Fighting for its liquor license, Anchorage strip club loses round in court

An Anchorage strip club has lost a round in its legal battle to get its liquor license back.

Superior Court Judge Dani R. Crosby has denied a request for a restraining order by Fantasies on Fifth LLC against the Alcohol and Marijuana Control Office.

The judge said the strip club has not exhausted its administrative remedies to get the license back.

“The matter is not ripe for this court’s review,” wrote Crosby.

If the club wants to appeal the Alcohol and Marijuana Control Office’s July 20 decision not to renew the license, it must go before the Office of Administrative Hearings, according to the judge.

Brian Stibitz, an attorney representing Fantasies, could not be reached on Tuesday. In his request for a restraining order, Stibitz argued that Fantasies’ right to due process was violated when the liquor board chose not to renew the club's license.

“The damage is immediate, and irreparable. Fantasies has been ordered to cease its business operations effective immediately. Fantasies has roughly 15 employees, and 10 – 12 dancers, who are out of jobs effectively immediately,” Stibitz wrote.

But the judge said the liquor board provided the club with adequate notice and opportunity to defend its license. Hearings were held on February 10, April 26 and July 20.

The board acted within its statutory authority, the judge wrote.

The strip club is the subject of an ongoing Department of Labor and Workforce Development investigation. According to a May 10 letter from a department investigator to Stibitz, Fantasies owes about $500,000 in unpaid wages to its employees.

The building that houses Fantasies and the lot it sits on at 1911 East 5th Avenue are listed for sale at $1.8 million. The liquor license and the furniture, fixtures and equipment are also listed for $500,000.

An Anchorage strip club has lost its liquor license over complaints it hasn’t paid its workers and owes them at least $500,000, but the club is fighting back, asking a Superior Court judge to impose a restraining order.

The Alcohol & Marijuana Control Office voted unanimously at its July 20 meet to strip Fantasies on 5th of its liquor license over protests by the municipality of Anchorage and objections from the Alaska Department of Labor and Workforce Development over the way the club treats its workforce.

A bright green sign hung on the main entrance to Fantasies on Monday afternoon that said the liquor license was revoked. No one answered the door of the multi-story club located across the street from Merrill Field airport on Anchorage’s east side.

The Alaska Department of Labor’s Wage and Hour Division has been investigating complaints from Fantasies on 5th workers who say they have been shortchanged on pay for years. The division determined that labor violations were committed at Fantasies and that the club owes at least half a million dollars, according to a May 10 letter sent to the club’s owners.

The club owners -- listed as Travis Gravelle, Eugene Greaves, and Claudine Chapson -- could not be reached on Monday. Brian Stibitz, an Anchorage attorney who represents Fantasies, said by email that he had no comment “at this juncture.”

According to online court records, Stibitz has filed a motion asking Superior Judge Dani Crobsy to impose a restraining order against the Alcohol & Marijuana board’s decision to revoke the liquor license. A hearing is scheduled for August 1.

According to the May letter to the club from state investigator Donna Nass, “nothing under Alaska law exempts dancers, DJs, and janitorial and cleaning staff from the Alaska Wage and Hour Act, and more specifically, the Alaska Supreme and District Courts have established that dancers are employees entitled to minimum wage and overtime.”

Fantasies not only doesn’t pay its dancers but requires them to “kick back a portion of their tips” to the club as rent, according to Nass’ letter.

Yana Tatarinova, a former dancer at Fantasies, estimates that she’s owed about $100,000 in lost wages, overtime and the money she had to pay the club to dance there. Tatarinova said she danced at Fantasies from July 2006 to November 2015. On slow nights, she would have to pay a $45 “house fee” to perform. On busy nights, like Friday or Saturday, she would pay $100 to work, Tatarinova said.

Tatarinova testified about the working conditions at Fantasies at the July 20 board meeting. She testified that employees were not allowed to contact 911 when “things were going wrong at the establishment because the licensee was afraid of losing the liquor license,” according to minutes from the meeting.

Besides not paying its dancers, the strip club also kept shoddy paperwork, according to Wage and Hour. Fantasies “either does not maintain or destroys certain records relating to the hiring and employment of workers,” according to Nass’ letter.

In her testimony before the Alcohol and Marijuana Control Office, Nass said Fantasies interfered with the state’s audit of the club’s records by not providing them and having their attorney write a letter saying that the Department of Labor could not interview any employees, something that is allowed under state law.

Nass said about 40 workers are due back wages.

Joe Dunham, head of Wage and Hour, declined to say what next steps might be if Fantasies refuses to pay. But he noted that a criminal court case is always an option.

Kathy Hartman launched Fantasies in 1998.

Hartman was a defendant in a 2012 federal court case that ordered the club to pay back wages to a dancer, recognizing that dancers were employees entitled to minimum wage and overtime.