Since 2013, Horry County spent more than $200K regulating adult entertainment

When Horry County sued Badd Kitty this month, the case marked the first time county officials had gone to court to enforce the adult entertainment regulations they overhauled in 2013.

But the county had been paying for those policies since before they were even adopted. Three years ago, they hired a Tennessee attorney to help them update their ordinances, with the understanding that he would also defend the regulations in court.

So far, the county has paid more than $200,000 to the law firm of Scott Bergthold, a nationally-known attorney who specializes in helping local governments create restrictions for sexually oriented businesses such as strip clubs and adult bookstores.

Bergthold, who has co-written hundreds of ordinances in more than two dozen states, helped craft the county’s policies. He also defended the county’s rules against a federal lawsuit filed by a former strip club owner and now he’s representing the county in its lawsuit against Badd Kitty, a lingerie and sex toy store that officials say is too close to Murrells Inlet homes.

Bergthold could not be reached for comment. His assistant said he does not respond to media inquiries unless his client — in this case Horry County — approves of the interview.

County spokeswoman Lisa Bourcier gave a succinct explanation for Bergthold’s services.

“The expenses were necessary due to all the reasons that were stated during the county council process in adopting the new legislation,” she said via email.

When county officials hired Bergthold, they said they needed to rewrite their policies because the regulations were outdated and indefensible in court. Some of the ordinances on the county’s books had been struck down more than a dozen years earlier.

The county’s first gentleman's club, Thee DollHouse, opened in 1988. Horry’s first adult business ordinance was written the following year. Dancers bared their breasts and wore G-strings until the county stepped in to make them cover up. The two sides landed in court in 1994. Five years later, Thee DollHouse’s appeal to operate as an adult entertainment establishment was denied by the U.S. Supreme Court, though the club remained open and operated as a non-adult entertainment venue.

In 1998, the Pink Pony in Garden City Beach sued Horry County after the county required a 6-foot separation between a dancer and patron and mandated a common tip jar for all gratuities. The lawsuit contended that the policy violated the constitutional rights of equal protection and freedom of speech. Two years later, a federal judge ruled the ordinance was too broad and therefore unconstitutional.

In the early 2000s, the county went to court with Excitement Video Inc. on U.S. 501 and Seaboard Street and spent four years in litigation only for the owners to reduce the amount of adult-oriented films and abide by the law. The county tried police raids in 2004 and resurrected the ordinance fight in 2005 and 2006 to no avail.

In 2013, the county was sued in federal court by a strip club owner who wanted to open another club on Restaurant Row but was denied by the county. Horry officials turned to Bergthold because of his expertise.

“Local government can’t ban sexually oriented businesses,” Bergthold told county council members in 2013. “But they can stringently regulate the time, the place and the manner of their operation. What the courts have documented over decades are the negative secondary effects associated with these types of uses.”

He described those “secondary effects” as drug and sex crimes, property crimes and late-night noise.

The county passed two ordinances. One dealt with zoning rules, which required that adult businesses operate at least 1,500 feet from certain structures, such as residential properties, churches and day cares. The other focused on conduct, setting strict rules for nudity and businesses with viewing booths.

The county’s policies do not effect clubs in municipalities such as Myrtle Beach and Atlantic Beach, which have their own regulations.

When asked about the money spent on Bergthold’s firm, council members had mixed reactions.

Councilman Harold Worley, who voted against the updated ordinances in 2013, said he cautioned the council then that rewriting those laws would cost the county hundreds of thousands of dollars in legal bills.

“I warned them,” he said. “I said that’s what’s going to happen.”

He also said the payments to Bergthold’s firm don’t represent all the taxpayer dollars going to regulate adult entertainment in the county.

“That’s not all they’ve spent,” he said. “What about staff time?”

The county has also paid the Battle Law Firm in Conway for helping develop and defend the adult entertainment policy, but it’s unclear how much that firm received. County officials said Battle does a variety of legal work for the county and they can’t separate the adult entertainment hours from the time spent on the other services the firm has provided.

At this point, Worley said there’s little he can do.

“Sure, it bothers me,” he said. “But I was outvoted and it is what it is. I think it’s spending good money after bad.”

Councilman Gary Loftus, who supported the regulations in 2013, said the county needed to set aside specific areas for those businesses.

“We can’t disallow it,” he said. “That’s unconstitutional.”

Loftus noted that many adult establishments bring other unwanted problems, including drugs and crime.

“A lot of people say, ‘Well, why? Why are we expending this energy on what a lot of people consider a victimless crime?’” he said. “If you dig into it, it really isn’t.”

Solicitor Jimmy Richardson agrees.

Richardson pursued public nuisance actions against four strip clubs in 2014 and all of the businesses closed. The clubs, as well as a bookstore and novelty shop, were deemed nuisances due to the number of police calls and complaints about lewd behavior at the properties.

The solicitor stressed that his cases had nothing to do with the county’s 2013 policies.

“It’s not about pasties,” he said. “It’s not about the height of stages. What’s going on here is drug sales and real live prostitution and organized crime.”

Although his efforts didn’t focus on the county’s policies, Richardson suspects the two enforcement actions may be related.

“I cannot say that one is totally foreign to the other,” he said. “Probably what happened is those clubs, to stay open and stay in the adult business, with the extra restrictions of having to stay on stage and whatever else, may have had to double down. … Basically, the water shifted. And I don’t know if that brought in drugs or prostitution and everything else. Suffice it to say, if you can see more on the beach than you could at this club, then the club’s got to have some reason for you to go in there.”

Since 2013, the county has restricted adult-themed businesses to one of three zoned areas in the county: highway commercial, limited industrial and heavy industrial.

Not a single adult business has sought to move into one of those zones, said Janet Carter, the county’s planning director.

“There hasn’t been a lot of activity,” she said.

Some businesses have fought to stay open or expand, but so far no one has succeeded.

The former owner of the The Gold Club, Myrtle Beach businessman Michael Rose, sued the county in federal court because the county wouldn’t let him open a club in the former site of Thee Dollhouse on Restaurant Row.

Last year, the court sided with the county in that case.

Rose’s attorney, Michael Murray of Cleveland, Ohio, could not be reached for comment.

Rose has had other legal problems besides his dispute with the county.

On Monday, he pleaded guilty to numerous federal charges, including one count of racketeering, one count of racketeering conspiracy, 104 counts of money laundering and one count of conspiracy to distribute a controlled substance. The charges bear a maximum sentence of life in prison. He is set to be sentenced May 31.

Airport XXXpress Video off U.S. 17 Bypass was closed in 2014 after an investigation by Richardson’s office reported lewd behavior at the adult bookstore. The owner, Kelvin Lewis, has tried to modify and reopen the business but has not received county approval.

Lewis declined to comment, citing the ongoing court proceedings with the county.

“Other than those legal battles, that’s really pretty much it,” said Carter, the planning director. “It’s been pretty quiet.”

Some of the former adult establishments have reopened as other businesses suitable for their neighborhoods, Carter said. Two North Myrtle Beach buildings that had been strip clubs are now restaurants and the former Gold Club near the Intracoastal Waterway was converted into a nightclub.

Carter said the new businesses in the previously adult clubs were closely scrutinized by the county before they were approved.

“We did the absolute best we could there,” she said. “As far as I know, there have been no issues [with new owners].”

When the county began examining its adult entertainment rules, officials said there were eight businesses fitting that description in the county.

Officials say the only one left is Badd Kitty, which opened in 2010 on the South Strand.

Owner John Gaik has said he thought his business would be grandfathered in under the county’s old policies because his business opened before the new zoning regulations were passed.

In court papers, county officials have said Badd Kitty violated both the old and new restrictions because it’s a “sex paraphernalia store” that’s located too close to residential areas.

Gaik, who also runs Badd Kitty stores in Myrtle Beach, Atlantic Beach and Charleston, referred questions about the county’s lawsuit to his attorney, but he did say he’s been encouraged by the support he’s received since the media began reporting on the suit. The county’s legal action only applies to the Murrells Inlet location.

He’s preparing to open a store in Pawleys Island and he said he’s enjoyed reading the online comments connected to the news stories about his shop.

“[They] think this is absolutely ridiculous,” he said. “They think I run a classy operation. It’s a nice store. They have no problems with the store.”

County leaders say they haven’t heard much feedback since the adult entertainment ordinances were rewritten three years ago.

“I haven’t had an ‘Atta boy!’ or a ‘Go to hell!’ Either one,” Loftus said. “Which is unusual.”

This story was originally published January 30, 2016 at 12:54 AM with the headline "Since 2013, Horry County spent more than $200K regulating adult entertainment."