Trop, Inc. and the JEG Family Trust have operated the Pink Pony entertainment club as a restaurant with alcohol consumption and adult nude dancing under DeKalb County licenses since November, 1990. In June 2001, after taking part in litigation against DeKalb County, Pink Pony entered into a Settlement and Release Agreement with DeKalb County. Pursuant to this settlement, Pink Pony dismissed pending damages actions against DeKalb County in exchange for the right to continue its operations, as it had always done, for a term of eight years. In addition, Pink Pony agreed to pay an increased, graduated licensing fee. In May 2007, Pink Pony entered into the First Amended and Extended Settlement and Release Agreement, which extended the original settlement agreement for an additional fifteen years.
Approximately five years later, well before the termination of the DeKalb settlement agreement, the City of Brookhaven was incorporated on December 17, 2012, and, as a result, Pink Pony’s location became part of the new municipality. At that time, DeKalb County ordinances, including those on alcohol and adult businesses, continued to apply in Brookhaven. Later, however, Brookhaven began a consideration of sexually-oriented businesses, and, on January 15, 2013, it approved its own sexually-oriented business Code. The sexually-oriented business Code’s enactment was “based on evidence of the adverse secondary effects of adult uses presented in hearings and in reports made available to the City Council,” including judicial decisions, studies, reports, and affidavits. Of particular importance to Pink Pony, the sexually-oriented business ordinance, in conjunction with Brookhaven’s Alcohol Code,1 prohibits the sale of alcohol in sexually-oriented businesses and allows only semi-nudity g-strings and pasties, not full nudity.2
