Strip clubs could have a home in the mountain gambling town of Central City, at least in the industrial areas.

The city council in the town about 38 miles west of Denver gave preliminary approval last Tuesday to an ordinance that would restrict adult-oriented businesses to industrial areas. The measure would amend the current ordinance that bars the businesses from being within 1,000 feet of similar businesses, homes, schools, public parks and other places.

The action follows a federal lawsuit filed against the city by RCI Holdings, whose businesses in the Denver area include the Diamond Cabaret strip club. The company, which owns nightclubs and sports bars across the country, said in a lawsuit filed Aug. 7 in U.S. District Court in Denver that the 1,000-foot restriction effectively bans sexually oriented businesses in Central City.

Council members will hold a public hearing Sept. 3 on the updated restriction and consider final approval of the ordinance. They’ll also consider putting the matter of allowing sexually oriented businesses in Central City to a public vote.

Asked how much of Central City is zoned industrial, Todd Williams, a council member, said “not much.”

RCI Holdings paid the city $2.4 million in 2022 for a building on Main Street. At the time, city officials said the company didn’t plan to open a strip club among the casinos.

But RCI Holdings claims in its lawsuit that the city approved the sale knowing that an affiliated company “would operate the premises as an adult-oriented nightclub.”

In July, a city board rejected a permit for RCI Dining Services, a subsidiary of RCI Holdings, because the building is within 1,000 feet of homes. The council rejected the company’s appeal. RCI Holdings then sued, contending that denial of the permit violates its constitutional rights of free speech and due process of law.

The city planning commission in 2022 recommended approving two ordinances that would modify the restrictions on the location of adult-entertainment businesses to make more sites in Central City eligible for their operation. City staffers also recommended adopting the changes, saying that the U.S. Supreme Court has upheld limited First Amendment protections for strip clubs and a total ban on them is unconstitutional.

Colorado voters in 1991 legalized gambling in Central City and two other historic mining towns: Black Hawk and Cripple Creek.

Originally Published: August 26, 2024 at 2:05 p.m.