Dennis Williams, CFO of Trop Inc., which owns the club.
Dennis Williams, CFO of Trop Inc., which owns the club.

Representatives for the Pink Pony strip club say they have offered to pay the city of Brookhaven $200,000 a year in licensing fees to settle their ongoing lawsuit, but city officials haven’t accepted it.

That amount, offered for an undisclosed long-term period, doubles the amount the club has paid DeKalb County in fees each year, said Dennis Williams, chief financial officer of Trop Inc., the corporation that owns the club.

“We never really got a yes or no,” Williams said. “They said they’d take it under consideration.”

Brookhaven City Manager Marie Garrett declined to discuss the offer.

“We cannot comment on that. It’s pending litigation,” Garrett said.

In May, the owners of the strip club sued the city after Brookhaven City Council approved a sexually-oriented business ordinance that would ban nude dancing with the sale of alcohol. In December, a DeKalb County judge dismissed the lawsuit, and the club appealed the decision shortly after. The case is now awaiting a hearing in Georgia Supreme Court.

Meanwhile, Brookhaven officials denied the Pony’s application for a 2014 liquor license, a decision that was upheld recently by the city’s Alcohol Board.

At the board’s first meeting Jan. 27, the four members present took a split vote, with two siding with the city and two with the club. A majority of the five-member board would have been needed to overturn the city’s administrative denial. Enforcement is now at the city’s discretion.

The Pink Pony strip club is located in Brookhaven.
The Pink Pony strip club is located in Brookhaven.

“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.

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

Scott Bergthold, the lawyer who was brought in to draft the city’s sexually-oriented business ordinance, said the state 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 because Jack Galardi is no longer involved with the business,“they had a duty to notify the state of that.” He said the club also lacks a Brookhaven license, as their 2013 license was issued by DeKalb County before Brookhaven became a city.

“Pink Pony does not have a 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,” board member Caskey said.

At the state level, the club is licensed using its corporate name, Trop Inc. 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.

Williams said the state 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.

“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.”

During an interview in his office at Galardi South Enterprises, Williams said the employees of the Pink Pony are concerned about what will happen to the club.

“I get asked all the time, how are we doing? Are we going to lose our liquor license?” Williams said. “We lose sleep at night. We’d like to get this behind us.”

But Mike Kap, chief operating officer for Galardi South Enterprises, said he doesn’t believe the city will negotiate.

“I don’t think there’s anything we could offer them that they would accept,” Kap said.