Despite the best efforts of the government to help struggling clubs recover from the economic downturn and ensure a decent night’s service, many Manhattan watering holes are still more than $100,000 in debt.
A Reuters analysis of industry filings showed some bar and nightclubs operating in New York as recently as January owed millions of dollars in back taxes.
Owners of many nightclubs are reluctant to surrender control of their venues, which can be attractive investments and have become popular collateral for loan-fueled expansion. Many of the city’s nightclubs are also fighting high insurance and operating costs.
By some estimates, almost a quarter of New York nightclubs are said to be in violation of city zoning and occupancy laws.
Reuters wrote in March:
Nearly a quarter of the 6,450 Manhattan nightspots have tax liens against them, according to the city’s Finance Department. And the practice of clubs vacating their premises to convert it to residential use is common. More than 700 nightspots since 2012 have left their premises after falling behind in rent, according to the department.
Tax disputes, legal problems and technical arguments come up when New York’s celebrity-heavy nightclub scene, home to Meatpacking District establishments like Marquee and 1 Oak, and neighborhood havens like A-list parties at The Box and the Armory.
Across the country, the future of clubs, of specialty venues and of live music in general is in question, especially after singer Chris Cornell, of Soundgarden and Audioslave fame, was found dead last week in a Detroit hotel room.
Reuters noted that many clubs, especially those based in the U.S. South, have been plagued by bankruptcy and economic woes. The story also included stories of a casino-sponsored show and the rise of Baltimore’s new recording studios and, surprisingly, a Florida nightclub hosting a “Rainbow Coalition of RuPaul Drag Queens” Halloween party in the wake of high insurance costs.