Number Thirty Eight Could Lose Cabaret License for Live Music

The annual cabaret license renewal process for Denver venues that offer live music is almost always an administrative formality; the Department of Excise and Licenses usually grants the renewals with a minimum of fuss. On rare occasions, however, neighbors protest the renewal of a cabaret license, resulting in an administrative hearing organized by Excise and Licenses...and a lot of noise.

Now people are sounding off about Number Thirty Eight, a massive hybrid indoor/outdoor live-music, food and booze venue at 3560 Chestnut Place that was named Best New Venue in Westword's Best of Denver 2021. When Number Thirty Eight, which opened in October 2020, applied for its license renewal, some neighbors complained, saying that the sound generated by live performances has made their living situation unbearable. As a result, Denver Excise and Licenses held an administrative hearing on January 26.

On February 6, Boulder lawyer Macon Cowles, who'd been hired by the city to oversee the full-day hearing, issued his recommendation that the Department of Excise and Licenses not renew Number Thirty Eight's cabaret license.

"The evidence establishes that the residences that share the block with No. 38 are awash with the amplified sound of No. 38 musicians four days a week for as many as nine hours a day during good weather. This has made it unlivable for these residents and their guests. The volume of sound originating at No. 38 deprives residents of the qualities they expect in their homes: the sense of comfort, privacy and security, free of unwanted and constant aural and visceral intrusions," Cowles wrote, noting that efforts by Number Thirty Eight to mitigate the loud noises emanating from the venue had not been enough. "The volume of music has gone from being shocking and 'unbelievable' to being always audible, everywhere in the adjacent residential units with sound and thumping from No. 38 intruding into the residences. Intimate moments between lovers are shattered by the sound and people living nearby cannot listen undisturbed to their own music, as the sound from No. 38 overwhelms the adjacent homes."

The final decision on whether Number Thirty Eight can keep its cabaret license rests with Molly Duplechian, the interim executive director of Excise and Licenses, who took over after Ashley Kilroy left in early January; Mayor Michael Hancock has tapped Duplechian to become the permanent executive director, subject to Denver City Council approval. Duplechian will have to consider Cowles's recommended decision, objections to that recommended decision and any objections to those objections. And then she will issue a final decision by some undetermined date. Until then, the music continues.

No matter which way Duplechian rules, it will have major implications for Number Thirty Eight. If the cabaret license is denied, the 31,000-square-foot venue will still be able to serve alcohol and food, but won't be able to offer live entertainment or even allow dancing without applying for a new permit.

"You could have background music. You could have a jukebox playing. But if there’s anyone doing the jitterbug, you’d have to get a cabaret license," says Eric Escudero, an Excise and Licenses spokesperson who acknowledges that his dance reference is a bit dated.

Number Thirty Eight, which is represented by liquor-license attorney Robert Runco, has until February 18 to file its objections to the recommended decision. The RiNo Art District has already responded, sending a letter outlining its concerns about Cowles's recommendation:

"Without the cabaret license, the area will lose a valuable contributor to the local community, as no other adjacent venue provides the range of entertainment currently being offered at Number 38. The venue draws visitors, many of whom also patronize other local business and experience the area’s vibrant arts scene. Failure to renew the cabaret license will have a detrimental impact on the local economy and the area’s community of artists," wrote John Deffenbaugh, senior director of strategy and projects for the RiNo Art District.

But Tom Downey, an attorney who once headed Excise and Licenses and is now representing the people opposing the renewal, says that those neighbors aren't wholly opposed to the venue — they just want to live in peace. "They are not the sit-on-the-porch-and-scream-at-kids, get-off-my-lawn kind of folks. They chose to live in RiNo for a reason. They wanted to be able to walk a quarter of a block and go have a drink. They wanted mixed-use. They wanted to be in the city. They chose not to be in Arvada," Downey notes.

But the noise got to be too much, he adds: "It was every weekend, multiple times a week having amplified music."

Music was always part of the plan for the venue, created by co-owners Spencer Fronk and Andrew Palmquist. In June 2020, Excise and Licenses held a hearing on Number Thirty Eight's initial application for a hotel and restaurant license with a dance cabaret aspect. Hearing officer Bruce A. Plotkin offered this description of the planned venue:

"The venue combines an indoor bar and eating area with an outdoor entertainment stage and volleyball area. Food will be served by rotating chefs to include such fare as pizza, sandwiches and other 'international bar fare.' 30 to 40 percent of the gross revenue will be from food and nonalcoholic drink," Plotkin wrote. "Garage doors open the venue from its interior to exterior spaces. Operating hours will be Monday through Thursday from 3 p.m. to midnight and Friday through Sunday from 11 a.m. to midnight. Outdoor entertainment will cease at 10 p.m., in compliance with city noise ordinances. The neighborhood contains liquor-licensed venues with entertainment, including other craft breweries, but none at the scale or scope of the applicant."

Plotkin considered three affidavits from neighbors who supported the application and also heard testimony from three neighbors who were opposed, all of whom expressed concerns about noise. — including Daniel Ritchie, who has lived in this part of RiNo since 2016.

"His rooftop deck overlooks the proposed licensed area, including its outdoor stage. He is concerned that the proposed license will create excessive noise, but expressed no concern about the Area need or desire for the proposed Hotel and Restaurant license, beyond the potential for noise under the proposed Dance Cabaret License," Plotkin wrote.

But Plotkin was not swayed, even though they were "sincere concerns," he said. "Speculative concerns are insufficient to establish good cause to block issuance of an otherwise lawful application," Plotkin wrote in recommending that the venue receive the licenses.

In early July 2020, Kilroy signed off on Plotkin's recommendations, and granted the licenses for Number Thirty Eight.
The venue — whose name refers to Colorado's status as the 38th state in the union — opened three months later, and immediately began hosting free performances of all different types of musical acts outdoors. Almost as immediately, some neighbors began complaining about noise.

"When the first band after No. 38’s opening began to play music, the neighbors gathered in the alley and decided that there was no way that this would become livable. The neighbors contacted the owners of No. 38 and told them that this has got to change," Cowles wrote, adding that Ritchie "contacted the owners and got no response for months."

During the January renewal hearing, Number Thirty Eight co-owner Palmquist testified that he and venue staffers took various steps to mitigate the noise, including hiring sound professionals for advice on how to reduce the impact, buying a sound box to surround the drum set and extending the wall behind the stage.

But according to Jeremy Bryant, a neighbor who lives near the outdoor stage and, like Ritchie, opposes the application renewal, mitigation efforts have only led to the situation going from "as bad as it gets" to a "less extreme disturbance."

According to Ritchie, the music is so loud that "you can hear it when you are in the shower, when working and thinking of issues or during work conversations, there is the sound and thumping in the background."

The January hearing also featured testimony from Paul Riedesel, the City of Denver's noise and acoustic expert. Riedesel had inspected Number Thirty Eight on multiple occasions because of noise complaints and at the venue's invitation. Riedesel's conclusion from a November 2020 inspection was that "it might not be possible to be compliant [with Denver's noise ordinance] and still provide an experience that would be enjoyed by the No. 38 patrons," Cowles noted. "Riedesel recommended moving the music indoors. He concedes that if the owners have enough money, you can engineer your way out of this, to and including completely enclosing the outdoor area,"

The Denver noise ordinance allows levels of 55 decibels (dB) from 7 a.m. to 10 p.m., and 50 dB from 10 p.m. to 7 a.m. on what's known as the A scale, which is meant to mimic human hearing. This noise level is measured at the property line of the residential property.

"It’s a purely black-and-white line for us. You either meet certain numbers or you don’t," says Riedesel.

When Riedesel returned to the area one Friday in June 2021, he measured the sound from Bryant's deck while a band was playing outside at Number Thirty Eight between 6:30 and 7 p.m. The peak sound hit 76.7 dB. Since the decibel scale is logarithmic, a measurement of 76.7 dB at that time is "roughly three times what is allowed by the Denver noise ordinance," Cowles wrote. Riedesel issued a noise-ordinance violation warning to Number Thirty Eight following that inspection.

"The noise ordinance is the law, so everyone is entitled to the law. You can get a bunch of people really liking the fact that you’ve got a music venue right next to you, but all it takes is one person to complain about it, and that’s what’s going to trigger us checking for compliance," says Riedesel.

Given the testimony, Cowles sided with the opponents, saying that it would be best not to renew the cabaret license of Number Thirty Eight, especially since other venues in the area have projected amplified sound in the area without generating similar complaints.

"The situation clearly presented is that the owners of No. 38 have decided what sounds and at what volume the residents nearby cannot live without, and cannot escape. It is unhealthy for the designated area to have residents subject to this bombardment," Cowles wrote.

His clients don't want to shut down Number Thirty Eight, Downey says, and "view this as a pause in the license, even though technically it would be non-renewal and the license would die. They'd be giving the owners time to do what they have been promising all along....It’s construction. It’s building it in such a way that the music won’t pound the wall. They can do the walls in certain ways. They can have indoor concerts."

But some neighbors have no problem with what Number Thirty Eight is doing currently. Lance Peterson, owner of the nearby Ironton Distillery, submitted an objection to Cowles's recommendation. "Being the immediate neighbor to Number 38, I can attest they are good neighbors within an evolving community," he wrote. "Our neighborhood is drastically transitioning towards an arts and entertainment-focused district, and Number 38 is a valued member of the direction of such community. The designated area would lose a key contributor to the arts should Number 38’s license be revoked. As evident within the hearing, there is tremendous support for Number 38 — support that clearly outweighs the minority opposition presented within the hearing. Number 38 has never received a violation from the city and, as stated by Paul Riedesel within the hearing, it is clear Number 38 can operate its cabaret license legally. Not renewing this license would be a dangerous precedent to set, and one that would surely be met with community rebuttal."

Number Thirty Eight's owners declined interview requests, but a spokesperson emailed a statement on Palmquist's behalf: "Number Thirty Eight has received and is surprised at the hearing officer’s recommended decision to not renew its cabaret license. We, along with our community, are currently preparing our objections based on the overwhelming neighborhood support and lack of any prior license violations. We look forward to the Department's final decision, and our ability to continue offering Coloradans a unique gathering spot."

Here is the recommended decision: