Cleveland City Council approved a tax break for the city's small, independent music venues and comedy clubs as the local entertainment industry continues to recover from the COVID-19 pandemic, but one council member put up a fight over the exclusion of strip clubs.
The new law will eliminate the city's 4% admissions tax for small, locally run music venues with capacity under 750 people. Venues under a 150-person capacity will continue to be exempt from the tax.
Kris Harsh, who represents the West Side's Old Brooklyn neighborhood, said the tax exemption could help offset losses caused by the pandemic, as well as shifting trends in .
While Harsh, joined by Happy Dog owner Sean Watterson and Economic Development Director Tom McNair at Monday's finance meeting, lauded the law for benefitting the local art scene with "minimal" cost to the city, the conversation derailed over businesses that would be left out: strip clubs.
"Entertainment is entertainment," said Councilmember Richard Starr, whose Ward 5 includes Central, Kinsman and parts of Downtown and the Industrial Valley. "Me, I don't want to see that certain business entrepreneurs feel targeted because of the type of business that they provide."
An amendment to the original legislation defined a strip club as any "place, venue, club, cabaret, bar, lounge, theatre or other establishment that regular (sic) features live nude, semi-nude, or topless dancing, exotic dancing, or other substantially similar adult-oriented live entertainment."
Only two such venues, Larry Flynn's Hustler Club and the Gold Horse, would qualify with a 750-seat capacity. Many strip clubs throughout the city already do not pay the tax, Harsh said, as the capacity is under the 150-person threshold, and therefore exempt from the tax.
Still, some council members had questions about the exclusion.
"How did [strip clubs] get pulled out? They are entertainment as well. I don't go to them, let me clarify," said Councilmember Kevin Conwell with a laugh. He later suggested funneling the taxes generated by the strip clubs back into arts programs for children.
Councilmember Jasmin Santana said she refused to pass the law if the strip club exclusion was struck, citing .
"I'll be damned to put my name on a piece of a legislation that gives tax credits to strip clubs," she said.
Still, Starr insisted council's objection was a moral one, and they were targeting small businesses based on the type of entertainment they approved.
"Whether you like the entertainment or not, if they're being taxed, we can't try to make a law to just exclude them when we're going to give everybody else breaks," Starr said. "And like it or not, that is something that is coming to our general fund."
Harsh said strip clubs have always been "treated separately, differently," citing zoning codes, "because they are different."
"No strip club is the entertainment anchor of a neighborhood," Harsh said. "They're not being targeted or picked out. It's just that we are focusing on the venues that are open that I can take my daughter in and have a hot dog and listen to some music on a Thursday night. I'm not taking her to the strip club, right? We just have to understand that these are very different business interests."
Ultimately, Starr was the only council member who voted against the strip club amendment. The law passed at Monday night's meeting, with Starr voting no.
Watterson said the law will save the Happy Dog, a hot dog joint that regularly hosts live music, between $4,000 and $5,000 annually.
"We're anchors in the neighborhoods," Watterson said. "We are in Gordon Square, the Beachland Ballroom in the Waterloo Arts District, the Foundry now in Old Brooklyn ... We really do feel like we're contributors both to the economy and to the culture of the city."
The city first imposed a 6% admissions tax in the 1970s before boosting it to 8% in 1995 to help fund construction of the city-owned Browns stadium downtown. In 2012, the city amended the tax: venues under a capacity of 150 became exempt and those with a capacity between 150 and 750 were charged 4%.
Under the new law, the city will lose about $341,000, or roughly 1.1% of the city's projected 2026 revenue, Harsh said.
A study from the National Independent Venue Association found Cleveland's independent venues generate $1.17 billion in annual economic output for Cuyahoga County, but three-quarters of those venues lost money in 2024.
