THE ADULT ENTERTAINMENT INDUSTRY IN SOUTH FLORIDA
IS GOING THROUGH SOME HARD TIMES…and that is no pun!
By: Edwin L. Crammer, CPA – Back in the days of old, that is the last half of the last century and up until the first five years of this century, South Florida was an entirely different place. What I mean is that during the middle years of the last century leading up to the end of the last century, South Florida was known as the place to visit, and have a good time and leave your money behind.
During this period, many of the year round residents of South Florida and also those individuals who were affectionately known as “snowbirds” were of retirement age, and therefore, for the most part not employed. The economy of the area was pretty much based on visitors to our State from points outside of Florida as well as overseas. They came to Florida in order to have a good time and spend some money.
It was during that period that the Adult Entertainment Industry business flourished in South Florida. You could hardly drive ten miles without passing one or more of these brazen enterprises. Most of these clubs were located in the eastern part of the County as these were the only areas of development at that time. Another reason that those places were located in the East is because that was where the tourist hotels were located for the most part. These tourist hotels fed the Adult Entertainment industry. Then during the late seventies the occupied part of South Florida rapidly grew from east to west. As each year passed by, more and more land was developed further to the West. Residential homes and new shopping centers began to fill up those spaces. Many new businesses sprung up in these neighborhoods. Over time a few of these clubs began to open for business further West in order to serve those newer neighborhoods.
As time went by, South Florida began to change in its makeup. More and more younger families began to move in and settle down in the South Florida corridors. This was quite evident in Broward County. Part of this influx involved and included families that for years had made their roots in Miami-Dade County. For one reason or another these families had decided to move North into the nicer newer neighborhoods in Broward County.
However, despite this the Adult Entertainment industry continued to flourish. This was because the tourist element that visited South Florida was still strong. Those visitors continued to supply those hard core customers that these enterprises needed to flourish. One other element that also helped these clubs flourish was the fact that new sports teams opened for business in South Florida during this period. Not only did visiting fans from out of town patronize these clubs but many of the players on those teams would visit these clubs for recreational purposes. One club owner told me a number of years ago, that it was not unusual for a major player on one of the local teams spend several thousands of dollars in their facility in one night.
But now it is the year 2013. Things are now different. It started about the end of the year 2005. This was the time of the start of the great recession in this country. People were out of work, and people had little expendable cash. As a result they passed up visiting these clubs in droves, or reduced the number of visits to these clubs, or they spent less when they visited these clubs. Another factor to be considered was that about this same time, local cities started cracking down on these clubs. They passed new regulations making it difficult for a new club to open. New zoning regulations limited the areas where a new club could locate in, if they chose to open up in the County. Those areas would for the most part be in an industrial zone with limited access. As a result no new clubs have opened in Broward in the last ten years.
During the heyday of the clubs, I had made a comment to one of the club owners that their business was a “Cash Cow”, which means it looked from an outsider point of view that the club was printing money from all of the cash flow I could see coming off their books.
I had a discussion recently with a club owner about the fact that many of the clubs in Broward and Palm Beach Counties were crying the blues because their revenue was now way down. His answer to me was the influx of Casinos in the area over the last ten years was siphoning off the big spenders, that used to drop a lot of cash in their place of business.
But then I thought, what about Las Vegas? That city as we know has many casinos, but it also has a flourishing Adult Entertainment industry. In fact two of the largest Adult Entertainment enterprises in the country, are flourishing in Las Vegas despite the casinos. Why are those clubs doing so well? I was told by an employee of one of the clubs, namely “Spearmint Rhino” that they have about forty dancers on the floor twenty four hours a day three hundred and sixty five days a year. That translates into a lot of revenue.
To find the answer, I queried my source from “Spearmint Rhino” as to why they are so successful in light of the number of casino’s in town. She told me that the reason is Las Vegas is two towns. It is a tourist town and a convention town. The tourists come to Las Vegas to visit the casino’s and see the shows. The conventioneers visit the Adult Entertainment enterprises in the evening after the conventions close down for the night. It seemed to make sense, but who knows?
Anyway if after reading this column you begin to feel sorry for some of these local club owners, my suggestion is that you support your local club today by stopping by over the weekend and dropping some hard cash.
You can contact Edwin L. Crammer at: ED@www.eyeonsouthflorida.com