City Wins Part,Loses Part of Phantom Venture’s Case

By Seth Daniel

Federal District Court Judge Indira Talwani gave a bit of a win and a bit of a loss to the City in the Phantom Ventures’s suit-and-tie strip club case, throwing out most of the case, but remanding two counts back to the Zoning Board of Appeals (ZBA) for further review.

“For the foregoing reasons, Plaintiff’s (Phantom) Motion for Partial Summary Judgment is granted as to Count III and IV, and denied in all other respects,” read the 22-page decision. “Defendants’ (City of Chelsea) Cross-Motion for Summary Judgment is granted with respect to Count I and II, and denied in all other respects. The permit application is remanded to the Zoning Board for further proceedings consistent with this order.”

City Solicitor Cheryl Fisher Watson said she could not comment on the case.

City Manager Tom Ambrosino said they will follow the court’s direction.

“The City intends to follow the instructions from the District Court,” he said in a statement. “The matter has been remanded to our local Zoning Board of Appeals for further deliberation, and those deliberations will occur in compliance with the Court’s directive.”

It was not certain what remanding the case to the ZBA would mean, as it is quite rare and most such cases are remanded to a state Superior Court for further review. It was postulated that Phantom Ventures, which is seeking a building permit to renovate the old King Arthur’s strip club location in the Produce Market to a high-class adult entertainment facility, could come in under another argument and ultimately receive the permit as the court ruled the City’s adult entertainment zoning ordinance was unconstitutional. The ZBA denied Phantom Ventures a building permit in 2015 after a long hearing in the Senior Center where many members of the community came out against the proposal.

One victory against the tide of absurdity was the fact that the judge dismissed the Phantom argument that nude dancing at a strip club was an art form under the same auspices as an art gallery with paintings. They argued that because the City’s zoning ordinance didn’t abolish art galleries from the zone, they should be considered under the same “art” use.

That was an argument that many did not expect in 2015, and drew no shortage of chuckles when introduced. However, Judge Talwani disagreed wholeheartedly.

“Plaintiff argues that it was entitled to a building permit when it applied because live adult nude dancing was not specifically delineated as an activity within the Code prior to the recent amendment, and the Zoning Board should have found that adult live nude dancing was an ‘Art use’ permitted as of right in the Industrial District,” she wrote. “Defendants contend that the Zoning Board correctly found that live adult nude dancing was not an ‘Art use.’…The Zoning Board did not err in rejecting Plaintiff’s contention that nude dancing falls within the definition of Art use.”

The judge also rejected the argument, which many believed would prevail, that the use was grandfathered since it was a strip club previously under the King Arthur’s name. The judge found, however, that wasn’t the case. While the grandfather clause in state law applies to many different uses, state law specifically excludes live nude dancing from being grandfathered.

What she did find is that the zoning ordinance enacted previously, and even the updated one amended last November, do not meet Constitutional muster in limiting adult entertainment venues to the Highway Business District, Shopping Center District and Industrial District.

“Defendants have presented no evidence as to what matters were considered by the City in making its determinations that ‘adult entertainment establishments’ are only allowed in the Highway Business and Shopping Center Districts, and only by special permit,” read the decision. “Defendants present no studies that were used to decide why ‘adult entertainment establishments’ are limited to the Highway Business or Shopping Center Districts…Here, there is no evidence on the record as to what the City of Chelsea relied upon when enacting its zoning ordinance.”

That meant that the ZBA’s decision had to be annulled, as it relied upon the zoning ordinances on its decision to deny.

So, most of Phantom Ventures’s arguments that were made were thrown out, but Chelsea rationale for rejecting the arguments were also thrown out.

The matter will simply get a fresh new start with a fresh argument at the ZBA. City officials said the new hearing had not been scheduled.

At Monday’s City Council meeting, City Manager Ambrosino presented a new adult entertainment ordinance to the Council to fix the unconstitutional portions pointed out by Judge Talwani.

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