By Anna Pulley
By Erin Sherbert
By Chris Roberts
By Erin Sherbert
By Rachel Swan
By Joe Eskenazi
By Erin Sherbert
By Erin Sherbert
On Dec. 22, 2008, Deputy City Attorney Jerry Threet sent a sternly worded letter to one of the owners of a strip club at 220 Jones Street in the Tenderloin. Operating under various names — first Club Vixen, then Pink Diamonds — the club had racked up a record of safety and permit violations over the past two years. It had done so in defiance of the San Francisco Entertainment Commission, the seven-member board of political appointees tasked with regulating local nightclubs.
Overcrowding, fights, and gunplay had already led the city attorney's office to write no fewer than five letters to the same individual, warning that the club was endangering its neighbors and customers, and could soon be subject to a lawsuit and injunction governing its operations. Police had investigated at least four shootings linked to Pink Diamonds in 2007 and 2008, and had repeatedly asserted that it was operating illegally without required Entertainment Commission permits.
The recipient of these letters, oddly enough, was Entertainment Commissioner Terrance Alan.
The correspondence, provided by the city attorney's office in response to a public-records request from SF Weekly, reveals that Threet's patience with Alan at the end of last year was wearing thin. As owner of the property in which Pink Diamonds did business, Alan was ultimately responsible for his tenant's behavior. Yet Threet complained in a November 2008 e-mail to the entertainment commissioner that ongoing issues at the club "call into question whether the City can rely on your simple assurances in achieving code compliance."
The Dec. 22 letter marked a new stage in the Pink Diamonds controversy. Threet wrote that one of the strip club's other owners and its manager had recently informed him that Alan's ties to the venue were closer than the city attorney's office had believed. Pink Diamonds, it turned out, was not just paying rent to Alan for the use of his building. In addition to being the club's landlord, he was also its co-owner.
Threet requested that Alan immediately provide documents outlining the exact nature of his relationship with Pink Diamonds, threatening to seek such documents through litigation if he did not comply. Threet also voiced concern that the club, after voluntarily shutting its doors in November to address code violations and security problems, was preparing to reopen, setting the stage for yet more violence.
The club did reopen, and last January, the city attorney's office filed a lawsuit against Pink Diamonds for being a public nuisance. Alan, who had cooperated with Threet's request for lease and ownership records, was not named in the suit, although his co-owners were. That spared the commissioner no small degree of embarrassment, since the public agency he oversees was officially responsible for handling misbehaving nightclubs.
Where had the Entertainment Commission been? Despite all its problems, Pink Diamonds had never been called in for a disciplinary hearing. Bob Davis, the commission's executive director, says he had met with one of the club's operators (not Alan), but was powerless to do more than inform him of the rules. "We don't have any ability to do anything to them, because we can't issue a citation, and if they don't have a permit, we can't suspend it," Davis says.
It wasn't the first time that the Entertainment Commission had been ineffectual in taking on violent clubs on its own — or the first time the agency had found itself confronted by a potentially daunting conflict of interest.
The lax regulatory climate in which Pink Diamonds and other clubs have flouted the law is the subject of an increasing number of complaints from San Francisco's police officers, neighborhood activists, and politicians. More and more, these groups are laying the blame for an unchecked wave of club violence with the Entertainment Commission, which in the six years since it was established has never revoked a nightclub's operating permit, and has temporarily suspended permits just four times. (Davis says more than 400 venues hold either entertainment or late-night operation permits issued by the commission.)
Critics say the commission's mandate to crack down on misbehaving clubs is subverted by its other founding mission: promoting San Francisco's nightlife. And some question whether the commissioners are up to the task of regulation in the first place. The commission officially has two seats for nightlife industry representatives. In fact, five of the seven commissioners have direct financial ties to the entertainment industry. "It is an ethical minefield," says Jim Meko, one of two commissioners without such ties.
The L'Amour Night Club is marked by a yellow awning decorated with a martini glass at the corner of Jackson and Kearny streets, about a block from where Columbus Avenue climbs uphill from the Financial District toward North Beach. Squeezed between Thai and Chinese restaurants, L'Amour's unprepossessing entrance leads to a cavernous underground dancehall and karaoke bar dotted with large sofas. Last December, San Francisco police officers made a visit to the nightclub, which had begun hosting DJs who routinely drew hundreds of customers, leading to noise complaints.
According to police records, the inspection revealed an establishment operating at the edges of the law. The club's state permit to serve alcohol had expired nearly six months earlier. Those who identified themselves as promoters and security guards at the venue could not produce business cards or other credentials. A subsequent inspection in January revealed that the underground bar had no clearly marked emergency exits or sign stating its maximum occupancy.
These were not mere technicalities. The officers of the SFPD Central Station are well acquainted with how small mistakes — inadequate security, overcrowding, hiring the wrong promoter — can create big problems. North Beach is synonymous with this city's nightlife, and a number of its teeming nightclubs are now associated with violent crime.
Police records culled from July and August 2008 give the flavor of this neighborhood after hours. A young man was stabbed in the back while fighting outside Impala on Broadway; a club security guard was accused of assaulting a bystander with brass knuckles and pepper spray during a brawl linked to Suede, the Bay Street venue; and police reported hearing automatic-rifle fire during a gun battle on Francisco.
To forestall similar problems at L'Amour, police Sergeant Edward Anzore took the station's complaints to the Entertainment Commission. At a public meeting on Jan. 20, commissioners learned that L'Amour had been holding large hip-hop parties without a required permit. Davis confirmed that the club lacked a permit and said that it was "on the radar," according to meeting minutes. Audrey Joseph, a former nightclub owner who chairs the commission, assured Anzore that staff would investigate.
They did not. In a recent interview, Davis confirmed that there was no follow-up from his staff on the January police reports. Soon enough, however, L'Amour became impossible to ignore. In February, as a party was letting out close to 1:30 a.m., a 17-year-old San Francisco man shot a 21-year-old Oakland man in the stomach outside the club.
The gunshot victim survived. For a while, the future of L'Amour seemed less certain. Its numerous code violations, combined with the shooting, led police to redouble their calls for action from the Entertainment Commission, which has the sole authority to suspend or revoke entertainment licenses.
A March inspection by the commission's field officer revealed that L'Amour was still violating safety regulations. Nobody was checking patrons' ID at the door, and no security guards were seen on the premises. A handwritten occupancy sign reading "49" had been affixed to the wall — a convenient number, since city law dictates that any clubs holding more than 49 people are required to employ security staff. (By contrast, police had reported seeing hundreds of patrons there during their December inspection.)
Today, despite these problems, L'Amour is still open. Davis says the club has fixed its fire-code violations and is now considered in compliance with the law. (Trish Pham, the club's manager, did not return calls for comment.) But Captain James Dudley, the Central Station commander, says the progression of incidents at the club over the winter speaks volumes about the commission's lack of zeal in its regulatory duties.
"We provided the Entertainment Commission with warnings," he says. "If, after that first memo, somebody from the Entertainment Commission walked in and said 'Let me see your permit,' they could provide none. Right then, you'd say, 'Okay. Your permit is suspended pending your clearing up these fire-code violations, pending your public-assembly number, pending a security plan, pending an updated business plan.' That wasn't done. Next thing you know, there's a shooting."
Entertainment Commission staffers are the first to acknowledge that their enforcement process is slow-moving, though they say it's not for lack of trying. "It's just like any legal or court case," field officer Vajra Granelli says. "It takes a lot of due diligence. I think it's really important that this system exists."
Granelli, the commission's eyes and ears throughout the city, has no power to cite clubs for infractions of their permit conditions. He's also the sole field investigator employed by the agency to oversee the city's hundreds of clubs. "I could do the same amount of hours I do now and do just South of Market," he says.
The commission's most prominent temporary permit-suspension hearing, held for Kelly's Mission Rock in 2005, required months of preparation, including more than 300 hours of work from the city attorney's office. Today, Davis says, he can no longer afford lawyers from the city attorney — who bill departments for their time — because of budgetary issues, drastically curtailing his ability to effectively pursue serious disciplinary action.
"We are a bureaucracy," Davis says. "I have no enforcement officers. I have nobody who can cite anybody."
Indeed, when it comes to hard-line application of the law, the Entertainment Commission's way of doing business often appears dysfunctional by design. The bizarre division of labor in the enforcement process between police officers with no say in permit suspension and a civilian commission with no legal expertise — originally conceived as a system of checks and balances — in practice means that most complaints languish.
A much more common approach to problem venues, Davis says, is negotiation — cajoling them into line through meetings and talks, rather than formal disciplinary actions. This soft approach is combined with a permissive licensing process that grants the benefit of the doubt, even to inexperienced club owners. In 2005, Alan boasted to the San Francisco Business Times that the commission had handed out more permits in its first full year of operation than the police had in the previous eight years.
Commissioners argue this stance is necessary because assembly and entertainment (construed as free speech) are constitutionally protected rights under the First Amendment. By contrast, Tom Ferriole, director of Citizens United for Neighborhood Planning, a Union Square residents' association, opines that the Entertainment Commission is "doing its job. It's rubber-stamping entertainment permits, which is exactly what it was set up to do."
Captain Daniel McDonagh of the SFPD Southern Station, which also handles a heavy load of nightclub-related complaints, says that when a club erupts in gunfire on Friday night and plans to open again on Saturday, swifter action is called for than the current system allows.
"If there's a problem at a nightclub tonight, we can't say, 'We have to shut you down until you get your house in order,'" he says. "We have to go to the Entertainment Commission, ask them to shut it down, and they may or may not do it. It has to be a system where the police department can step in and say, 'We've got to shut you down until you are back on board.'"
Such a system once existed. Until the 1990s, authority for granting, suspending, and revoking nightclub permits rested with those confronting brawling patrons on the front lines: San Francisco's police officers. But demographic shifts within the city about 15 years ago began setting the stage for a change to the status quo.
An influx of well-to-do condo owners in SOMA — then the major hub of the city's dance clubs, particularly gay ones — brought increasing pressure on the district's police captains to crack down on warehouse parties and raucous venues, some of which were bringing in thousands of people several nights a week. At the same time, rave culture was hitting its peak, and techies with a penchant for dancing the night away and money to spend threw their support behind a new political action committee, the San Francisco Late Night Coalition, created to advance their interests in the so-called Club Wars.
Founded by promoters, DJs, and clubgoers frustrated with what they saw as the heavy-handedness of the police department's approach to regulating nightclubs, the coalition depended on club owners and others with links to the entertainment industry to fill its coffers. It has contributed $49,000 to various local political races between 2000 and 2008. Alan is its current chairman. The committee's greatest success, by far, has been the establishment of the San Francisco Entertainment Commission.
"Friends of mine were throwing events in warehouses," coalition political director John Wood recalls. "Sometimes those events would get shut down for lack of permits." A concurrent police crackdown on a few large gay clubs in SOMA led to a crusade among promoters, DJs, and clubgoers for a reformed permitting process that would favor club owners and warehouse partiers — an independent political body that, in Wood's words, "would babysit the industry" and shield it from the police department.
That crusade got a boost in 2000, when a civil grand jury report concluded that the existing system of police permitting was unfair. The grand jury recommended that permitting authority be turned over to a panel of department heads representing various city agencies, such as the police, fire, public health, public works, and planning departments. The idea of an impartial committee of city employees was scrapped, however, under lobbying from the Late Night Coalition, which sought a commission of political appointees that would include nightclub-industry representatives. It had the ear of then-Supervisor Mark Leno, a club enthusiast who has been a frequent recipient of coalition campaign contributions.
It was Leno who crafted the legislation that created the Entertainment Commission, an unprecedented governmental agency that would promote and expand nightlife — and also regulate it. It was granted the sole power to issue, suspend, and revoke permits to operate after 2 a.m. and host live-music acts, including DJs. The threat of withdrawing these permits had traditionally been the biggest stick police had for forcing intractable club owners into line.
"We were thinking, 'Who are the voices that need to be heard?'" Leno, now a state senator, recalled in an interview. He said the commission's variety of stakeholder representatives — two from the entertainment industry, two from the neighborhoods, and one each from law enforcement, public health, and urban planning — prevented the nightclub industry hijacking the permitting board to advance its own interests. "If you had all club promoters, or all club owners, the answer to your question would be yes," he said, when asked whether such a danger existed. "But they're just two of seven, so we think it's a good balance."
Today, that balance has tipped decisively. In addition to the commission's two industry representatives, three of the five remaining commissioners have industry ties. Justin Roja, the urban planning representative, co-owns the nightclub 330 Ritch. Erik Joseph Pred, the public-health representative, is an emergency-medical-services contractor for entertainment events, including Burning Man. Nikki Calma, who was recently appointed by Mayor Gavin Newsom as a neighborhood representative on the commission, is a hostess and musical director at the SOMA club AsiaSF.
The two industry representatives have ties to many sectors of San Francisco nightlife. Audrey Joseph is a producer and former owner of the renowned Club Universe, who now works as a consultant for club owners and event organizers. Terrance Alan, in addition to his financial interests in Pink Diamonds and chairmanship of the Late Night Coalition, has done consulting work for BSC Management, which runs multiple San Francisco clubs. He also has a pornography company, New Meat, that sells videos of sexual encounters between amateur male actors — a gay version, if you will, of Girls Gone Wild.
Meko and retired police captain John Newlin are the sole commissioners who don't make their living from the entertainment business. "I sometimes find myself feeling very lonely up there," Meko says. "Given the way the appointments work, it seems like everyone else up there has a stake in a nightclub."
The full extent of commissioners' ties to the industry they regulate is difficult to assess, in part because no one keeps track. "We don't check, quite frankly," Davis says of commissioners' relationships with permit applicants who appear before them. "The onus is on them to recuse themselves." Both Joseph and Alan help put on street fairs that must obtain loudspeaker permits from the commission; Davis says these permits are typically approved at the staff level, without going up for a vote.
Davis says that 330 Ritch, the SOMA nightclub co-owned by Roja, has never been before the commission for disciplinary hearings since Roja assumed his seat in February 2008. That's not for a lack of police complaints about the venue, of which 10 were filed since last August. The majority concern noise and raucous crowds when the club lets out, and were clustered at the end of last summer. Davis says commission staff members have twice had meetings with other owners of 330 Ritch — without Roja present — during that time.
Roja, a former neighborhood liaison in the Newsom administration, says he doesn't let his dual roles as club owner and club regulator come into conflict. "My background is in the mayor's office," he says. "I'm very impartial in terms of public agencies that we work with, just because I've worked alongside so many different city departments through the years."
Local conflict-of-interest laws don't merely require recusals on certain permit votes. Public officials are also barred from using their office to undue advantage in private business ventures. For example, Entertainment Commission bylaws forbid commissioners from working as consultants on the permitting process for nightclubs.
The Web site of Joseph's entertainment consulting company advertises "complete consultation on administrative systems and licensing needs." However, she says her consulting services do not extend to permitting, and acknowledges that such activities would be illegal.
"I'm an industry representative. I represent a constituency. And I'm allowed to keep working at my trade," Joseph says, asserting that she personally has steered clear of any conflicts. She continues, "Do other commissioners on my commission have conflicts of interest? That remains for the Ethics Commission to decide."
The record shows that Alan, the other official industry representative, has voted on projects before the commission in which he was personally involved. Last year, he voted to approve permits for the Paradise Lounge at Folsom and 11th streets, a venue where he says he had done volunteer consulting work. (He maintained the vote was proper because he had not been paid.) Last September, the commission voted to sponsor the Get Connected Summit, a technology and entertainment conference he co-founded.
Alan's decision not to recuse himself on that vote led North Beach resident Frank Therre, who has been frustrated at the commission's hands-off approach to watchdogging his neighborhood's nightclubs, to file a complaint with the San Francisco Ethics Commission. In May, after seven months, Therre received a brief letter from ethics officials informing him that his complaint had been dismissed. Alan and Davis said that the Entertainment Commission provided no financial support to the conference, and that "sponsorship" of the event was just a token expression of support.
In managing potential conflicts of interest, Alan says, "I would always err on the side of caution. Why? Because if I fuck up, it's going to look bad for the commission. I'm a volunteer, dude. I spent 10 years of my life volunteering. I don't want to torpedo that. When people accuse me of knowingly participating in decisions where I personally will benefit, I know that they don't know me."
When asked about Pink Diamonds, Alan — sticking to previous public statements, which have been repeated in press reports on the club's troubles — initially told SF Weekly he merely owns the building where the club operates.
When questioned about assertions to the contrary from the city attorney's office, as well as city income-disclosure forms and state business records identifying him as an investor in Club Paree — the partnership that holds the lease on the club space — he said he had accepted a "nonvoting, nonmanaging stake of 20 percent" in the management company in lieu of a security deposit.
When asked about the club's need for permits from the commission he sits on, Alan demurred. "I would imagine that if those requirements are being made on my tenant, it's between my tenant and the city attorney's office," he said. "I have nothing to do with it. I have had to hire an attorney, unfortunately, because of this, and so I have nothing to say to anybody about it. So you're going to have to talk to my attorney."
John St. Croix is executive director of the San Francisco Ethics Commission, which oversees public officials' potential conflicts of interest. He declined to discuss specific complaints filed with his office about the Entertainment Commission. Speaking generally, he said the city's conflict-of-interest laws turn on the narrow question of financial gain. "The essence of the law is you cannot vote for or against something that's going to have the potential to enrich you personally and specifically," St. Croix says.
According to UC Berkeley political science professor Bruce Cain, that's setting the bar too low. There are good reasons the web of personal and professional ties between a commission stacked with industry insiders and the nightclubs they're supposed to oversee defies common sense, Cain says.
"Right from the start, the idea of putting promotion and regulation together is a bad idea," he says. "You can imagine having these nightclub owners on a commission that promotes nightlife. But it's clearly problematic, and raises lots of conflicts of interest if you allow them to regulate those establishments. And it's not just a conflict of interest if it affects your particular establishment, but if you have any kind of financial connection as the lease holder, or your brother does, or your family does, or your friends do."
Cain says San Francisco's Entertainment Commission offers a textbook case of what government-ethics experts call "regulatory capture." "The people who are supposed to be regulated take over the regulating body," he explains. "Partly it's because they're the ones who care the most about it, and everybody else tends not to. But it clearly produces a skew in the policy, because the people have a vested interest."
The knotty issue of commissioners' real or perceived conflicts of interest, acknowledged privately by many city officials, has stirred little in the way of concrete action or stricter ethics rules. The question of lax enforcement of club regulations is another matter. In January 2008, faced with a rising epidemic of nightclub violence, the Mayor's Office of Criminal Justice held a Nightlife Safety Summit. Newsom and Police Chief Heather Fong then announced a new legislative initiative to bring bad clubs to heel.
"People are going to these nightclubs, carrying guns, and committing violent crimes," Newsom, himself a former nightclub owner, said at the time. "This violence will not be allowed to continue, and we are telling nightclub industry officials that we are here to help you, but we are going to make some changes."
Out of that pronouncement came a proposed revision to the San Francisco Police Code. The most significant changes would enable Entertainment Commission staff to issue citations for permit violations just as police officers do, and — more importantly — would give the commission's executive director the power to temporarily suspend a nightclub's permit for up to three days with only eight hours' notice. These measures would address police concerns about the lack of a rapid-response mechanism when club violence gets out of hand.
Nevertheless, the new bill has become mired in controversy. Police and neighborhood activists, acting on their long-simmering frustration with the Entertainment Commission, have successfully lobbied David Chiu, the freshman president of the Board of Supervisors, for some dramatic changes to the bill.
In May, Chiu proposed amendments, including a cap on the number of extended-hours permits that can be issued in a given year. (About 100 businesses in San Francisco currently hold such permits, many of them late-night restaurants.) He also introduced oversight measures designed to increase the Entertainment Commission's public accountability, such as regular reporting on follow-up to police and resident complaints. Additionally, the city's police chief would be authorized to initiate a suspension hearing before the commission if the agency's employees don't respond to requests for such a hearing.
These measures have provoked staunch resistance from the commission and industry interests, and the bill is now stalled in the Board of Supervisors' City and Neighborhood Services Committee. Kevin Ryan, the former judge and U.S. attorney who now heads the Mayor's Office of Criminal Justice, backs the Entertainment Commission's preferred version of the legislation.
Chiu's critics say his amendments have thrown a wrench into legislation that was fine-tuned over a year and a half to balance the needs of nightclubs and law enforcement.
"He's a brand-new supervisor to a large district," Joseph says. "I think he's got a little too much on his plate, and he's not thinking clearly."
Chiu says such arguments exaggerate how comfortable city officials — particularly within the police department — were with the legislation. "There have been longstanding complaints from both the police department and neighbors around the city that complaints they file with the Entertainment Commission have not been followed up on," he says. "The Entertainment Commission does have these dual, contradictory missions of both promoting the industry and regulating the industry. And I think that many of the challenges in this area have probably been a function of those contradictions."
City officials outside the commission continue to count Pink Diamonds among the worst of those challenges. After the club's most recent outbreak of violence on June 27, City Attorney Dennis Herrera vowed to close its doors for good. "The neighborhood is clamoring for some solution, and they deserve it," he said. "And I'm going to do everything in my power to shut this place down. Enough is enough."
The incident in question took place at about 3 a.m. on a Saturday — an hour at which Pink Diamonds is not legally allowed to operate, since it lacks an extended-hours permit. Harris Fulbright, a 30-year-old from San Francisco, was shot to death outside the strip club after fighting with another customer waiting in line. Later that day, the crime scene had been cleared, and a reporter who knocked on the door was greeted by a janitor. He said the owners and management team were absent, but confirmed that Pink Diamonds would be open for business again that night.