The Pink Pony strip club took another blow in its fight with Brookhaven after losing an appeal of the city’s decision to deny the club a 2014 liquor license.

At the Brookhaven Alcohol Board’s first meeting Jan. 27, the four members present took a split vote, with Joseph Patin and Richard Grice voting in favor of upholding the city’s decision to deny the application and Glianny Fagundo and Adam Caskey voting in favor of the Pink Pony. Board member Michel Arnette was absent.

A majority of the five-member board would have been needed to overturn the city’s administrative denial.

“We still have a valid state license and we will still operate legally until the Supreme Court or someone else affirms or reverses the DeKalb judge’s decision,” said Aubrey Villines, an attorney for the Pink Pony, referencing the lawsuit between the club and the city that is headed for Supreme Court.

The issue with the Pony’s license largely revolves around the 2012 death of its late owner, Jack Galardi.

Both a state and local license – issued by the county or city, as applicable – is required for a business to legally serve alcohol.

Brookhaven Finance Director Bonnie Kline said she denied the Pink Pony’s application for a 2014 license because she said the company did not hold a valid state license.

“We found the state license was not proper because it had a person on it that was not even alive,” Kline said.

She said she sent a final letter of denial on Jan. 24 after a DeKalb County judge dismissed the club’s lawsuit against the city.  The owners of the strip club sued the city over its sexually oriented business ordinance, which would prevent the club from selling alcohol and offering nude dancing. The club’s owners are now appealing that decision in Supreme Court.

“The ordinance prevents us from issuing a license to a sexually oriented business,” Kline said.

The Brookhaven Alcohol Board is appointed by the City Council and meets only when someone asks to appeal the decision of the city’s finance or police departments to issue or revoke a license to sell alcohol in the city. The board does not have the ability to issue an alcohol license.

Scott Bergthold, the lawyer who was brought in to draft the city’s sexually oriented business ordinance, argued that there are two main problems with the Pink Pony’s request.

He said the Georgia Department of Revenue, which issues state licenses, requires that the license holder be actively engaged in the business. Also, in order for the state license to be valid, the business must also hold a valid county or municipal license.

He said not only is Jack Galardi no longer involved with the business, making the state license invalid, but “they had a duty to notify the state of that,” Bergthold said. He said the club does not hold a Brookhaven license, as their 2013 license was issued by DeKalb County before Brookhaven became a city.

“Pink Pony does not have corresponding, valid city of Brookhaven alcoholic beverage license. They’ve never had one,” Bergthold said. “They have to have a local license for the state license to be valid.”

Alcohol board members questioned the logic of the “chicken and egg” scenario in which businesses must hold one license in order to obtain the other.

“It seems to me there’s got to be a lot of businesses in the city of Brookhaven that have to be in very similar circumstances. To me, it’s a dog chasing its tail,” Caskey said.

Villines, the lawyer for the Pink Pony, said that at the state level, the club is licensed using its corporate name, Trop Inc.

Trop Inc. Is still the license holder with the state, though now Teri Galardi, the daughter of Jack Galardi, acts as the trustee for the corporation, Villines said.

Villines said that shouldn’t be an issue at all. Many businesses register under a corporate name to obtain a state liquor license, he said.

“Therein lies the rub. You’ve got a city that licenses the person and a state that licenses the corporation,” Villines said. “It’s going to be true of every person seeking an alcohol license in Brookhaven.”

He showed the board licenses for a restaurant down the road from the Pink Pony, with a corporate name on the state license and an individual on the Brookhaven license.

“We’re licensed as Trop Inc. Not Jack Galardi, Not Teri Galardi, not JEG Family Trust,” Villines said.

Dennis Williams, chief financial officer for Trop Inc., said the Department of Revenue has verbally been informed of Galardi’s death. However, the ownership of Trop Inc. is also being decided in court, so formal documents will not be submitted to the department until it is resolved, he said.

Villines said along with the club’s application for a Brookhaven license, he sent a letter to the city explaining Galardi’s death and asking for further instructions.

“We explained and basically asked for direction. There was no deception here,” Villines said. “The only thing inconsistent is we’re not getting a license.”