ELECTRONICALLY FILED

Pulaski County Circuit Court

Larry Crane, Circuit/County Clerk
2016-Dec-21 13:21:15
60CV-16-7030
C06D17 : 8 Pages
IN THE CIRCUIT COURT OF PULASKI CO TY, ARKANSAS
DIVISION

SKYROOM PLAINTIFF

VS. Case No . - -- - -

DEPARTMENT OF FINANCE AND

ADMfNISTRATION. ALCOHOLIC
BEVERAGE CONTROL DIVISION DEFENDANT

PETITION FOR JUDICIAL REVIEW

Comes now the Plaintiff, SK YROOM, by its attorneys, the Morley Law Firm, PLLC. and for

its Petition for Judicial Review states and alleges:

I. Plaintiff, SKYROOM, is an Arkansas nonprofit corporation with its principal place of

business in Little Rock, Pulaski County, Arkansas. Defendant. DEPARTMENT OF FINANCE

AND ADMlNISTRA TION, ALCOHOLIC BEVERAGE CONTROL DIVISION. hereinafter, ABC.

is an administrative agency of the State of Arkansas with its principal office in Little Rock. Pulaski

County, Arkansas.

2. This Petition for Judicial Review is filed pursuant to the Arkansas Administrative

Procedures Act, A.C.A. 25-\5-20 1, et. ~. and venue is proper in Pulaski County. Further,

jurisdiction is invoked pursuant to ABC Reg. 1.55.

3. On August 17, 2016, the Plai ntiff filed an application for transfer of location of Private

Club Permit #00793 for purpose of transferring said permit from 4726 Asher Avenue, Little Rock,

Pulaski County, Arkansas, to 4634 W. Dixon Road , Little Rock, Pulaski County, Arkansas. The

application was in proper form and accepted by the ABC.

4. On October 14, 2016, the Director of ABC denied the Plaintiffs transfer of location

application. The Plaintiff filed a proper notice appealing the Director's decision and a hearing was
subsequently held before the ABC Board on December 14, 2016.

5. The Plaintiff appeared through its officer and managing agent. Billy Pope, who offered

testimony and exhibits all of which were entered of record at the hearing . Despite offering

Sll bstantial evidence of record through its representati ve, the ABC Board voted to deny the Plainti ff s

application for transfer of location by 3-2 vote. A copy of the ABC Board decision is attached

hereto, marked Exhibit A, and incorporated by reference herein.

6. The findings of the ABC Board are arbitrary, capriciolls and wholly unsupported by

substantial evidence of record as required by A.C .A. 25-15-212 and other appl icable law.

7. The decision of the ABC to deny the Plaintiff's transfer of location was made upon

unlawful procedure and affected by errors of law and evidence in derogation of A.CA. 25-15-212

and other applicable law.

8. The Plaintiff and its members are injured in their person and property by the action of the

ABC in denying a transfer of location , the practical effect of the ABC Board decision is to adversely

effect the Plaintiff and the Plaintiff's members right offree association. Plaintiffis entitled to invoke

jurisdiction pursuant to A.CA. 25-15-20 I et. ~. and ABC Reg. 1.55.

9. Plaintiffhas requested the Defendant, ABC, prepare a transcript of the proceedings before

the ABC Board which will be filed with the Court in accordance with law.

WHEREFORE, Plaintiff, SK VROOM , prays the Court enter its Order reversing the decision

of the Defendant. ABC, dated December 14,2016, as being in violation of Arkansas Administrative

Procedures Act, A.CA. 25-15-20 I et.~. and other applicable law and for all other just and proper

relief to which the Plaintiff may be entitled.

Respectfully submitted,

SKYROOM

lSI Stephen E. Morley

Stephen E. Morley. #79215

MORLEY LAW FIRM
315 N. Broadway
North Little Rock, AR 72 114
Tel: (50 1) 372-4314
Fax: (50 I) 375-3045
 STATE OF ARKANSAS

ALCOHOLIC BEVERAGE CONTROL DIVISION

1515 West 7th Street. Suite 503

Little Rock. Arkansas 72201

Telephooe (501) 682-1105

Fax (501) 682-2221

Bud Roberts BOARD MEMBERS:

Director
Janet Moore. Chairperson
Milton R. Lueken Thomas P. Powell
Attorney Steven Smith
Mary Robin Casteel Jean Hervey
Attorney Chris Palmer

IN THE MATTER OF:

BILLY POPE - SKYROOM
PRIVATE CLUB - TRANSFER OF LOCATION 00693
4634 WEST DIXON ROAD
LITTLE ROCK, ARKANSAS - PULASKI COUNTY

BOARD DECISION

On the 14th day of December, 2016, the Arkansas Alcoholic Beverage Control
Board convened at Little Rock, Arkansas for its regular monthly meeting. In
attendance were Board Members, Janet Moore Chairperson, Thomas P. Powell, Jr.,
Steven Smith, Jean Hervey, and special appointee, Eric Herget.

Alcoholic Beverage Control Director, Bud Roberts was also in attendance.

Billy Pope appeared at the hearing and offered testimony in support of the
application. Mr. Pope was represented by his attorney, Stephen E. Morley.

Agent Kenny Heroman and Agent Princess Danzy of Alcoholic Beverage

Control Enforcement appeared and offered testimony at the hearing.

PROCEDURAL HISTORY

Alcoholic Beverage Control Administration Director, Bud Roberts denied the

transfer of location application for Skyroom on October 19, 2016. A timely notice of
appeal was filed on October 21, 2016.

REVIEW OF EVIDENCE OFFERED

Prior to the receipt of any testimony, Attorney Stephen E. Morley, counsel for
Mr. Pope, offered into evidence the following: An extension of an Option to Lease to
supplement the Option to Lease filed with the application. The document was

EXHIBIT

J F1

received and marked as Exhibit 1. An amendment to the Entertainment Form

provided with the original application. The document was received and marked as
Exhibit 2.

Billy Pope testified he lives in Bryant, Arkansas. His address is within thirty
five (35) miles of the proposed location. Mr. Pope testified he has lived in Bryant for
eighteen (18) years. Mr. Pope testified that if his application is granted, he will
operate this establishment in accordance with the laws of the State of Arkansas, and
he will pay his taxes. Mr. Pope testified he has attended the ABC seminar. Mr. Pope
testified he worked for the prior owners of Visions, Sensations, and Illusions. He
testified he also had dealings with club now known as Paper Moon. Mr. Pope testified
he has years of experience working in bars. Mr. Pope testified he has never personally
been charged with violations for selling to minors or intoxicated patrons. Mr. Pope
testified in his past experiences with private clubs, he always paid his taxes and
maintained a reputation as a responsible permit holder.

Mr. Pope testified there has not been an alcoholic beverage license issued to a
gentleman's club in Pulaski County in many years. He testified people have tried tD
open "byob" establishments. Mr. Pope testified he has never tried to do that, and he
is of the opinion it is better to operate an establishment with law and structure. MI'.
Pope testified based on his experience and age, he understands the gentleman's club
business. He testified he believes there is a demand for it, and people enjoy them if
they are run correctly. Mr. Pope testified having a good management team is
important, and he has put together a good team. He testified there is more to running
a gentleman's club than just having girls around.

Mr. Pope testified he intends to have female dancers in this establishment.

Mr. Pope testified he did not state there would be dancers in his original application,
because he thought putting "gentleman's club" on his application would speak for
itself.

Mr. Pope submitted aerial maps showing the location of the proposed business.
The maps were admitted and marked collectively as Exhibit 3. The property sits at
the corner of Dixon Road and Arch Street. The intersection is controlled by a traffic
light. This is a large tract of land, and Mr. Pope does not intend to use the entire
piece of land for his business. Mr. Pope testified there is a concrete plant across the
road from the proposed location that is open almost twenty four (24) hours per day.
There are three (3) different shifts of workers each day at the plant. Mr. Pope testified
the Little Rock Police training academy is located down the road on Arch Street. A
Pulaski County Sheriffs Department substation is also located nearby on Arch
Street. Mr. Pope submitted a plot plan of the property on which he intends to build
his business. The plan was marked and received as Applicant's Exhibit 4. The
building will sit on two (2) acres; but it will not occupy the entire piece of property.
Mr. Pope submitted a series of architectural drawings depicting a general outline and
construction of the building. The drawings were admitted and marked collectively as
Applicant's Exhibit 5. Mr. Pope also submitted a photo depicting abuilding with a
fac;ade similar to his proposed building. It was admitted and marked as Applicant's
Exhibit 6. The building is to be a metal building with a stone and stucco veneer. Tl:e
building will be 8,500 sq. feet. Mr. Pope submitted a proposed floor plan. The floor
plan was admitted and marked as Applicant's Exhibit 7. Mr. Pope testified the
upstairs portion of the building will be a ''VIP'' area, and it will overlook the
downstairs area. He testified there will not be any individual rooms.

Mr. Pope submitted a proposed food menu to the Board. The menu was
admitted and marked as Applicant's Exhibit 8. He testified he plans on offering food.
He has found that there is often a lunch crowd at these establishments. The food will
be available during operating hours.

Mr. Pope submitted a map of Pulaski County showing the locations of existing
gentleman's clubs. The map was admitted and marked as Applicant's Exhibit 9. Mr.
Pope testified the existing clubs are in older buildings. His location will be new
construction. There will be parking for 150 to 200 cars. He will have extreme lighting
in the parking lot to discourage loitering. Mr. Pope testified he intends to have twelve
(12) employees and one (1) security guard for every thirty (30) people. Mr. Pope
testified his hours of operation will be from 11:00 a.m. until 5:00 a.m., seven (7) days
a week.

Mr. Pope submitted a document entitled, "Skyroom Target Market". The

document was admitted and marked as Applicant's Exhibit 10. The document
contains information about the growth of population in Pulaski County.

ABC Enforcement Agent, Kenny Heroman testified he travels Dixon Road

almost daily. He testified there is a subdivision called England Acres approximately
three hundred (300) yards from this proposed location. Agent Heroman testified he
is concerned about the potential negative impact of this club on the neighborhood.

ABC Enforcement Agent, Princess Danzy testified that upon investigation of

the outlet, she went to the Phillips 66 store across the street from the proposed
location as part of her routine effort to notify area residents and business of a new
application in the area. The employee at the Phillips 66 told Agent Danzy that there
were people in the area who were opposed to this club. Agent Danzy testified the
employee asked her if she could leave something with her, so she left a piece of paper
with her name and phone number on it. Agent Danzy testified that the employee
called her and asked her to pick up the piece of paper. When she went to pick it up,
there were signatures on the page she left with the store, as well as, additional pages
with signatures. Agent Danzy testified she received two phone calls from individual
who were opposed to the private club. She testified they were opposed to the traffic
the club would bring, as well as, the type of crowd it would bring to their
neighborhood. Agent Danzy testified she did not believe those individuals realized
the proposed outlet was a club that would feature female dancers. Agent Danzy also
testified that she met with a lieutenant from the Pulaski County Sheriffs
Department. He assisted her in confirming that this proposed location is in a dry
area of Pulaski County.

FINDINGS OF FACT

After a review of the evidence on file with the Alcoholic Beverage Control
Administration and the testimony offered, the Board finds as follows:

A review of Mr. Pope's application reveals that he failed to disclose dancing or

dancers on the "Description of Business and Entertainment Activities" form required
by of all private club applicants when seeking a transfer of location. The form
specifically states as follows: "On this sheet of paper, which is a part of your verified
application, you are to describe, in complete detail, what entertainment (live bands,
dancers, food service, etc.), social functions, or other recreational events will be
available at the club for the members. If you are in doubt about whether to list an
item, you are urged to include it." Mr. Pope listed the following on his Entertainment
Form: "To promote community hospitality between members and guests, club will
offer pool tables, televisions - sports viewing, light food service, live band-karaoke in
a gentleman's club atmosphere." Although the form prompted him to include
"dancers", he failed to do so. Mr. Pope testified that he has worked in at least four (4)
establishments that feature female dancers. Mr. Pope testified that he did not
include dancing in his original application, because he thought everyone would
understand that's what he meant by using the term, "gentleman's club."

ABC Agent Heroman testified he is concerned about the potential impact of

this club on the residential neighborhood approximately three hundred (300) yards
from the proposed location. ABC Agent Danzy testified that she received signatures
from area residents in opposition to the club. She testified she did not believe the
residents were aware of the fact that it would be a club featuring female dancers.
Agent Danzy testified she received two (2) phone calls from area residents it::
opposition to the club. They expressed concerns about traffic problems as a result of
the club.

CONCLUSIONS OF LAW

Based upon all the testimony and evidence discussed in the Findings of Fact
above, the Board concludes that Billy Pope is not a qualified applicant to operate a
private club at the proposed location and the transfer of this club is not in the public
interest as required by Ark. Code Ann. 3-9-222(f). Mr. Pope failed to disclose on his
original entertainment form that there would be female dancers performing in the
club. The Board does not find Mr. Pope's explanation that everyone knows
gentleman's clubs have female dancers to be credible 01' accurate. "Gentleman's Club"
is not defined in ABC Rules and Regulations, and it may mean different things to
different individuals based upon their experiences. The entertainment form
completed by Mr. Pope specifically refers to Arkansas Alcoholic Beverage Control
Rule 1.34, which states as follows: "Any permit issued by the Alcoholic Beverage
Control Division shall remain valid only for use in the business described in the
original application .... The maintenance of such business operations shall be deemed
a condition of the permittee's right to ret.ain any permit." As Mr. Pope disclosed in .s
testimony, female dancers are the main focus of clubs he calls "gentleman's clubs' ;
how ever, he failed to disclose t.hat fact anywhere on his application. By his omission
on the e ntertainment form, he was already jeopardizing 1 i right to opera te the cl ub
before it even opened for business. The Arkansas Supreme Court has said that the
burden of proof lies with the applicant to show that he is qualified to hold a perm it
and that the permit is in the public interest. See Arlwnsas ABC Bd. V. King, 275 Arh.
308, 629 S. W2d 288 (1982). The Board finds Mr. Pope concealed a material purpose
for the operation of this proposed club; therefore, he has failed to meet his burden to
show he is a qualified applicant. As authorized by ABC Rule and Regulation l.21,
the Board also considers the testimony of ABC Agent Danzy regarding the opposition
to the club expressed by area residents and Agent Heroman's testimony regarding
his concerns about the club's negative impact on a nearby neighborhood. The Board
notes that Agent Danzy did not believe the individuals she communicated with
understood the club's intent to feature female dancers. Due to Mr. Pope's
concealment of the club's intent on the entertainment form, it is impossible for the
Board to accurately ga uge the opinions of area residents, public officials, and local
law enforcement officers, beea use they were not apprised of the true intent ofthe club
during the comment period afforded to them by law.

WHEREFORE, by motion made, seconded, a nd passed by a vote of 4-1, th2

application of Billy Pope ofSkYl'oom, for the transfer oflocation of private club permit
number 00693 is hereby DENIED.

DONE AT LITTLE ROCK, ARKANSAS, this 14th day of December, 2016.

ALCOHOLIC BEVERAGE CONTROL BOARD

GGJl?'YLu~
J ET MOORE, CRt\IRPERSON