Tuesday, February 27, 2024

‘Our building is completely full’: NHC argues parking needs justify eminent domain of strip club

New Hanover County Commissioners authorized the eminent domain purchase of Cheetah Gentlemen’s Club Monday. (Photo courtesy of Peter Castagno)

NEW HANOVER COUNTY — Two months after the state treasurer criticized the county for building its government center next to a strip club, New Hanover County exercised its rights to purchase the Cheetah Premier Gentlemen’s Club via eminent domain. County officials were adamant the decision was unrelated.

READ MORE: NH County transitions into new government center

ALSO: NHC, once again, defends Project Grace to LGC, vote set for October

“Our building is completely full,” Commissioner Dane Scalise told Port City Daily. “There are people driving around trying to find parking spots. We need more parking. That’s why we’re doing it.”

Monday night, New Hanover County commissioners approved a resolution for the $2.36 million eminent domain purchase of Cheetah Club to expand parking for the adjacent government center. 

The issue wasn’t presented on the agenda but rather tucked in at the end of the meeting and voted on unanimously by commissioners. County Manager Chris Coudriet raised the motion by citing the property’s county tax ID number but did not mention the business name.

Commissioner Jonathan Barfield said the issue was not listed because it was “time sensitive” and issues sometimes arise between crafting an agenda, released the Wednesday before a Monday meeting, and the board convening. 

Commissioners said they had been deliberating for months and even made an offer on the property before taking the eminent domain route. 

The county recognized the necessity for new parking since moving into its new government building in spring, according to Scalise. The county authorized a real estate broker to make the $2.36 million offer on the county’s behalf, but it was turned down, Scalise said.

Property owner Jerry Reid said he frequently gets offers of the site from real estate brokers, which he usually rejects. He relays to interested parties they would first have to ask the renters if they were open to the deal because they have the right of first refusal. Management of Cheetah Club could not be reached by press.

“I don’t really know quite what it’s worth because I didn’t intend on selling it,” Reid said.

He purchased the building for $1.45 million in 2011.

Reid said he never received a formal offer from the county about its proposal and added the broker who contacted him about purchasing the property did not identify themselves as a representative of the county or city.

“I asked, ‘Are you with New Hanover County or are you with Wilmington City?’ [The representative] said, ‘I do not have a right to disclose,'” Reid recalled.

Scalise said the county authorized a real estate broker to handle the transaction.

“I’m not sure what was communicated, but I trust that our broker did everything possible to best represent the county’s interests,” he said. “As will the lawyers we authorized yesterday. Again, no lawsuit has been filed yet, and I’m sure our lawyers are happy to speak with the property owner.”

The county is currently working with lawyers from Ward and Smith, P.A. on the issue. Commissioners Barfield and Scalise did not know when the case would move forward.

Reid insinuated the adult club’s proximity to the government center could have been a factor in the county’s decision-making to take over the property. The county’s offices, even its former building, have been located next to the entertainment venue — which has been various strip clubs — as well as Ten Pin Bowling Alley and Breaktime Billiards for more than 20 years.

County spokesperson Alex Riley said he could not answer if the county is looking into its other neighboring properties. The county released a statement Tuesday and noted it wouldn’t take further questions:

“This situation is an ongoing matter and we will be providing more information as it becomes available. Currently, we do not have any additional information,” Riley wrote to media.

“Some people really don’t like the adult club. I get it, understand,” Reid told Port City Daily. “But there’s some businesses I don’t like.”

Reid said he’s been involved with the 143 S. College Rd. property since 1997. He formerly owned the Pure Gold strip club, which occupied the site for 20 years, before Cheetah took over the business in 2017.  

“We’ve never been shut down,” Reid said. “Never had violations and I don’t know about the tenants that are there now. I don’t believe they’ve ever had violations, any major issues.” 

State Treasurer Dale Folwell called out the county for building its government center next to the strip club during a Local Government Commission meeting for approval of Project Grace’s financing. Commissioner Scalise was defending the public-private partnership of Project Grace — the $52-million government center also was a public-private partnership— and told Folwell at the September meeting the county wanted a say in what would be built to redevelop the block.

In response the treasurer said: “You built your new county building beside a men’s club, so I don’t see much evidence you care about the development next to you, if you build your county building next to a strip club.”

“My personal perspective, I do not like strip clubs, but that has absolutely nothing to do with my official responsibility,” Scalise told Port City Daily Tuesday. “And the reason we are pursuing this has absolutely nothing to do with it.”

Alternatively, Barfield told Port City Daily: “I think that optics has always been an issue.”

Port City Daily asked the county the last time it took property via eminent domain — which refers to the power of a government to seize private property for public use. Commissioners Barfield and Scalise said they were unaware of any previous properties absorbed by the county via eminent domain. Spokesperson Riley would not answer further questions about the deal.

State law mandates eminent domain can only be enacted if the government can reasonably show the land is for public use only. It also requires the government to fairly compensate the property owner.

After a government determines it should take private property, a government inspector appraises its value for an offer to the owner. The landowner can accept or reject the offer and appeal the eminent domain request, leading to a broader litigation.

Scalise said he is only in favor of eminent domain on rare occasions but believes the urgent necessity for parking around the government building is sufficient to warrant the measure.

Reid argued the club has been in the area longer than the government center, the latter of which started operating on the adjacent property in 2002. He said he had cooperated with the builders of the new structure, which was completed in 2021. Reid helped the county restructure the club’s parking lot to accommodate stormwater infrastructure.

“I’m blindsided by this, number one,” Reid said. “And number two, our history going back to 1997: We have bent over backwards to work with the city, the county, and ALE and ABC.”

Port City Daily asked Scalise why the authorization took form as a “last-minute resolution,” a framing he pushed back on. 

“We did this on the record,” he said, adding they put out the public notice as soon as possible. “We did this with the media in the room, we immediately released information related to the initiation of the eminent domain process. And, again, we have not filed a lawsuit. We are just beginning the process.”

The county did not want to publicize negotiations with involved parties until they were certain they would not be able to obtain the property voluntarily, according to Scalise.

He reiterated the county remains open to dialogue with the property owner. Reid expressed his desire to cooperate on the issue.

“We have a lot of respect for the county officials,” Reid said. “And all we want to do is work with them and everybody comes out with a successful solution.”

It’s not the first time Reid has worked with government officials regarding a gentleman’s club business. He formerly owned Market Street topless bar Dockside Dolls. According to Secretary of State records, Dockside Dolls was administratively dissolved in 2010; its last annual filing was in 2004.

In 2001, Reid renounced plans to have all-nude performances at Dockside Dolls after conversations with Wilmington council member Charlie Rivenbark and former city attorney Tom Pollard; Reid said at the time he made the decision “as a favor to the city.”

Tips or comments? Email journalist Peter Castagno at peter@localdailymedia.com.

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