Lawsuit by Nude Club Delays Oceanside Bond Sale

A lawsuit by the owner and manager of a downtown topless and bottomless club has forced Oceanside to delay the sale of $37 million worth of bonds intended for a variety of redevelopment projects.

Assistant Redevelopment Director Eli Sanchez said the sale, which had been scheduled to close Tuesday, will have to be put off for at least 60 days.

Acting City Atty. Dan Hentschke said Tuesday that the delay is necessary because it will take at least that long to get the issue before a judge in the crowded North County Superior Court.

“We anticipate that we can have the suit resolved within two months,” he said. “That’s optimistic, but I think we can do it.”

The suit filed June 9 by Edward J. (Skip) Arthur, owner of the Playgirl Club on Mission Avenue, and his general manager, William L. Calder, alleges that two of three City Council members who voted to approve the bond sale have a conflict of interest because they own property in the downtown area.

The club, a downtown fixture embarrassing to redevelopment backers, does not serve liquor but features all-nude dancers. The city has proposed buying and demolishing the building to make way for projects to be funded by the bonds.

Arthur and Calder allege that the two council members will personally benefit from the bonds. Don Rodee owns a condominium in the harbor area, just outside the 375-acre redevelopment zone. Nancy York owns a condominium in the 900 block of North Pacific Street, within the zone.

“It’s a totally frivolous lawsuit,” York said. “It is so obvious that I do not have a conflict of interest. I have no business in the downtown area. I do not own developable land, (and) there is just no way that these bonds are going to have any kind of a financial impact on me whatsoever.”

“It’s completely off the wall,”’ Rodee said. “It’s ridiculous. It has no merit.”

Arthur, who owns other businesses and property downtown, could not be reached for comment.

Calder applauded the bond sale delay.

“That’s round one,” he said. “We’ll see what happens. We’re just going to keep moving forward.”

Aside from redevelopment projects, Sanchez said, the suit is stalling two other important programs whose bonds are lumped into the same sale.

One is a $930,000 loan program to encourage owners of buildings that do not meet current state earthquake standards to retrofit their buildings.

The other is a $1-million downtown beautification effort backed by property owners and the Chamber of Commerce.