- The Washington Times - Thursday, January 27, 2011

A controversial strip club in Northeast Washington is operating with a liquor license reserved in 2007 for a blighted warehouse property owned by a convicted drug kingpin who at the time was receiving city funds to renovate the site as a job-training center for ex-offenders, records show.

A neighborhood group has protested the Stadium Club to the D.C. Board of Zoning Adjustment, as reported last week by The Washington Times, claiming it is a sexually oriented business that should have been denied a permit. The club is co-owned by politically connected developer Keith Forney, a donor of unspecified amounts to D.C. Council member Harry Thomas Jr.’s nonprofit group Team Thomas. That organization is under investigation by the D.C. attorney general’s office.

Before Mr. Forney and a partner purchased the 13,000-square-foot warehouse space at 2127 Queens Chapel Road, it was the property of a family business managed by Cornell Jones, the District’s most notorious drug trafficking figure of the 1970s and 1980s and now executive director of the nonprofit group Miracle Hands. The group bills itself as a “resource access site for many who are underemployed, unemployed and/or those who are facing various socioeconomic plights.”

From 2004 to 2008, Miracle Hands received more than $4 million from the D.C. HIV/AIDS Administration. In 2008, the group was tainted by an FBI raid and complaints from city monitors and former clients that it had misused city funds.

Among the funds in question were $420,000 in two city housing grants to renovate the Queens Chapel warehouse space to use as the Miracle Hands‘ job-training center. The second grant was awarded in March 2007, two months before city records show that a Southeast Washington club owner announced plans to transfer his liquor license to the same address.

While Mr. Jones’ involvement with the Stadium Club raises questions and his nonprofit continues its work, he has declined to return calls and text messages seeking information. But Miracle Hands never completed the warehouse renovation.

‘The Ghost’

Mr. Jones is a D.C. gangster legend.

Immortalized in the Black Entertainment Television documentary series “American Gangster,” in which he was nicknamed “the Ghost,” Mr. Jones has credentials that include running an open-air drug market for PCP, heroin and cocaine on Hanover Place in Northwest Washington, a short drive from the U.S. Capitol, and importing drugs internationally for distribution throughout the Eastern United States.

Former Georgetown Hoyas basketball coach John Thompson Jr. also appears in the documentary to attest to Mr. Jones’ civic influence and his reputation as a Robin Hood figure in the District’s impoverished communities.

Federal court records show Mr. Jones owned several businesses and numerous residential properties in the District and Maryland used to launder money and to store and prepare narcotics for distribution. He used friends and family members to conceal his drug-dealing activities, the records show. In the investigation leading to his arrest and 1986 conviction for drug trafficking, detectives found $586,300 in cash in a safe-deposit box in the name of his father and mother.

A federal tax court slapped Mr. Jones with a $16.5 million judgment in 1990, saying he had failed to report income on $33 million in drug sales from 1985.

Mr. Jones was released from prison in 1995 after serving the low end of a nine- to 27-year sentence. The Internal Revenue Service declined to comment on the status of Mr. Jones’ tax debt.

In the late 1990s, Mr. Jones started Miracle Hands to help ex-offenders, troubled youths and homeless people. He housed the organization in a warehouse complex at 2127 Queens Chapel Road that he and his family purchased in 2002 for $1.2 million, according to D.C. land records.

The warehouse complex had multiple purposes. In 2000, Mr. Jones’ wife applied for a liquor license with the Alcoholic Beverage Control Board (ABC) for a nightclub called D.C. Tunnel next door to the space occupied by Miracle Hands. Marvin Turner, a director of Miracle Hands and the registered agent for W.F.J. LLC, the Jones family company that owned the warehouse complex, is listed on the application.

In 2003, when W.F.J. entered into a lease with D.C. Tunnel Inc., it was Mr. Jones who signed for both entities. Plagued by violence and investigations for record-keeping failures, D.C. Tunnel closed in 2008.

About the same time, when the HIV/AIDS Administration became the subject of an FBI investigation, Miracle Hands offices were raided. In a 2009 investigation by The Washington Post, city monitors and clients leveled accusations of improper management of city funds. HIV/AIDS housing administrator Debra Rowe, who approved most of the group’s funding, was fired from her job. She later went to work for a different nonprofit founded by Mr. Jones, The Post reported.

Though the FBI confirmed the investigation in 2009, the bureau would not comment for this article. However, since 2009, Miracle Hands has continued to receive city funds in excess of $1.5 million, according to figures released by the chief financial officer’s office, bringing the group’s total city funding since 2004 to more than $5.8 million.

Officials with the D.C. Department of Health and the HIV/AIDS Administration declined to comment.

Nearly a year since the Stadium Club opened as a high-end strip club with a premium steakhouse and private rooms at 2127 Queens Chapel Road, the websites for the Health Department and HIV/AIDS Administration still direct city residents seeking social services to Miracle Hands — at 2127 Queens Chapel Road.

The Stadium Club

Last year, Mr. Jones sold to the Stadium Club’s owners for $2.7 million the part of the warehouse complex housing Miracle Hands. But a review of ABC records and hearing transcripts and documents filed with the zoning board indicate that Mr. Jones had plans for 2127 Queens Chapel Road dating back to the time Miracle Hands was receiving city funds to renovate the property.

In May 2007, Ron Hunt, owner of Nexus Gold Club in Southeast Washington, placed his liquor license in what is known as “safekeeping” for transfer to 2127 Queens Chapel Road in anticipation of his club being displaced to make way for the construction of Nationals Park, ABC records show. Though the ABC board never published its decision, it approved the license transfer in October 2007.

Liquor licenses are valuable instruments, and the sale of Mr. Hunt’s license took time. He testified before the Alcoholic Beverage Regulation Administration (ABRA), which is under the authority of the ABC, in October 2008 that he entertained “cash on the table” bids on the license from investors in New York, Philadelphia and Florida. But he said he decided to sell to a local investor.

“I don’t want to call names on the record, because some of them were not desirable figures,” Mr. Hunt said, according to a transcript of the ABRA hearing. Mr. Hunt assured the board that he would discourage any buyer of his club’s license from allowing “lap dancing” at a club. He said the activity, prohibited in the District, “breeds prostitution.”

In discussing the impact of a strip club on the neighborhood, ABRA Chairman Peter B. Feather noted that the local investor had “a lot of support from Mr. Jones,” who was identified by the prospective buyer of the liquor license as “just the landlord.”

Though the sale of the license fell through, another buyer appeared in May 2009. Again, ABC records show that business negotiations with Mr. Jones were well under way by the time the board heard the matter.

Baltimore, D.C. developers unite

On May 20, 2009, Baltimore businessman James “Tru” Redding appeared before the ABC on behalf of the Stadium Group LLC, a partnership he had formed in March 2009 with Mr. Forney, the D.C. and Prince George’s County developer. Mr. Forney is a substantial political donor to Democratic Party causes and candidates, including former D.C. Mayor Adrian M. Fenty and Ward 5 Democrat Harry Thomas, now head of the council’s Economic Development Committee.

The business profile for Mr. Redding’s Baltimore-area company, JTR Inc., says it specializes in commercial painting and wall covering. A separate Baltimore company, NLP Enterprises Inc., which also specializes in painting and decorating, lists him as a vice president in charge of field operations. Media reports have described Mr. Redding as a “Baltimore construction mogul” involved in various D.C.-area nightclub and restaurant ventures.

At the 2009 hearing, Mr. Redding’s attorney, Stephen O’Brien, told the ABC that his client already had negotiated a lease with Mr. Jones at 2127 Queens Chapel Road and an agreement with Mr. Hunt to purchase the Nexus Gold Club liquor license. Mr. Redding, whose testimony established that negotiations with Mr. Jones had been under way since about December 2008, pitched the Stadium Club to the board as a “high-end destination spot” with a “Four-Star” restaurant.

“I’m not holding back anything,” Mr. Redding said, adding that he planned to hire a New York architect and begin a multimillion-dollar renovation of what he called “just an old brick warehouse” that “had some trouble.” During a later hearing, Mr. Forney described the warehouse as “a hole that was gutted, essentially nothing really there.”

Mr. Feather, the ABC chairman, urged Mr. Redding to reach out to neighborhood groups to confront potential resistance to the Stadium Club. “They’ll make up their own stories if you don’t set the record straight to begin with in terms of your plans,” Mr. Feather said.

But Ward 5 Improvement Association President Don Padou, whose group is opposed to the club, said association members and others had no indication that a strip club was coming to the area until it was about to open the subsequent year.

After ensuring the board that strippers would be prohibited from soliciting drinks — “Never. Will not happen in my establishment” — and that the club would strictly enforce city laws that prohibit nude dancers within three feet of customers, Mr. Redding got his approval.

“Look forward to your visits with us in the future, not that they’ll be professional,” Mr. Feather said, according to the transcript.

“You’ll be at the grand opening?” Mr. Redding replied just before the hearing transcript was cut off.

Tuesday night in December

The Stadium Club is more than a strip club. On a Tuesday night in December, a Washington Times reporter ordered a New York strip steak in a quiet, well-lit and well-appointed dining room before entering a darker bar area featuring cocktail tables, an elevated main stage, a couple of smaller stages closer to the floor and various VIP sections. The room also included a mezzanine of one-way-glass-enclosed rooms where staff offered a private experience with a dancer for $700 to $1,000 an hour.

Mr. Redding insists that private-room rates are capped at $600 an hour and says he plans to tear out most of them to create larger party rooms.

Nude dancing took place on the cocktail tabletops at eye level in proximity to patrons, who were more than encouraged to buy drinks for the strippers. One dancer who identified herself as “Demi” led a reporter to a private area of the club, insisted on giving out her phone number and encouraged a rendezvous at a downtown condominium. She then asked for money so she could order herself a drink from the bar.

Mr. Redding said the dancers, who “come and go” and are hired as contractors, are free to associate with customers outside the club as they choose. “They’re just regular stripper girls, not prostitutes,” he said in an interview Monday.

In a special VIP area just above the main stage and overlooking the bar stood Mr. Jones, flanked by what appeared to be club personnel. He was closely monitoring the onstage activity.

While Mr. Redding and Mr. Forney deny that Mr. Jones plays an active role with the club, Mr. Jones hosts the entertainment on Sunday and Tuesday nights, according to multiple patrons. Mr. Redding acknowledged that Mr. Jones is a regular two nights a week and has a substantial following. “If Cornell wants to bring in 200 people, then that’s great,” Mr. Redding said. “But that doesn’t mean he gets anything for it, except maybe free admission.”