DC Appeal Court Remands Matter to Determine Whether the Zoning Administrator Properly Made a Determination that the Planned Use of the Subject Property Would Not Constitute a Sexually Oriented Business Establishment

The Zoning Administrator (ZA), whose office is part of the District of Columbia Department of Consumer and Regulatory Affairs (DCRA), granted a series of certificates of occupancy to Stadium Group LLC to operate “Stadium Club” as a “Nightclub and Restaurant with accessory parking (Not a Sexually Oriented Business Establishment).” Petitioner Ward 5 Improvement Association (Ward 5) appealed the issuance of those certificates to the District of Columbia Board of Zoning Adjustment (BZA). Ward 5 argued that Stadium Club was a “sexually-oriented business enterprise” (SOBE), and therefore under 11 DCMR § 801.2 (2008) could not operate as a matter of right in a C–M–zoned area. DCRA responded that “a nightclub that offers nude dancing entertainment is not a sexually-oriented business establishment” per se and claimed that the ZA did not err in issuing the certificates of occupancy. Stadium Club intervened to defend the ZA’s decision, and the BZA upheld the ZA’s decision, which Ward 5 appealed.

In reviewing a BZA decision, the court had to determine (1) whether the agency has made a finding of fact on each material contested issue of fact; (2) whether substantial evidence of record supports each finding; and (3) whether conclusions legally sufficient to support the decision flow rationally from the findings. In this case, the BZA failed to make essential factual findings regarding the information available to the ZA at the time he issued the second permanent certificate of occupancy on June 24, 2011. Without such fact finding, the BZA could not assess the reasonableness of the ZA’s decision to issue that certificate. Thus, the BZA needed to consider whether the kind of dancing featured at Stadium Club involved “fondling,” “erotic touching,” or acts of “sexual stimulation or arousal,” as the BZA interprets those terms in light of its precedent, and consider whether these activities occurred despite Stadium Club’s “Rules and Regulations for Dancers” that purported to ensure compliance with zoning requirements. Accordingly, the order was vacated and the case was remanded for additional findings of fact.

Ward 5 Improvement Association v District of Columbia Board of Zoning Adjustment, 98 A. 3d 147 (DC App. 8/21/2014)

The opinion can be accessed at: http://caselaw.findlaw.com/dc-court-of-appeals/1676240.html