What’s Going on With The Pearl?

Editor’s note: For the latest updates about The Pearl, read our April 14 story.

In the two days after Denver’s only lesbian bar, The Pearl, announced that it was closing, more than $83,000 was raised via GoFundMe to save it.

The Pearl has been operating out of the legendary Mercury Cafe building at 2199 California Street for a year, providing a safe space for not only the LGBTQ+ community, but also allowing the groups that met at the Merc for decades (such as swing dancing, poetry and tarot reading) to continue using the space.

“When we made the post about closing, everyone was just like, ‘Start a fund! Start a fund! Try to keep it open.’ We had an outpour of people reaching out to all of us — from The Pearl DMs to our personal phones — saying they wanted to be investors, asking where they could give money or what they could do. So we got on the phone together and decided to open a GoFundMe,” says Ashlee Cassity, a co-owner of The Pearl.

The GoFundMe, posted a couple of hours after the April 11 announcement of the venue’s closure, started with a $50,000 goal, which was later raised to $80,000. “The GoFundMe originally started to get us to Pride Month, and then because it happened so fast, we were like, ‘We need to tackle everything to get us back to a level playing field,’ and that’s why it was raised up,” Cassity explains. “And sure enough, the community is amazing. They came out. We were not expecting that, nor were we even going to ask that until we saw how much the community wanted the space to stay open.”

But there are questions about exactly what space is being saved: The Pearl itself, the iconic venue where it’s currently located, or both? And any time a large amount of money is raised fast, people have second thoughts and become skeptical.

Here’s what we know about The Pearl, the Mercury Cafe building, the GoFundMe and allegations circulating about Cassity’s involvement with an anti-LGBTQ church.

Who Owns the Mercury Cafe Building?

The Mercury Cafe was founded by Marilyn Megenity in the ’70s. She spent two decades moving the venue around before finding a permanent home at 2199 California Street in 1990. For the next thirty years, it remained a space where artists (like the late Colorado poet laureate Andrea Gibson) and others found their footing. With its golden lighting, mismatch of furniture and whimsical murals, the building became a cultural landmark and a rare third space in Denver.

In 2021, wanting to retire, Megenity sold the building and business to a team comprising entrepreneur Danny Newman, his wife, Christy Kruzick, and business partner Austin Gayer. But by August 2024, they’d put the Merc up for sale after encountering their own challenges with building maintenance, staffing, money and personal difficulties.

While the building remained for sale, Newman leased it last spring to Cassity and business partner Dom Garcia, who renamed it The Pearl after their last venture, a lesbian speakeasy called Pearl Divers that shared space with Your Mom’s House, was displaced when a new owner took over that Capitol Hill club.

Newman still owns the Mercury Cafe building, and since they leased it last year Cassity and Garcia have kept their promise to preserve the spirit of the Merc and the groups that have been meeting there for decades, while adding new sapphic and LGBTQ-focused events and operating it as a space for the queer community.

What Financial Issues Led to the Venue’s Closure Announcement?

Last month, Cassity told Westword of financial struggles at The Pearl when the team made the strategic decision to move the Friday night poetry open mic, which had been happening in the space on Fridays for more than three decades, to Sundays, so that the slot previously occupied by poets would be open for ticketed events that could bring money into The Pearl.

At the time, she hoped the change could help keep the venue operating, but about three weeks later, The Pearl posted on Instagram that it would be closing.

“It just took a downturn,” Cassity says. “One bad week put us in the hole, the next week we were playing catch-up, and the next week we couldn’t pay payroll. The way we keep our doors open – and it costs so much to keep open – is bodies in the door. And we do have bodies in the door, but buying drinks has slowed down a whole lot, and that’s how we make our money.”

Staffing the venue with security, bartenders, kitchen and cafe employees, and sound engineers for live bands costs $8,000 to $11,000 a week. Meanwhile, building maintenance issues, such as plumbing problems, broken pipes, a broken water heater and broken coolers have been eating away at any remaining funds.

“To get the building up to code to even open was thousands of dollars,” Cassity says. “We had to take out loans just to take care of the maintenance.” And start another GoFundMe to fix the water heater.

“We’re not making millions of dollars off of it, we’re not making thousands of dollars off of it. To be honest, we’re not even making hundreds of dollars off of it,” Cassity adds. “It is literally a passion project for us. We have not made money off the space in a very long time. Since Pearl Divers, we haven’t made money off the space. Everything that we do goes back into the space.”

Like Cassity, Newman cites the high costs of running a business, including increased costs and property taxes of $60,000, for why it’s so tough to keep that building going.

How Will the Money Raised From the GoFundMe Be Used?

The money raised through the GoFundMe will help catch The Pearl up on rent, which Cassity says they are behind on for the month, and cover payroll for employees and a few performers, which they are also behind on, by a week. “We will have receipts, and we will be transparent with the public about everything,” she promises.

And how long will The Pearl stay open at this location? At the moment, Cassity isn’t sure. “This did get us out of a really big hole,” she says of the more than $83,000 raised via GoFundMe. “But all it takes is something breaking in our building.”

Will The Pearl Stay In the Mercury Building or Move to a Smaller Location?

“I think that coming into a smaller building is probably the smartest thing to do eventually,” Cassity says. “That’s not what we want to do, because we want to keep the Mercury building alive, and that’s why we started this. But it is hard for the amount that it costs to operate.”

Currently, that’s not a question that can be definitively answered. Cassity says that multiple investors who want to make The Pearl a permanent Denver space have reached out, and they all have different ideas. Some have said they can help The Pearl find a new, smaller location, while others have offered to buy the Mercury building.

She says meetings are set up later this week with “some really big investors.”

What Will Happen to the Mercury Cafe Building?

When Cassity spoke with Westword in March, she was worried the Mercury Cafe building would be turned into a parking lot if The Pearl stopped operating there. But Newman says he shares the desire to find “some community, arts-focused savior” to keep 2199 California Street going, adding that he’d hoped he could be that person, but that things just didn’t work out. “We’re hoping to find somebody who would like to come in and buy the whole building and make it a nonprofit, or partner with all of us.”

Groups That Meet at the Mercury Cafe Building

Before the building became a designated bar and community event space for the LGBTQ community, it was home to various groups and clubs, including poets, astrologers, tarot readers and swing dancers.

Cassity says that The Pearl owners “did not get a chance to” talk with the groups before making the decision to announce that The Pearl would be closing.

“I went out of town two days before this happened,” she says. “I got a phone call from one of the owners saying, ‘We couldn’t pay payroll, the staff’s upset. We’ve pushed this as far as we can push this. We need to make a decision to close.’ They already had a meeting with some of the staff, who were also pushing for that. We’d never want to not be able to pay people. The decision was made, a post was made.”

At the moment, groups are planning to meet as usual until otherwise stated.

Cassity adds that they didn’t want to make the announcement until Monday, April 13, but word of the planned closure got out to The Pearl’s staff, who were “spreading it around the community.”

Allegations That Co-Owner Ashlee Cassity Was Involved In an Anti-LGBTQ Church

Another thing that’s spreading around the community is an April 12 Reddit post alleging that Cassity is associated with New Creation, an anti-LGBTQ church in Longmont. It includes a link to video testimony of Cassity sharing her story of “finding Christ while owning a nightclub in Texas.” It also includes a link to New Creation’s “What We Believe” section on its website, where it states that it believes that “marriage is defined in the Bible as a covenant, a sacred bond between one man and one woman.”

Cassity says that when she started going to the church, she didn’t know about its anti-LGBTQ stance. Going to church became an important part of her life after going through a dark time with drugs and alcohol when she owned a nightclub, Icon, with her brother in Texas, she adds.

Cassity says a queer friend wanted to help and took her to a queer-friendly church in Texas. “So I started going to church and getting an appreciation for life, instead of looking at the negative and everything bad that’s happened in my life,” she says.

Cassity and her brother sold Icon before Cassity moved to Colorado with her then-wife; she worked in Boulder, so they settled in Longmont. “I wanted to find a church, because that kept me in such a good place, having that. It’s my spirituality,” she says. “I just looked up a non-denominational church, because that’s what I was used to. I didn’t look at websites or do deep research. I just wanted to find a church.”

Cassity says that she went to the church with her wife, and everybody was accepting. Nobody ever said anything that alluded to the church’s right-wing opinions, she adds. The church asked her to make a testimony video because it was looking for testimonies from people who were new to the church, and Cassity agreed.

“I don’t go to that church anymore, because about a year ago, I did find out through a friend of mine from Longmont that it is a church that doesn’t support the LGBTQ community,” she says. “But they never said anything to me about it. I could’ve gone there my whole life and never known that that’s their stance, had my friend not told me. I don’t live in Longmont anymore. I’m not married anymore. And I will be, from now on, looking for churches that support the queer community. And there are a ton in Denver.”

Rather than picking apart her past, Cassity wants people to put their energy into the common goal of saving a queer community space. “At my core, I am a human who loves other humans, and all I want is a space that I’ve been wanting to go to my whole life: one I can go into, be myself, be happy and be the person I am without anyone judging me or looking at me crazy,” she says. “It means so much to us to have this space open. The community spoke — $84,000 in 48 hours. I’m not the only one who feels that way about this space. I ask that we work together instead of trying to pick things apart and trying to make everyone out to be a bad person when we’re trying to do something that means a lot for so many people.”

What’s Next?

Right now, social media drama and finger-pointing.

On April 14, a few of The Pearl’s shift leads posted a statement on Instagram saying that as shift leads, they decided the payroll bouncing in the previous pay cycle was a deciding factor in closing The Pearl at the end of the month, and that they wanted to take time to step back and come up with a plan before leaning on the community for support in the form of a GoFundMe.

“However, one of the owners went ahead and posted the GoFundMe without consulting the other owners, the leads or the staff. Before we even realized the GoFundMe was up, it had gotten close to $20,000 in donations and was past the point of taking it down. The vagueness of the allocation of funds as well as lack of an actual plan to get us through Pride were the exact reasons that we wanted to hold off until we knew where we stood as a business.”

The post adds that “the staff came together and decided unanimously that we could not in good conscience accept these GoFundMe funds with the likely chance of ending up in the exact same position in three months” and that “we have reported the fundraiser as fraudulent and encourage you all to do so as well.”

Meanwhile, Garcia, who has not responded to Westword’s request for comment, posted an April 14 statement on Instagram that Garcia had been handling the backend of business while undergoing health issues, was not involved in the decision to close The Pearl and “woke up to the news last week that the other owners and management decided to close the bar without my knowledge, I found out when staff did.”

Overwhelmed by patron support, Garcia created the GoFundMe. “The staff and other owners were upset with me for that, and I quickly learned the staff had found out from the other owner the blame of the bar closing was all placed on myself, with no explanation other than I’m ‘shady,'” Garcia wrote, adding that “it turned into the opposite of my vision. I heard from my transmasc community that they didn’t feel safe, I heard about abusers in my staff. I heard about truly disheartening things from my other business owners that I trusted.”

But possibly the most disheartening thing is that groups that have found a haven at the Mercury Cafe building for decade are caught in the crossfire, and may need to find a new home.

This is a developing story. It will be updated with more information as it becomes available.