City loses bid to shut XTC strip club.
XTC Cabaret hails judge’s decision; fight likely not over
A judge refused to grant the city of San Antonio a temporary restraining order to shut down the North Side exotic dance club XTC Cabaret for operating without a certificate of occupancy.
State District Judge Laura Salinas gave no reason for her ruling this week.
Eric S. Langan, chairman, CEO and president of Houston’s RCI Hospitality Holdings Inc., XTC’S parent company, said a TRO would have caused “irreparable harm” to the club and its employees.
“We try to be a good corporate citizen,” Langan said Tuesday. “We don’t want to cause this issue. But at the same time, we have to stand up for our rights and our rights to operate our business.”
The city is not giving up on its efforts to stop the club from keeping its doors open without a certificate of occupancy.
The city may still pursue a temporary injunction against XTC, which had its certificate of occupancy revoked Nov. 24 by the city’s Development Services Department over alleged health violations during the pandemic and criminal activity.
XTC reopened its doors Feb. 25 without the certificate of occupancy. The city then cut off power and water to the business, but Langan said XTC got around that by bringing in a generator and an “external water supply source.”
The city has been issuing citations against the club each day it’s been operating without the certificate and for failing to comply with orders to vacate the property at 2023 Sable Lane. The former carries a fine of up to $500 a day,
while the fine for the latter is up to $2,000 a day.
“All we’re asking from the court is that XTC be ordered to follow the law,” Assistant City Attorney Savita Rai said Tuesday after the judge’s ruling. “The law is you have to have a certificate of occupancy to operate. They do not have one. Thus, they should not be operating.
“We’re looking at our options moving forward,” she added.
Salinas’ ruling shows the city has no grounds for shutting down XTC, Langan said.
“Since they have no legal remedy to physically close our business, they have decided they are just going to do it by taking away our electricity, by taking away our water,” he said. “I’m surprised they haven’t come and jacked up the street in front of the business. I’m not putting it past them. I better not give them any ideas.”
Langan said XTC “most certainly” will be pursuing financial damages against the city for the time the business was shut down, but added he’s not looking to “punish the citizens of San Antonio.”
At a hearing Monday, XTC lawyer Benjamin Allen told Salinas the revocation of the certificate of occupancy was “invalid from the getgo.”
“To shut this business down would put everyone who is employed there out of work,” Allen said. “If their arguments are true, they’ll be able to prevail on their arguments eventually. Two weeks from now there’s going to be a temporary injunction hearing that could shut the business down based on evidence.”
The club has about 35 employees and about 50 dancers, who are independent contractors, Langan said.
Assistant City Attorney Samuel Adams described XTC Cabaret as “scofflaws.”
“It is a direct assault on our powers, our police laws, to enforce law and order in the city of San Antonio,” Adams told the judge.
XTC and the city have swapped five lawsuits since December.
The city has cited rulings in its favor from judges in state District Court, the 4th Court of Appeals and U.S. District Court.
XTC said only one judge — state District Judge Mary Lou Alvarez — decided the merits of whether the city had the legal authority to revoke the certificate of occupancy.
Notes from a Dec. 18 hearing in which Alvarez heard testimony from both sides reflect that she ruled the city should reinstate XTC’S certificate of occupancy.
The judge’s ruling, however, doesn’t appear to have been memorialized in a written order. It’s not clear why there was no order. Based on those notes, XTC reopened Feb. 25 even though the city never restored the certificate of occupancy.
The city’s attorneys have argued the judge’s notes were not an order, so XTC can’t use them as the basis for reopening.
Alvarez also did not have jurisdiction to hear the case, Rai said, because XTC had not first taken up the issue of the revocation with the city’s Board of Adjustment before seeking relief in court.
The board eventually took up the matter in January but refused to grant XTC’S appeal of the revocation by an 8 to 3 vote. XTC called that an “abuse of discretion” in a subsequent lawsuit against the board.
XTC asked for its own temporary restraining order directing the board to restore the certificate of occupancy. State District Judge Norma Gonzales denied the request March 9.