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Pharr shuts down strip club after ownership changes hands

Can’t remember what year it was, circa mid- to late-1990s, but suddenly, the city of Pharr was faced with not one, but two strip clubs opening within what seemed like months of each other: Xoticas on N. 281 and Stilettos on Sugar Rd., housed in what used to be a funeral parlor way back in the day.

In the old days, mid-1970s, when Johnny Rogers opened the Valley’s first strip club on FM 495 in Pharr, “The Other Place,” there was little to no public backlash. By the time that Xoticas and Stiletto’s opened, though, people were lining up outside the establishments, preachers scattered here and there, holding prayer meetings that God might prevent the clubs from opening.

At first, the city said no, we don’t want any more strip clubs here, but then the club owners sued the city and won. Only now, the phrase “strip clubs” was passé, and the new name for them, “Gentlemen’s Clubs,” had become the norm, even if the wives w e r e n ’ t swallowing the name change.

Now, however, Xoticas on N. Cage is closed down as of last Friday after the city of Pharr successfully filed a temporary restraining order (TRO) against it because the club’s new owners had failed to apply for a new Sexually Oriented Business License.

When the topless/lap dance club opened, it was under the auspices of a city ordinance passed in 1995 tied to sexually oriented businesses (SOB); but the ordinance was revised in 2002, adding some more hoops to jump through should another topless bar want to locate within city limits. Some of those new conditions include increasing the proximity between the SOB and neighboring businesses.

When Stiletto’s opened, for example, the old Yamaha motorcycle dealer right next door was less than excited.

Also, the new ordinance stipulated that the SOB license was nontransferable. In other words, Xotica’s and Stilettos could remain open, but they couldn’t transfer the SOB license should the owners decide to sell.

TABC (Texas Alcohol Beverage Commission) serves as a backstop to any change of ownership since a liquor license, which doesn’t come cheap, cannot be used by or transferred to another person or entity. If the business changes ownership, according to the TABC, the new owner must apply for his or her own license, same as the SOB.

According to the TRO filed by the city of Pharr Jan. 7, that’s just what Xoticas has done: sell the business to Las Vegas-based Peppermint Hippo without applying for a new SOB, while using Xoticas liquor license and SOB; both of which are prohibited by law/city ordinance.

Based on the TRO, it appears that the owner of Xoticas is based out of Laredo, while the operating manager of Peppermint Hippo’s is based out of Houston, with Hippo’s main office in Las Vegas.

Pharr says in its court filing that it’s obvious that the sale went down between the two entities. The water service is now filed under Hippo’s name (N. Cage Foods, LLC), whereas before, it had belonged to a guy named Kenneth D. Smartt, managing member of KDS III Land Development LLC.

Apparently, according to Pharr’s request for a TRO (granted in Judge Singleterry’s District Court), Peppermint Hippo has already remodeled the building, advertised for dancers, and has made public that Xoticas is now under new management/ ownership with a new name – Peppermint Hippos. Screen shots announcing that posted on social media are part of the city’s TRO.

On Oct. 9, 2020, according to the city’s TRO, a Hippo rep sent an email to the city that it had decided to forego a business venture with Xoticas, and that the previous lease agreement was null and void. Apparently, the idea of trying to get a new SOB license and liquor license was a deal-buster.

Approximately two months later, Dec. 16, 2020, the city received an email from Edinburg-based Attorney Preston Henrichson saying he represented Hippo and was requesting information on the process for obtaining an SOB license. The city sent him the info he requested, but heard nothing further from him, according to the TRO petition.

On Dec. 28, according to the city’s TRO, Peppermint Hippo’s manager, Dairo Orozco, posted on Facebook that “Peppermint Hippo, Formerly Xoticas” was holding dancer auditions from Dec. 28 thru Dec. 30.

Then, on New Year’s Eve, Orozco posted on FB: “The time has finally come, ending 2020 with a bang and starting 2021 is the place to be in the Valley.”

According to the TRO, Pharr city code enforcement officers and fire inspectors arrived at Hippo NY’s Eve and observed the place at full capacity, with dancers on stage, on men’s laps, simulating sex acts while decked out in lingerie, “with their bare breasts and buttocks” exposed. Photos were taken to back up the city’s claim.

After filing the TRO petition last Thursday, city code enforcement officers shut down the strip club Friday, Jan. 8.

Another court hearing is set for Jan. 21, during which the city will ask the judge to grant it a permanent injunction, effectively shutting down Xoticas/ Peppermint Hippo until it can get a new SOB and liquor license.

Advance Publishing Company

217 W. Park Avenue
Pharr, TX 78577