The City of Milwaukee has been ordered to pay Silk Exotic $482,586 to cover attorney fees and out-of-pocket expenses following a lawsuit the company’s owners brought forth last year after being denied a license to open a strip club Downtown.
The ruling Monday, by U.S. District Judge Lynn Adelman, brings the total the city now owes to Six Star Holdings, LLC and Ferol, LLC, the entities formed by Silk owner Jon Ferraro and his partners for the purposes of opening a downtown club, to close to $1 million.
In February, a jury awarded Silk $435,500 in federal court for revenue lost because the city would not grant the company a license for a Downtown strip club.
That suit is on appeal in the 7th Circuit Court of Appeals. The second lawsuit against the city has been assigned to Adelman, who presided over the first trial.
Silk was represented by The Jeff Scott Olson Law Firm. Olson was paid $575 per hour for his work. Trial consultant Sara Furey Crandall, who is also an attorney, was paid $385. Associate attorney Andrea Farrell was paid $350 an hour. Law clerks and paralegals were paid $150 an hour.
The firm spent a total of 1,032.8 hours on the case.
The city argued that the firm’s rates were excessive. A survey conducted by the State Bar of Wisconsin found in 2012, the average hourly rate for personal injury lawyers was $207 and the 95th percentile hourly rate for all private practitioners in Wisconsin was $395.
Adelman disagreed, saying the survey reflected rates from 2012, not present day.
Silk’s owners also asked for out-of-pocket expenses totaling $57,033. The city argued that the expenses – including two breakfasts that cost $30 each and hotel costs totaling $3,813 – were unreasonable; however, Adelman believed the costs were reasonably incurred.
Olson said he client was pleased with his success in court, but would rather make money running a downtown club than suing the city.
“He will take suing the city as a second choice,” Olson said. “The city has had so many opportunities to resolve this cheaply. But we make our living on unreasonable settlement decisions.”
Silk has tried since 2009 to open an establishment downtown; its latest proposal was to put a club on the fourth floor of an office building at 804 N. Milwaukee St. was denied last month.
Assistant City Attorney Adam Stephen said the city is reviewing the order right now and he expects it will be appealed.
Silk has three locations, one location in Milwaukee, 11400 West Silver Spring Road, and locations in Middleton and Juneau.
In 2010, the Common Council rejected Silk Exotic strip club proposals at 730 N. Old World Third St. and at 117 W. Pittsburg Ave. in Walker’s Point. In 2013, Silk Exotic tried unsuccessfully to open approval for plans for a strip club in a city-owned parking structure at 4th Street and Highland Avenue, across the street from the BMO Harris Bradley Center.
Last year, the Common Council rejected two more Silk Exotic proposals in Walker’s Point at 505 S. 5th St. and 906 S. Barclay St.
Milwaukee Alderman Tony Zielinski is working on legislation that would create designated neighborhoods for adult entertainment in the city.
Olson said designated adult entertainment areas could work, but he anticipates neighbors still objecting to a strip club in their vicinity.
“If you decide to put it between two garbage dumps you are still going to have the rats come to the city council and complain and the city council is going to listen to the rats,” Olson said. “Until you have some specific and objective standards for who gets a license, no one is going to get a license for a gentleman’s club in Milwaukee.”
