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Hassan Davari, left, and Ali Davari of Houston await a Las Vegas City Council hearing on their application to take over a liquor license for a topless club. Photo by Jeff Scheid.

Thursday, February 22, 2001
Copyright © Las Vegas Review-Journal

Topless club license granted conditionally

The Las Vegas City Council unanimously approved a liquor license Wednesday for a pair of Houston investors seeking to open an upscale topless club near the Strip -- but not without a string of conditions.

Ali and Hassan Davari will be allowed to open The Board Room on land they are buying from political kingmaker Sig Rogich, subject to a review by the city six months after the club opens. More significantly, the brothers promised to surrender their liquor license without a legal challenge if any of the club's dancers are convicted on sexual misconduct charges.

"I see no problem with the type of facility you contemplate," said Las Vegas Mayor Oscar Goodman. "I think it's part of Las Vegas. If, in fact, it's a den for prostitution, that won't be tolerated by the council until prostitution is legalized here."

The liquor license was being transferred from Rogich to the Davaris, whose suitability to hold a license was called into question by a police background investigation.

The council's 6-0 vote to approve the transfer -- Councilman Michael McDonald abstained, citing a conflict of interest -- caps a contentious process that has been the subject of three ethics hearings, a police investigation and a legal challenge from the club's future neighbors.

Goodman suggested placing conditions on the license after Las Vegas police recited a litany of problems at several topless establishments the Davaris operate in Houston. The problems -- including multiple citations for prostitution, lewdness and drug use -- were contained in a confidential police report delivered to council members in December.

The police report prompted Jim DiFiore of the city's business licensing division to recommend that the council deny the Davaris a permit.

John Loretto, one of the Las Vegas detectives who conducted the background investigation of the Davaris, cited a two-year Houston police investigation of topless clubs that yielded an average of 51 arrests at each club owned by the brothers, and a conviction rate of 86 percent.

Other clubs investigated by Houston police averaged fewer than 16 arrests over the same time period, Loretto said.

Those arrests prompted Houston officials to try revoking the clubs' liquor licenses. The matter was settled when the brothers agreed to pay fines of $200,000 and close the establishments for 20 days.

Perhaps more damaging was Loretto's report of what happened during his undercover visit to one of the Houston clubs last fall with a local police officer. Loretto said a dancer at the club sat in the lieutenant's lap and placed his hand between her thighs. Another dancer performed a dance on Loretto, which included touching the detective's genitalia.

Such conduct is illegal in Houston, which has a law mandating a 3-foot minimum separation between topless dancers and customers.

"I certainly appreciate your time and effort," Councilman Gary Reese told the detective.

Reese, who was one of two council members opposing Rogich's license application in April, said he supported the transfer of that license because of the trust he has for lawyer Mark Fiorentino, who represented the Davaris.

"I trust Mark, and if Mark says that's what's going to happen, that's what's going to happen," Reese said, referring to the Davaris agreeing to the conditions.

Fiorentino argued that most of the problems cited in the police report occurred several years ago, and that some of the violations cited by Houston police would not have been illegal in Las Vegas. For example, Las Vegas does not have a minimum separation requirement between dancers and customers, which was the source of many of the citations.

Fiorentino added that the clubs' record improved after the brothers settled with the city of Houston in 1997. Since then, there have been 70 total citations in five clubs owned by the Davaris, Fiorentino said, adding that three-fourths of those cases were eventually dismissed or resulted in innocent verdicts. The attorney added that the Davaris have never had a liquor license revoked at any of their other clubs, even though such permits are subject to annual renewal in Texas.

"They're willing to prove to you that they're worthy of the privilege they're asking for," Fiorentino said.

The city can revoke any liquor license provided the license-holder gets due process. But the city has no formal guidelines on what should trigger a formal complaint against a licensee, making the Davaris' situation unusual.

The brothers plan to spend $7.4 million building and equipping their new club, at 2801 Westwood Drive, in an industrial area southeast of Interstate 15 and Sahara Avenue. They would lose their license if a prosecutor could prove that an illegal sex act took place on the premises that a manager knew about, or should have known about.

That could prove to be difficult. While Las Vegas police maintain that prostitution does not take place at area topless clubs, Fiorentino said that a private investigator he commissioned found such activity is not uncommon at city-licensed establishments.

Several council members interpreted the strict conditions as a means of "raising the bar" on topless-club owners. "I want this to be a better place," said Councilman Michael Mack. Councilman Lawrence Weekly, who, like Mack, is a candidate in the April 3 municipal primary elections, said he was glad the issue was nearly over. "We all will be so glad to put this behind us," Weekly said.