Following a turbulent week of announcements, The Pearl has fallen into a state of legal and financial lockdown. This week, the City of Denver officially seized the property formerly known as the Mercury Cafe building for a year. The seizure comes after a whirlwind of controversy involving a massive crowdfunding effort, the sudden dissolution of the business’s legal entity, and a staggering tax debt that has now forced the city to change the locks.
Passersby and patrons of the historic venue were met with a grim sight on Wednesday: official tax seizure notices taped to the doors and brand-new locks preventing entry. According to official documents, the business owes a combined total of over $56,000. One document specifies a debt of $53,869, while a second lists $2,386.43, primarily stemming from unpaid sales and occupational privilege taxes.
“The City and County of Denver placed a distraint warrant on this business earlier today,” Laura Swartz, Communications Director for the Denver Department of Finance, tells Westword. “The business owes over $56,000 in unpaid taxes, the vast majority of which are sales taxes. Sales taxes charged to customers and collected by businesses must be remitted to the city, as these are the taxes that pay for critical public services.”
The seizure marks a dramatic turn for a business that, only days ago, appeared to have a groundswell of community support. Over the weekend, supporters of The Pearl—which served as a vital space for Denver’s lesbian community—raised more than $83,000 via GoFundMe to keep the doors open. However, the optimism was short-lived. By April 14, the business dissolved its LLC and began refunding the donations, leaving the future of the venue in doubt.
Internal strife among the ownership has also spilled into the public eye. As the financial reality of the seizure set in, co-owner Dom Garcia addressed the allegations regarding the mismanagement of funds. “Other owners blamed me for back taxes, but the taxes were never my responsibility,” Garcia says. “I have proof of that in our operating agreement, but they blamed me.”
While building owner Danny Newman had initially expressed a desire to keep the space open for the various poets, dancers, and musicians who call the “Merc” home, the city’s intervention has brought all activity to a halt. Prior to the seizure, co-owner Ashlee Cassity had expressed hope for a final celebration, telling reporters, “We spoke with our liquor license attorney, and we’ll be operating for one farewell party where all of the drinks and door proceeds will be given to staff.” With the city now in possession of the property and the doors barred, such a farewell remains unlikely. For now, the “poets, dancers, musicians, tarot readers and astrologers” of Denver find themselves locked out of their sanctuary.
Photo courtesy of social media
