In a little-noticed development, the D.C. government has joined the Trump administration in prohibiting legal sexually oriented businesses such as nude dance clubs and adult video stores from receiving disaster relief loans and special grants to help them survive the coronavirus business shutdowns.
Both D.C. and U.S. Small Business Administration officials say bans on disaster loans and grants for sexually oriented businesses have been in place for years and must be followed under the emergency relief programs created during the past month by Mayor Muriel Bowser, the D.C. Council, and the U.S. Congress.
But D.C. nightlife advocate Mark Lee, who has served as coordinator of the D.C. Nightlife Council, a restaurant, bar, and nightclub business association, said the mayor and Council have the authority to lift the D.C. restrictions on adult businesses during the coronavirus emergency but have declined to do so.
At least one longtime LGBT nightclub, Ziegfeld’s-Secrets, which offers nude male dance performers, is among the city nightclubs forced to shut down during the health emergency that cannot apply for a disaster relief loan or city grant because of the adult business restriction.
“The D.C. government is not treating all nightlife venues equitably or fairly during the emergency,” Lee told the Washington Blade. “What’s worse, when these inequities have been brought to the attention of city officials, they have refused to remedy the problems,” he said.
“This will directly harm these venues and reduce the overall number of establishments able to financially survive,” Lee said.
Lee said the mayor and D.C. Council have also initially declined to lift yet another restriction the mayor’s office put in place last month that prohibits nightclubs of any kind to provide carryout food and beverage service to help them generate revenue during the shutdown period, which is expected to last until at least June if not longer.
He noted that more than 600 bars, restaurants, hotels, and multipurpose establishments are currently providing carryout and delivery service for food and beverages while nightclubs – including those that have operated as full service restaurants – are banned from providing carryout service.
Lee said that when he inquired as to why this restriction was put in place, Shawn Townsend, director of the Mayor’s Office of Nightlife and Culture, told him members of the mayor’s staff became worried when they saw news reports from Washington State that strippers were being employed to deliver carryout orders.
Under D.C. law, only nightclubs with a special license provision that allows nude dance performances can provide such entertainment. About a dozen of the city’s 36 licensed nightclubs have a nude dance provision.
“Incredibly, the only rationale given for this prohibition is that city officials fear nightclubs with a nude-dancing performance permit will utilize strippers to staff carryout windows or deliver orders,” Lee said.
The Blade was unable to find any nightclub that has announced it would utilize strippers to deliver carryout food orders.
Among the nightclubs barred from providing carryout food service is DC9, which has a large LGBTQ clientele at its U Street, N.W. location two doors down from the gay bar Nellie’s. Co-owner Bill Spieler told the Blade he and his wife have provided full restaurant and delivery service for at least nine of the 15 years they have been in business.
“We would like to do a carryout business now,” he said. “It would help us pay the rent.”
Meanwhile, D.C. government observers believe the city’s policy of not allowing adult oriented businesses to obtain disaster relief loans or grants is modeled after the similar ban put in place by the U.S. Small Business Administration in 1996.
“It is a longstanding policy of the District of Columbia Government that adult entertainment venues are not eligible for small business grant programs,” said John Falcicchio, Bowser’s chief of staff and the Acting D.C. Deputy Mayor for Planning and Economic Development.
Carol Chastang, a spokesperson for the SBA, told the Blade in an email that the 1996 SBA ban on allowing adult businesses to receive SBA disaster loans or grants is part of the Code of Federal Regulations for disaster loan programs known as Section 123.302.
It states, “You are not eligible if your business presents live performances of a prurient sexual nature or derives directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature.”
D.C. Council member Anita Bonds (D-At-Large) said no discussion about adult businesses came up during the Council’s deliberation over the coronavirus emergency relief legislation the Council passed last month providing special city micro grants for small businesses, according to Bonds spokesperson David Meadows.
“She says she believes that all certified businesses that are operating in good standing should have the right to apply for these micro grants,” Meadows said.
D.C. Council Chair Phil Mendelson (D-At-Large) told the Washington City Paper he plans to investigate the rationale for banning nightclubs from providing carryout food and beverage service during the emergency shutdown period.
Council member David Grosso (I-At-Large) told the Blade in an email that the city’s small business grants and loans were established to ensure that their workers have a job to go back to when the coronavirus crisis is over.
“For the D.C. government to pursue a moral agenda during this unprecedented public health crisis seems misguided and could have serious negative economic impacts on these individuals,” Grosso said. “Any business that has been deemed unessential and therefore forced to close by the mayor’s order should be eligible for this type of assistance.”