CLUBS FEEL STING OF POLICE RAIDS

A trip to the Statue of Liberty, a spin through the Metropolitan
Museum of Art, a Broadway show and a nightcap or three at one of New
York's drinking establishments. For locals and out-of-towners alike,
the city's bounty of 1,200 bars, lounges and dance clubs is an
essential lure of city life. It is also a vital cog in the New York
economy, generating an annual $9.7 billion in revenue and employing
19,000 people, according to the New York Nightlife Association.

But a series of police raids one night late last month in Manhattan,
which led to the shuttering of 5 establishments and the arrest of 20
people on drug charges, left many bar and club owners feeling under siege.

The police raids, which brought the number of temporary closings in
the past year and a half to 200, come on the heels of the smoking
ban, increased antipathy from neighborhood groups and a bill in the
State Assembly that could severely limit new liquor licenses,
especially in Manhattan. And on the Lower East Side and in SoHo, even
new high-end restaurants are finding it difficult to obtain liquor
licenses because of the well-organized opposition of local residents.

"The feeling of people in the industry is that there is a huge 'Not
Welcome' sign being posted by government," said Robert Bookman, a
lobbyist for the nightlife association, a group of bars, clubs and
lounges. "The city doesn't realize it, but they're killing the goose
that laid the golden egg."

Law enforcement officials insisted they are not waging a war on
clubs. Instead, they said the recent raids, which involved dozens of
officers swarming into clubs, bars and even a gym on the night of
March 31, were prompted by complaints from local residents.

"We expect people to keep illegal activity out of their premises,"
said Paul J. Browne, the Police Department's deputy commissioner for
public information. "The police have an obligation to stop it if the
club operators will not or cannot."

Most of the businesses that were raided were allowed to reopen,
according to Mr. Browne, after agreeing to adopt more stringent
security measures and pay fines of $1,000 to $15,000.

While generally not denying the allegations, owners and managers said
the truth is far less alarming. Except in the case of two bartenders
accused of selling Ecstasy at Avalon, on West 20th Street, they said
none of those arrested were employees of the clubs. All the drug
arrests, which the police said took place over a 10-month period
leading up to the closings, involved small amounts of drugs. Several
of those arrested were not selling in the clubs but were apprehended
during the course of the investigation, Mr. Browne said.

The owners of some of New York City's large clubs, like Avalon,
Spirit and Speed, said they already spend thousands of dollars a week
on security. Some of the security measures include searches of
patrons and the use of undercover monitors who dress like clubgoers
and rove the dance floor randomly asking patrons where they might
find some Ecstasy.

John Blair, a promoter at Spirit, on West 27th Street, said he spends
about $3,000 a week on monitors who watch for illegal activity among
the club's staff. Three of the six arrests that led to a nine-day
shutdown of the club were for patrons smoking marijuana, according to
court filings, and the other three were for patrons found with small
quantities of Ecstasy or cocaine. In addition to a $10,000 fine, Mr.
Blair said the weeklong closing resulted in $275,000 in lost revenue.

"We're not exactly a drug den," Mr. Blair said. "We're really doing
our best to stop drugs from coming in, but if a woman wants to sneak
a pill in her bra, there's not much we can do about it."

Others suggested that the police were being overzealous. "If you're
really determined, you can buy drugs at McDonald's or at a
schoolyard," said Brian Landeche, the owner of Splash, a gay bar on
West 17th Street where the police say a patron sold cocaine to an
undercover officer.

Mr. Landeche, whose business was fined $10,000 and was ordered closed
for nearly two weeks, said it was the first time his bar had been
implicated in any drug activity. "The amount of money this is costing
me is hurtful, but the stain on reputation and my personal prestige
is worse," he said.

Expecting a large nightclub with thousands of patrons to be
drug-free, many owners said, is unrealistic and unfair. "Should
George Steinbrenner be penalized if drugs are found at Yankee
Stadium?" asked Donald Bernstein, a lawyer who represents Avalon.
"Could you imagine the police closing down Madison Square Garden if
drugs were found? Of course not. It's just easier to go after clubs."

Although city officials said they do not go out of their way to
penalize the nightlife industry, club owners questioned why raids and
court-ordered closings often occur on Friday nights.

David Rabin, whose lounge, Lotus, on West 14th Street, was shut down
last year at the beginning of the Memorial Day weekend for serving
under-age patrons, said many owners suspect the timing is designed to
inflict maximum damage.

"I can't tell you how frustrated many of my colleagues feel," said
Mr. Rabin, who is also the president of the nightlife association.

Mr. Browne, the Police Department spokesman, said the timing of the
raids had to do with the availability of police manpower and the fact
that many clubs get their largest crowds on weekends. "We strike when
the iron is hot," he said.

Many business owners said they take issue with the city's 311 hot
line, which has an anonymous complaint system that counts the number
of calls against an establishment but does not tell officials if
calls are coming from, say, 100 different residents or just one
disgruntled neighbor.

But for those who live in neighborhoods awash in bars, there is a war
on, and any tactic for fighting back is fair game.

For several years, Ariel Palitz, the owner of Sutra Lounge on First
Avenue and First Street, has been battling with two nearby neighbors
who are unhappy about her bar's loud music. She spent $20,000 on
soundproofing, but she said the neighbors continue to call 311,
sometimes up to a dozen times a night, leading to almost daily visits
from the police. The inspections and fines keep coming, she said,
including a summons last month for having her ice scoopers improperly stored.

"I try hard to run a business, I work day and night to keep this
going, but I feel like I'm being criminalized," she said. "Sometimes
I feel like I own a brothel rather than just a neighborhood bar."

Sean Sweeney, whose organization, the SoHo Alliance, has been trying
to stanch the issuing of new liquor licenses downtown, says he
recently spent more than $10,000 to move his bedroom to the rear of
his Green Street apartment. Several of his neighbors, he said, have
given up entirely and moved away.

"Mardi Gras lasts 12 days. Down here, it lasts 365 days a year," said
Mr. Sweeney, who has lived in the neighborhood for decades. "It's
become party central for the entire metropolitan area. These clubs
and bars are ruining people's lives, and they've got to be stopped."