Tribune suggest the clubs generate $20 million in annual revenue, and could bring as much as $200 million into the local economy each year.

Luster said there are individual clubs in Las Vegas and Atlanta that generate as much revenue as all the clubs in San Diego combined. He said the revenue of a typical strip club here, about $1 million to $2 million a year, is about the same as a McDonald’s franchise.

“The investments are comparable, and so are the returns,” Luster said. “Of course, you don’t have problems with City Council if you own a McDonald’s.”

“The clubs are geared toward illicit activities, vice crime and lowered property values,” said Scott Bergthold, a Phoenix lawyer who wrote El Cajon’s ordinance governing strip clubs. “Many commercial ventures are not going to be attracted to locating next to a strip club.”

In San Diego, strip-club owners have had more than their share of problems with the City Council.

Last September, Michael Galardi, owner of the strip club Cheetahs, admitted he gave money to San Diego City Councilmen Ralph Inzunza, Michael Zucchet and the late Charles Lewis to “corruptly influence them” to repeal the “no-touch” rule at strip clubs. From the beginning, all three councilmen denied any wrongdoing.

Local attitudes toward the clubs are key, Luster and others say. Politicians in other parts of the country are comfortable with the moral issue, and focus instead on the money the clubs bring to the tax rolls and the jobs they create.

“There is still good money to be made, but it’s not as busy as other places,” said Angelina Spencer, executive director of the Association of Club Executives, a strip-club trade association. “It has a lot to do with the zoning, laws and population.”

Spencer points to Atlanta, which has what she calls a reticent alliance between law enforcement and politicians and the clubs.

“When it comes to adult entertainment, you are talking about a moral argument,” Spencer said. “Once the politicians get past that, they realize the clubs are tax generators. The bottom line is dollars.”

Those familiar with the local industry say the city of San Diego’s politicians have not gotten past the moral argument.

Strip clubs, adult bookstores, escort services and massage parlors are all among the businesses regulated by police.

There is a long permitting process. Once open, clubs must comply with a list of rules to avoid being fined or suspended or having their licenses revoked.

“The rules are stricter in San Diego,” said Paul Richter, owner of the Body Shop. “If you talk about major metros, San Diego has always been behind the times and always more strict.”

City leaders and state agencies started passing tough zoning and conduct laws aimed at the industry 35 years ago and have not let up.

The first major crackdown took place in the late 1960s, when the state Department of Alcoholic Beverage Control banned alcohol at all totally nude clubs, which meant a club could not allow bottomless dancers if it wanted to serve alcohol.

In the 1970s, Richter challenged the department’s rules, saying they restricted his First Amendment rights. He pushed the case to the U.S. Supreme Court, which declined to hear it.

In 1987, the San Diego City Council passed a law establishing a 6-foot buffer zone between customers and nude dancers on stage. And new limits were placed on where in the club dancers were allowed to be nude.

The City Council toughened the laws further in 2000, banning the touching between dancers and customers that occurs during one-on-one, off-stage “lap dances.”

Dancers, longtime club owners and vice officers remember the 1970s, when the city was home to dozens of strip clubs, adult theaters and massage parlors, mainly on Rosecrans Street, Fifth Avenue and lower Broadway.

A patron was entertained early one evening by a dancer at the Deja Vu club in San Diego’s Midway District, home to several adult-oriented businesses. “There were a lot of strip clubs, lots of adult theaters,” said San Diego police Detective Robert Brown, who worked on the vice squad in the 1970s. “It was a Navy town, and they made money.”

Richter remembers sailors docking at the Broadway pier and hitting the clubs.

“There were clubs on both sides of the street all the way up and down Fourth and Fifth avenues,” Richter said.

The clubs started going away in the early 1980s, as downtown was cleaned up and transformed into the Gaslamp District. But the industry stayed relatively strong until the severe military cutbacks of the early 1990s.

Almost overnight, the area lost thousands of young Marine and Navy personnel, the clubs’ core clientele.

Today, the clubs are fewer, and ownership is more concentrated. The operations cater to a clientele that is more demanding than young servicemen.

“The industry has changed in the last 10 to 15 years with the clubs becoming more upscale,” said Don Waitt, the publisher of Exotic Dancer Magazine.

Waitt says gentlemen’s clubs aren’t part of the sex industry, but actually part of the hospitality industry. The clubs, he says, have to compete with nightclubs, sports bars and movie theaters.

“Fifteen years ago, you went to these places … to ogle the women, and many of the women were unattractive,” Waitt said.

“Now you can be served fine scotch, a good meal and get valet parking. And the women are attractive enough for Playboy.”

Additionally, industry insiders say, the dancers are more sophisticated. Most are independent contractors and highly mobile. They think nothing of traveling to cities hosting big events such as the Super Bowl or political conventions.

These days, dancers might live in San Diego, but many earn most of their money elsewhere. Some dancers live in San Diego during the week and spend weekends in Las Vegas.

“They make more in a weekend there than they do an entire week here,” Luster said.

Joy Wallace, who has some experience working in Las Vegas, said Luster’s estimate is low. A weekend in Las Vegas is equal to a month in San Diego, she said.

“The last time I worked in Vegas, I made $3,000 in one weekend,” Wallace said.

About 1,500 adult dancers are registered with the San Diego Police Department. And while there really is no average salary for dancers, most agree that it is not as lucrative in San Diego as it used to be.

Dancers in the high-end clubs can make several hundred dollars on a weekend night, but most struggle to make $100 a night, many of them earning only what they make in tips.

Danyle Irvin, who recently began working as a dancer at Minx Showgirls on University Avenue in City Heights, said she was ecstatic with the $107 she made on her first night – far more than she would earn working a shift at a sandwich shop where she also had applied.

Another dancer at Minx Showgirls, who did not want her name published, said she averages closer to $45 a night.

Both Luster and Waitt say it is a mistake for a city in San Diego’s financial straits to shun strip clubs. They contend that the clubs, even in reduced numbers, are vital to a city’s economy.

“If San Diego shut down every gentleman’s club in the city, you would see a marked decrease in the convention and tourism business within a year or two,” Waitt said.

Sal Giametta, spokesman for the San Diego Convention & Visitors Bureau, wasn’t so sure. He said San Diego sells itself differently than a city such as Las Vegas.

“We promote that San Diego has something for all ages and interests,” Giametta said. “We are known as a family destination.”

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