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Milwaukee's Daily Magazine for Wednesday, July 23, 2014

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In Bars & Clubs

Owners of Silk Exotic and 618 Live on Water have reportedly reached a deal on the Downtown club.

In Bars & Clubs

618 Live on Water is popularly known as the Ladybug Club.

Silk owners reach deal with Ladybug club


Jon Ferraro, the operator of Silk Exotic, said Tuesday he had reached a deal with the Habib Manjee, the general manager and licensee of the troubled "Ladybug Club," 618 Live on Water, to take over the club and open a Silk Exotic strip club there.

Ald. Bob Bauman, who represents Downtown, has said he is in favor of the new arrangement.

"It's up to the people around there," Bauman said. "Do they want violence and guns or exotic dancers?"

Details of the accord were not disclosed.

While the application for a new Silk on Water Street will soon be filed, Ferraro has also reapplied for a theater license for the city-owned property across the street from the Bradley Center. Center officials, along with the Bucks, Admirals and Marquette oppose the opening of a strip club at that location. No action has been scheduled on that application.

Nine months ago Federal Judge Lynn Adelman ruled in a case before him that the failure of the City of Milwaukee to act on an application by Silk Exotic to open a strip club in Downtown was a violation and the City was liable for lost revenues for the club.

The club's owners maintained the venue would have opened in September 2010 and the judge ruled that the period for lost damages ran from then until September 2012.

In preparing a claim for damages to the city, the operators of the club, who also have clubs on the west side, in Juneau and in Madison, hired a respected forensic accounting firm to determine just what the damages would be. The report offers an intimate glimpse into how much money strip clubs make.

Using figures from Silk Exotic on Silver Spring Drive in Milwaukee the report, by Peters & Associates, says that an average of over 1,300 people patronized the the club each week during the 77 weeks from 2010 to 2012. Peters reported that revenue at Silk Exotic was $53 per customer and the profit was $16 per customer.

Ferraro has applied for a theater license to operate a non-alcoholic strip club that would feature nude dancing and be open for 24 hours. Peters estimated that given the longer hours, higher admission charge and a minimum drink charge, revenue at that club would be $50 per customer.

The amount of the claim is $1.1 million, which Peters estimates is the lost profit for the 77-week period.

In the past Ferraro has offered to waive that claim if a license to operate is granted. The city has refused to consider that waiver offer in conjunction with a license application, preferring to keep the two matters separate.

As part of its forensic examination, Peters & Associates conducted a survey of non-alcoholic clubs around the country and a survey of customers at Silk Exotic. They reported that a majority of customers at Silk Exotic said they would visit a Downtown club.

Ferraro said he was also in the process of negotiating leases with a number of other locations.

"We still prefer the Bradley Center location," he said. "But as long as we are within five minutes or so from Downtown, we could make it work."


Talkbacks

Photodavie | Dec. 17, 2013 at 2:05 p.m. (report)

They could do some serious lunch & happy-hour business downtown. Anything is better than the current Lady Bug Club. There were fights there EVERY night during the summer.

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