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Salt Lake City officials may now regret the decision, but they were right to allow stripping at the downtown Dead Goat - aka Crazy Goat - Saloon, a 3rd District judge ruled Wednesday.

The LDS Church certainly regrets the city’s decision and had sued over it. But Judge Denise Lindberg sided against the church on two major claims.

One of the saloon’s attorneys declared the semi-nude strippers are here to stay. "This is a major victory, and we’re going to be there a while," Andrew McCullough said. "I intend to go down tonight [Wednesday night] and suggest to everybody we have a big party."

But the church’s fight is not over. It maintains the saloon, at 165 S. West Temple, is a public and private nuisance. Those arguments are expected to go before a jury. The church’s attorney declined to comment.

In her 29-page ruling, Lindberg deals with unsexy issues surrounding the sexually oriented business (SOB). The church argued the city erred in granting the SOB license in 2003 because the saloon, while set back from the street, is too close to West Temple. The city forbids SOBs from locating within 165 feet of such "gateway corridors," presumably to prevent passers-by from seeing sights associated with a strip club.

But noting the dancing takes place underground, Lindberg scoffed at the argument. Neither the church nor the city has "suggested how SOB activities occurring in an underground portion of the establishment . . . would manifest themselves in ways that would affect the gateway corridor. . . . [The] court cannot conclude that the saloon’s occupancy of a windowless, below-ground premises creates or exacerbates any of the problems that the 165 [foot] setback requirement was designed to mitigate."

The church also argued the city shouldn’t have granted the license because the City Council had passed a temporary ordinance barring downtown SOBs before the saloon received its license. The church said that ordinance should have applied to the Dead Goat. But the temporary regulation - which later became permanent - was passed in response to the Dead Goat’s application. Lindberg said the city attorney was right to decide in 2003 that the saloon deserved the license despite the new rule.

Salt Lake City has played an ambiguous role in the court case. The church sued the city, but city officials, including Mayor Rocky Anderson, oppose the strip club. Lindberg has pointed out the strangeness of a city attorney (the defendant) sitting with church attorneys (the plaintiff) during oral arguments. She noted in her ruling that the city has done little to defend its decisions to grant the SOB license. In fact, the city now argues the SOB license should be revoked.

On the nuisance claims, the LDS Church fears the saloon will interfere with its redevelopment of its 20 acres of property to the north. It plans to revamp the Crossroads Plaza and ZCMI Center malls.

But McCullough predicts the church will lose on those counts as well. "If we are, in fact, [operating] within the city ordinances, the next logical step is we’re not a nuisance. I’ll give you a 98 percent [chance] this is over and we win."

That doesn’t mean the club will remain in place. The owners of the building in which the saloon leases space have put it up for sale. The nonprofit Open Mind Foundation closed on the property last week, though the sale is not final.

Bill Martin, who helps run the Crazy Goat, said dancing will continue under the sale unless the new owners - who cannot allow alcohol sales on their property according to their bylaws - buy them out. "If they’re not happy, they’re going to have to negotiate us out of there," Martin said.