NORFOLK, Va. (WAVY) — Longtime Norfolk restaurant Scotty Quixx no longer has its permit.

In a 5-2-1 vote during a city council meeting Tuesday, Norfolk leaders decided to revoke the restaurant’s Conditional Use Permit (CUP). Council members Danica Royster and Paul Riddick voted against the revocation while Norfolk Vice Mayor Martin Thomas abstained from voting.

This is the fourth business in Norfolk to lose its right to operate as a nightclub in the last year. The other businesses are Legacy Lounge, Culture Lounge, which are both located downtown, and Origami Asian Bistro, near Military Circle. The owners of Legacy Lounge are petitioning for an appeal.

Without a permit, the restaurant can no longer serve alcohol, have live entertainment or be open until 2 a.m.

In the revocation notice previously sent to Scotty Quixx owner Al Ragas, Norfolk City Attorney Bernard Pishko informed him that his club faced being shut down because the city believes his business violated its Special Exception Permit – now known as a Conditional Use Permit (CUP).

The city alleges that Scotty Quixx is in violation of its permit as its sales reports to the Virginia Alcoholic Beverage Control Authority (ABC) do not match up with its meal tax payments to the Commissioner of the Revenue.

“There have been no violations of ABC regulations, no meals tax violations, no violations of any fire codes or any city code of any type intending any rules or regulations intending to promote safety,” said Richard Ottinger, attorney for Scotty Quixx.

Under Virginia law, a business that holds an ABC mixed-beverage license must comply with a 45% to 55% ratio. That means food and non-alcoholic beverages must make up 45% of a business’s total sales. Businesses must submit a mixed-beverage annual review, or MBAR, to ensure they’re in compliance.

The MBAR for Scotty Quixx meets the 45% to 55% requirement, however, the city’s meals tax report from Scotty Quixx doesn’t match that number and is lower.

Assistant City Attorney Katherine Taylor explained the tax records were from October 2019 through September 2021.

“These are business owners of 18 years that don’t have their own records of what they’ve reported to MBAR or the commissioner of revenue. That they’re asking for a FOIA request from the city to get those records. That is just one of the many distractions you’ve heard from the business tonight,” Taylor said to council Tuesday night. “In reviewing this special exception permit holder, the city has found this discrepancy.”

Scotty Quixx ownership disputes this.

“We did not underreport our meals tax to the city of Norfolk, at all and we didn’t get documentation until a few days before the hearing with physical numbers to even show what discrepancies it could have been. There was zero time for preparation,” said co-owner Chris Johnson.

Owner Al Ragas told 10 On Your Side he has called the city every day since receiving the revocation letter.

“Tell us what we did. If there’s a fine, we’ll pay it. Want to know how many calls I got back? Zero,” Ragas explained, “We are doing exactly what is required by the city, by the state. We meet the requirements so that is why we are a little bit dumbfounded. Nobody can tell us exactly what we did wrong on that form.”

Johnson plans to fight back.

“I don’t think this is the end of it. We’re not going to give up,” Johnson stated.

Ragas is prepared to pursue legal action against the city.

“We feel we’re a vital part in this community,” Ragas said.

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