Finance

It’s Closing Time for Toronto’s Strip Clubs

The slow death of the “gentlemen’s club” is another sign of the city’s high land prices and booming condo construction.

Zanzibar Tavern is in a great location—for condo developers.

Photographer: Daniel Ehrenworth

Condos are killing the Toronto strip club. In a city that once had more than 60 bars with nude dancers, only a dozen remain, the rest replaced by condominiums, restaurants, and housewares stores. Demand for homes downtown and for the retailers that serve them is driving land prices to records, tempting owners of the clubs, most of which are family-run, to sell at a time when business is slowing.

“Sometimes I feel like the last living dinosaur along Yonge Street,” says Allen Cooper, the second-generation owner of the famous—or infamous—Zanzibar Tavern. The former divorce lawyer says he has been approached by at least 30 suitors for his property in the past few years but is holding out for a “blow my socks off” offer. “I don’t know how many condos we’re going to get, but it seems like just a wall” of them, Cooper says. He wouldn’t disclose the price he’d sell at, but land deals nearby give a hint of what’s possible. Remington’s Men of Steel, a male dance club behind a heavy door, sold to KingSett Capital Inc., which last year flipped it to Cresford Developments as part of a bigger portfolio on that block that went for about C$160 million ($125 million), according to real estate data supplier Altus Group. That club is closing next year, to be replaced by a 98-story condo.

It’s a similar story in other North American cities, where the demand for “exotic dancers” is cooling amid the rise of free porn and live video chats on the internet. In Toronto, massage parlors have proliferated elsewhere in the city, while arduous rezoning regulations and a rule restricting new strip-club licenses mean that once a joint shutters its doors, it isn’t likely to be replaced.

City Councillor Michael Thompson is glad to see the clubs go. “In 2017, I don’t think that women need to be involved in these kinds of facilities as their only option,” says Thompson, chairman of the city’s economic development committee. “I don’t see them as viable businesses,” he says. (He visited one himself “many, many, many years” ago.) With Toronto’s sky-high real estate values, strip clubs “don’t offer the highest and best use for landlords and even some of the owners,” he says. Overall home prices in the city remain high despite easing in recent months; condo prices are up 18 percent from a year ago.

The fading of the strip-club era can be seen in a five-block area along Yonge Street, near Toronto’s counterpart to Times Square, Yonge-Dundas Square. It was once dubbed Sin Strip for its neon-clad bars, sex shops, and movie theaters. Today there are about 20 development applications for condos and commercial buildings on the stretch. Club owners say the client mix has changed, even since the ’90s, with more women who come in groups or with partners. The traditional visitors remain: financial sector workers bringing clients or friends, mostly male, after a game. Cooper’s Zanzibar, with its three-story flashing signs, is one of the last remnants. The adult theater and a sex shop next door called it quits long ago.

Farther north, an entire city block is a construction site as two condo towers and some retail space replace a strip of colorful and creaky buildings that once offered body piercing and pole-dancing shoes. “We target a very specific market, mostly men. We’re not a shopping destination, so more people doesn’t mean a lot more business,” says Bill Greer, general manager and three-decade veteran of the Brass Rail Tavern, a two-story club in the area. “I don’t think we’ll be around in 10 years’ time.” Just outside the Brass Rail’s doors, a 75-story residential tower opened this year on a piece of land that cost C$53 million. An 80-story luxury tower is under construction following a C$225 million deal for less than 1 acre, according to data from Altus.

Adult-entertainment sites in Toronto have made way for a luxury townhouse complex, churches, a Sikh temple, a mosque, charities, and a furniture store visited by one of the Property Brothers of reality-TV fame. One midtown club, Cheaters Tavern, was renamed Mystique Lounge, then became a liquor store, and then a Kitchen Stuff Plus.

Some owners say they aren’t going anywhere. “What am I going to do, sit at home and die?” asks Spiro Koumoudouros, owner of House of Lancaster. Koumoudouros sold his other strip club recently, three decades after a successful legal campaign he and his brother waged to allow fully nude dancers. Others, like Cooper, are willing to sell at the right price. The owner of Filmores Gentleman’s Club, who is also a real estate investor, is open to proposals. And Caddy’s, in the city’s east end, is part of a land deal being marketed now. Toronto’s dirty dozen may soon be whittled down to two or three.

    BOTTOM LINE - Toronto’s infamous strip clubs sit on lots now coveted by the developers of luxury townhouses and furniture stores.
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