Andrew Diamond, a real-estate investor who's lived next door since 2007, has been outspoken about what he considers chronic over-serving at the club and thumping bass emanating into his home. In an interview, he said Montoya's selective-enforcement argument lacks merit, but added that, in the past year, club management has grown more responsive to his complaints. "I think the great efforts of the police and the Entertainment Commission have made Hue perform better as neighbors," he said.

In a statement to KQED, city attorney spokesperson John Coté called the racial discrimination suit baseless. “For many years, community members have voiced concerns about overly intoxicated patrons from this establishment creating problems in the neighborhood, including violent fights,” he said, adding that the club “doesn’t have the right to create an unsafe environment.”

Yet a July 2018 ABC Appeals Board decision [PDF] supports Montoya’s view that police have unfairly targeted Hue, laying all of the problems of a bacchanalian block on the doorstep of one of the city’s few remaining hip-hop clubs. Evidence presented at the hearing, the board wrote, established that Hue was “singled out for unique surveillance and enforcement” and blamed for “more than its fair share” of incidents on the block, and that the treatment resulted from “the desire of [former Central Station Captain David Lazar] and the SFPD to reduce African-American patronage of [Hue] by eliminating hip-hop music.”

That decision, which is being appealed, comes after the appeals board dismissed more than 90 percent of 52 total police reports of violence and crime at Hue, deeming them insubstantial as evidence. But it’s of little relief to Montoya, whose entertainment hours were limited last June to midnight, instead of 2am, by the Entertainment Commission. Montoya objects to the commission continuing to act on police reports judged unreliable and of “discriminatory design” in the ABC case, and his suit seeks to recover the hundreds of thousands he’s spent defending his business.

“At this point I’m all in,” Montoya said, likening the showdown to poker. “I can’t fold.”

On the 400 Block

On a recent Friday night, Montoya was anticipating a crowd of 150 for Rumba Latina, a Latin music night. Seven security guards were working, ready to use ID scanners and metal-detecting wands. Attendees at Hue are subject to pat-downs and searches; ins-and-outs aren’t allowed. Throughout events, Montoya cleans and takes pictures of the next-door alley, lest trash be blamed on Hue patrons, and he meters sound every hour, even though the speakers are limited to commission-approved levels.



The 36-year-old Redwood City native sat on a white leather couch in the back of the 400-capacity, two-room club just before doors opened. Montoya worked in finance before launching Hue in 2008 under the name Atmosphere, and cultivated a fleet of resident DJs while also hosting after-parties for high-profile hip-hop and R&B artists such as G-Eazy and Miguel. (The club rebranded as Hue in 2015.)

“When I’m here now, I’m mostly just making sure we’re complying with all of the conditions,” Montoya said. “And feeling anxious about the cops coming again.”

Montoya operated without enforcement actions for six years. But once David Lazar took command at Central Station in 2014, the suit alleges, he directed officers to park outside the club and blame it for any incident nearby. That would explain why some noise complaints use Hue’s address, but show the names of other clubs or call the source "unknown." The ABC appeals board concluded that the club’s address, 447 Broadway, was used for "incidents that occurred anywhere on the street.”

Outside Hue on the night of Rumba Latina, street behavior matched North Beach's reputation as one of the last outposts of the Barbary Coast. Patrons in the smoking patio of a club next door passed drinks to their friends in line. A bar across the street advertised an event called “Beer Olympics.” Tourists leaving a hostel wondered aloud in thick accents about scoring drugs while strip-club bouncers pitched lap dances to passersby. It was just shy of 10pm.

But businesses leaders have launched a push to make Broadway more family-friendly. Even Joe Carouba, who runs most of the strip clubs in North Beach, has said he wants no additional dance or strip clubs on Broadway. He’s vice president of the Top of Broadway Community Benefit District, a quasi-public entity funded by levies on property owners; its board includes Hue competitors such as the owner of Monroe, a nightclub next door. Last July, the CBD complained to the Entertainment Commission about Hue’s “detrimental presence."

All of which leads to Montoya's claim that Hue has been held to a higher standard than his neighbors. In 2013, for example, local and federal investigators said an employee of Carouba operation Centerfolds detonated a bomb in the doorway of Broadway Studios, which is co-owned by outspoken Hue critics Karl Pleskot and Francesca Valdez. The incident garnered no Entertainment Commission attention. Likewise, a recent investigation of fraud at strip clubs hasn’t stirred the nightlife regulators, either.

Montoya said Hue has been singled out because the club doesn't conform to the tempered vision of Broadway shared by local business interests as well as the police. He recalled how Central Station captain Lazar repeatedly told him that Hue attracts “the wrong crowd—a crowd we don’t want,” a comment corroborated in the ABC hearing by former CBD head Benjamin Horne. (Lazar, who’s since been promoted to commander of the department’s Community Engagement Division, didn’t respond to an interview request.)

The suit describes the campaign in the context of black people accounting for 6 percent of the city’s population, yet 42 percent of its arrests. In the Broadway area, SFPD data show, more than half of the people arrested are black. Montoya called it cultural repression, predicting that clubs catering to people of color with hip-hop programming will disappear from San Francisco. “At first Lazar was blunt about not liking our clientele,” he said.

“But I think he read my body language and saw I was uncomfortable.” Montoya continued, “So then he started adding, ‘...but I can’t tell you what kind of music to play.’”

'The Last Straw'

SFPD cited the gun-waving story from Dec. 13, 2014 often: Lazar referenced it in a letter to the CBD [PDF] and in remarks to the Entertainment Commission. Officer David Falzon, who’s now the commission’s law-enforcement representative, included it weeks later in a letter urging commission director Jocelyn Kane to suspend Hue’s entertainment permit [PDF].

At the next commission hearing, Falzon emphasized that SFPD was committed to closing the club. “Our plan to is to come before you in the very near future with revocation,” he said.

The exchange troubled Jordan Pauley, who was then a commission inspector tasked with mediating disputes and investigating violations. Cousins of his were in the club that night, and they didn’t recall brawls or guns. Nor did anything of the sort appear on security footage. Pauley said he pointed out the discrepancy to commissioners in a memo, but felt ignored. It wasn’t the first time he thought SFPD provided dubious evidence to discipline a hip-hop club.



Pauley eventually resigned from the Entertainment Commission in protest. “The Hue situation was the last straw,” he said.

In June 2017, with the ABC charges sputtering, SFPD asked the Entertainment Commission to limit Hue’s entertainment hours to midnight. Steve Matthias, the other officer named in the suit, provided documentation of 65 Hue-related incidents [PDF]. (Matthias didn’t respond to an interview request, but he’s dismissed the discrimination accusations as a “creative defense” in public hearings.) Supervisor Aaron Peskin appeared before the commission for the first time in his career to advocate revoking Hue’s entertainment permit outright.

But like the 47 charges dismissed in the ABC case, the documentation mostly reflects computer-aided dispatch (CAD) reports, which convey only cursory details of a complaint or crime observed. The 65 incidents include noise, public intoxication and street fights, but some of the officers’ descriptions seem to undermine their own case: One entry logging a February 2017 fight reads, “DOES NOT SPECIFY SPECIFICALLY HUE RELATED.”

Pauley said commissioners openly questioned the CAD reports' credibility in private, with good reason: By the time of the June hearing, ABC authorities had criticized officers’ intentions and tactics in targeting the club, and Pauley himself had documented discrepancies. “Everyone knew the CADs were bogus,” he said. When commissioners nevertheless acted on the reports, Pauley said, they bowed to political pressure.

(Maggie Weiland, who replaced Kane as commission director last year, declined to answer questions about the credibility of the reports informing commission decisions on Hue. “The EC holds its own proceedings and receives its own evidence,” she said.)

The Entertainment Commission relaxed Hue’s restrictions earlier this year, allowing live entertainment until 1am on Fridays and 2am on Saturdays. On Sept. 18, Montoya appeared before the commission again and asked for them to be lifted completely. The hearing resembled earlier ones: Neighbors, including a representative of the CBD, assessed Hue’s noise and security. Pleskot, the Broadway Studios co-owner, turned away from the dais and pointed at Montoya to call him a liar during public comment.

Then Matthias, the commission's SFPD liaison, flagged one violent incident stemming from the club in the six months prior, a “major Hue-related fight” on May 27. Hue club-goers had started a brawl in a liquor store across the street, even punching a bystander in the back of the head, security footage showed, and then someone fired a handgun into the air on the sidewalk outside before running away. After the gunfire, Montoya had called the police himself.

Though Matthias said that “Hue patrons were most definitely the catalyst,” he emphasized that he wasn’t sure if the gunman had been at Hue. The commission voted to extend the club's entertainment hours slightly, to 1am on Wednesdays and Thursdays.

Montoya said he feels vindicated by the July ABC decision that SFPD unfairly targeted Hue, and he hopes the civil-rights suit resolves similarly. “It showed that, in a legal forum, we can prove the lies,” he said.

But it doesn’t help the business’ mounting debt, and as long as the ABC case is tied up in appeals, he’s not allowed to sell the club’s liquor license, its most valuable asset.

“There’s been times my wife and I have just wanted to move on, but we can’t even sell the company right now,” he said. “It’s just become more and more clear that, if the cops can’t get us at the commission or through ABC, they can try to drive us to bankruptcy.”