2017 EXPO | August 27-30

Government Relationships You Need For Your Club’s Future!

Gov panel EXPO2017 12For the first time ever, three key governmental positions were represented at an EXPO seminar, as the “Government Relationships You Need For Your Club’s Future” session featured Charles Wilson, retired commander of the Detroit Police Department, Scott Ellis, Executive Director of the Michigan Licensed Beverage Association (MLBA), and Michigan State Representative Harvey Santana. The panel was produced and moderated by ACE of Michigan’s Larry Kaplan.

Today, relationships are just as critical to adult nightclubs’ survival as cold beer and hot dancers. Without key strategic relationships with law enforcement, legislators, community organizations and influential partner business associations, a club is constantly vulnerable to having the rug pulled out from under it. The EXPO 2017 Government, Community and Partner Association Relationships Panel was a how-to for developing and maintaining these essential relationships.
After the 1999 formation of ACE of Michigan, that state’s pioneering adult nightclub association, Executive Director/co-founder Larry Kaplan and the association’s board rapidly realized the value of relationships and they have diligently cultivated and nurtured them for 18 years.

Kaplan, who moderated this panel, brought together three prominent panelists, Charles Wilson, Harvey Santana and Scott Ellis, whose relationships with his association have been key to its success.
Gov panel EXPO2017 135 1Charles Wilson retired as Commander and Chief of Staff for Detroit Police Chief James Craig. By working closely with ACE of Michigan’s leadership to support ACE workshops and develop “best practices” to improve the clubs’ community standing, Wilson created a standard for law enforcement and adult nightclub owner collaboration.

Former Michigan State Representative Harvey Santana, who was the most powerful Democrat in the Republican-controlled state legislature, controlled the state’s $53-billion budget. Santana, who has been unafraid to stand up for adult nightclubs, was known for his direct, bipartisan, passionate speeches and “across the aisle” approach. Santana is currently the tri-county deputy of the Michigan Governor’s Office of Urban Initiatives.
Scott Ellis is Executive Director of the Michigan Licensed Beverage Association (MLBA), the state’s influential association of bars and other liquor establishments and ACE of Michigan’s strategic partner association. Ellis, a veteran of the Lansing Police Department, has more than 15 years of hospitality industry consulting experience. Through Ellis’s efforts, the MLBA gives ACE’s legislative battles equal import to those of its less controversial members.
Santana started the session by declaring that if a club is not a member of their state adult club association, they need to join. He noted that if an individual club came to him to explain its employment, tax and economic impact, it would mean nothing to him. Why?
“Because a VP of a major Detroit corporation just visited to talk about a bill they love or hate,” explained Santana. “If you came in as an association, 25-30 clubs deep, with a fact sheet showing how many people those clubs employ; their economic impact and what they do philanthropically, now you’ve got my attention.”

Santana explained that, as a legislator, he was concerned about jobs and taxes, but equally concerned about another category where clubs are often lacking, philanthropy. He urged clubs to find their local business association and participate. Find the neighborhood community association, who is running it and contribute.
Santana underlined the importance of being in tune with your neighborhood.
“Who are the gangs, drug dealers, car thieves and B&E guys in your neighborhood? Do you know,” asked Santana? “You don’t know because you’re not involved in your neighborhood. You don’t know who is walking into your club on a daily basis, where that money is coming from and what else they’re bringing into your club?”

Gov panel EXPO2017 18 1Santana explained how you build relationships. He noted that he’s lived eight houses away from ACE board member Rob Katzman’s Toy Chest Bar in Detroit for 15 years and never once had an issue with the club.
Santana asked how many attendees know who the president and their governor are. Most people did. But when asked who their local school board president and city council member are, very few raised their hands.
“Donald Trump and your governor will never walk into your facility,” explained Santana. “Do you know who will? That school board president and city council person.”

Santana explained that they might come after you by introducing morality laws, which they believe will get them votes. To prevent this, you must proactively build relationships with them. You can start with a dinner invite.
“If they seem open minded, invite them to your club to see what you do,” suggested Santana. Many are business owners. Don’t you think they would appreciate what you go through on a daily basis?”
Santana explained that after that, they might request charitable donations. For example, 250 turkeys for a senior citizens’ home. With that donation, you’ve helped to ensure their reelection with those 250 votes. And if they’ll accept campaign contributions from you, make them.

“At the end of the day, they’ll remember who was and wasn’t there for them,” said Santana.
Santana also noted that the neighborhoods around many clubs are not that nice. Spend a day doing neighborhood cleanup efforts. And get the politician to help you organize the effort; he gets credit too.
Santana urged clubs to be responsive to neighborhood complaints. Fixing a problem immediately and making a contribution to a neighborhood group can save you tens of thousands of dollars in legal expenses and fines from unresolved issues that result in police complaints, tickets and possibly threats to your license.

Santana said each club needs two things, organized people and organized money. “Your clubs are competitive, but so is politics,” explained Santana.
Panelist Scott Ellis’ job as MLBA Executive Director, representing 1,600 liquor licensees and juice bars, is to pay attention to what is going on, legislatively on the state and sometimes the federal level.
When Ellis became MLBA director six years ago, he came from a background of 17 years as a police office and knew nothing about politics. But as a cop, he learned about relationship building.
“If we have a relationship, we can make things happen,” explained Ellis.

Gov panel EXPO2017 207 1Ellis and Kaplan built a relationship between the two associations with a goal of ensuring that all of Michigan’s adult nightclubs had representation. With Michigan’s large, conservative legislature, you might think adult nightclubs would be targeted. Through Ellis and Kaplan’s efforts, Michigan’s adult clubs are now considered legitimate small businesses by the legislators.
The MLBA hosts an annual state Lobby Day, where members visit legislators to explain their industry, its relevant issues and get to know the lawmakers. This year ACE of Michigan brought 17 members to the Lobby Day.
“This year, we actually had more representation from the adult industry than our regular bars,” explained Ellis. “The ACE attendees got to meet their legislators and discuss the issues.”
Ellis got a call three years ago from a state legislator planning to introduce legislation adding a $10 tax for every adult nightclub customer with the money going to human-trafficking training. Eliis contacted Kaplan, who rounded up ACE members. Thanks to the strong relationships the MLBA had cultivated, the bill never made it to a committee hearing.

“I was able to contact every senator and representative and say, ‘Time out,’” explained Ellis. “This industry is not the main problem with trafficking. It’s in restaurants, farming, it’s all over.” The bill’s sponsor told Ellis she went after adult nightclubs, ‘because they’re an easy target.’

That legislator now gets no MLBA support and actually alienated other legislators who were lobbied by ACE and MLBA members who said she’d put them in a bad spot.
“All of that happened because of the relationships we currently have with ACE of Michigan and its members. This a great example of the fact that there is definitely strength in numbers.”
Ellis noted that, unfortunately, many adult clubs and regular bars are not members of either ACE of Michigan or the MLBA. And, unfortunately, this is typical across the country.
“Find your local adult nightclub association and your liquor association and get on board,” suggested Ellis. “We fight minimum wage increases, detrimental liquor law changes and lots more. And if a club has an issue, we have a close relationship with the chairman of the Michigan Liquor Control Commission. I can text him and get an immediate answer. If Michigan ACE members have issues, Larry calls or texts me all the time and we figure it out.”
The MLBA also owns the national TAM server-training program, which satisfies liquor board training requirements in most states. An added incentive to ACE and MLBA membership is the substantial discount members receive on TAM training. Similar discounts are available to other club associations and multi-unit operators.

In part two of this panel report in the January issue, retired Detroit Police Commander Charles Wilson will talk about developing critical relationships with law enforcement and community associations and the attendees pose questions of Larry Kaplan and the three panelists.

Gov panel EXPO2017 4 1Larry Kaplan has for 16 years been the Legal Correspondent for ED Magazine. He is a broker in the sale and purchase of adult nightclubs and adult stores and the Executive Director of the ACE of Michigan adult nightclub state trade association. Contact Larry Kaplan at (313) 815-3311 or email larry@kaplanclubsales.com.
To join the MLBA, go to mlba.org or call (800) 292-2896. For information on TAM training, go to tamusa.org or call
(800) 292-2896.

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