License to Profit

Even though the refurbished Casino Cabaret nightclub in Five Points doesn't have a liquor license, it still serves alcohol at its series of jazz concerts.

How? By having the nonprofit Denver Black Arts Festival obtain special-event liquor licenses from the state liquor division. Such licenses enable nonprofits to sell alcohol at an event and, more important, to retain the bulk of the event's liquor and ticket sales for fundraising.

In this case, however, the festival organizers haven't seen a cent and the club's managers have not promised the organizers a specific share of the profits. The festival, says one observer who asks not to be identified, is "not benefiting from these concerts. They [the club's operators] are just using the Black Arts Festival's nonprofit status."

Perry Ayers, director of the financially strapped festival, says he's just seeking whatever help he can. "They needed a nonprofit in return for support for the festival," he says. "There's not really anything cloak-and-dagger. According to their organization, when the jazz series is over, they're going to lend some dollars to us and help the festival."

City and state officials say the festival received special-event liquor licenses for June 7, June 21, July 12 and July 25 at the Casino. Those dates coincide with performance dates at the club.

The arrangement appears to go against the purpose of special liquor permits issued to nonprofit organizations. "The purpose of those permits is for fundraising," says Helen Gonzalez, of the city's Division of Excise and Licenses. "[The] only persons who can profit is the nonprofit organization. The [club] can just recover costs for having the event."

Joan Vecky of the state Liquor Enforcement Division notes that "the general rule is that whoever holds the permit also takes the profit...[The club] could be paid for rental fee or something like that, or any service provided, but there's no profit to be had."

The rules governing these permits are rarely enforced, says Gonzalez, adding that her agency scrutinizes individual transactions only if a complaint has been received. But despite the fact that the Casino Cabaret is keeping the proceeds from the shows it puts on with the help of the festival's liquor license, Ayers is not complaining.

The DBAF has no commitment in writing to profit from Casino Cabaret's use of the license, but the club's manager, Charles Pankey, insists that the deal between the two organizations--which he admits is just a gentleman's agreement--does help the festival. He contends that the club has given the festival thousands of dollars' worth of publicity by mentioning its name during concert advertisements run on KUVO/89.3 FM and through announcements at concerts. He also promises that "I'll get some people to get some donations. I'll get several thousand dollars."

Pankey says he plans to put out fundraising proposals in the next few weeks to several local brokerage firms in the hope that these companies will chip in to help the arts festival. But that support won't help this year's festival, which is being scaled back from years past. Gone is the usual accompanying parade, and the festival is trading its long-time home in City Park for the East High School esplanade across the street.

Last fall, DBAF organizers announced that their ten-year-old festival, one of the largest of its kind in the country, was losing money. Corporate sponsorship was low, especially when compared with the mainstream Cherry Creek Arts Festival, also held every summer. Now corporate support is virtually non-existent, and some members of the black community have accused festival organizers of a lack of sophistication in running their organization.

The Casino Cabaret itself faces an uphill climb financially. In September 1996, the club received a $450,000 loan from the Mayor's Office of Economic Development as part of a program to attract businesses to low-income neighborhoods. And Pankey presents himself as someone who, like Ayers, is struggling to do something positive in black Denver. "We are set up for profit, but there's no big profit to be made doing this," Pankey says. "Our objective is to uplift the community. We don't have another objective. I don't know any African-American in Denver that can afford to put on a concert and give all the proceeds to charity."

Even when told that that's precisely what the special-event permit requires, Pankey insists that Ayers is not being cheated. "I'm not only saying I'm not exploiting him, I would not presume that I could exploit another African-American," he says, adding that Ayers is too sophisticated to be taken advantage of.

Pankey denies that the desire to serve alcohol motivated his decision to work with Ayers. But if that's true, then why not apply for his own liquor license? "We'll work on that at some point," he says. "We have to evaluate if there is even a reason for us to go forward in this milieu. Don't think this hasn't been a total struggle front to back. It's been extremely tough on us."

Ayers maintains that his arrangement with the Casino Cabaret will benefit the arts festival. "I'm not gonna feel they're taking advantage of it," Ayers says. "They wouldn't do that."

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T.R. Witcher