FALL RIVER — The 100 Cigar Club is promoted as an exclusive club offering gold or silver memberships at $1,000 or $500 to sip expensive liquor and smoke cigars on the top floor of the Towne House restaurant and bar complex. It’s also a nonprofit that’s exempt from paying real estate property taxes to the city.
On Wednesday, the city’s Licensing Board tabled the transfer of a liquor license for the 100 Cigar Club, after raising questions about the business’s nonprofit status.
“My concern is what is the Licensing Board’s duties and responsibilities [are] when it comes to this,” said Licensing Board Chairman Tim McCoy.
Paul Filogenio, the new majority owner of the Towne House, and Luis Bettencourt, the original principal owner, are seeking the liquor license transfer for the Portuguese American Society, the nonprofit doing business as the 100 Club corporation. The Towne House website states the club is named as such because it is limited to 100 members.
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Management shuffle at Towne House
According to the Board of Assessor’s office, a business with a nonprofit status is not required to pay real estate property taxes, but it could be obligated to pay personal property taxes.
A check last month showed the assessor’s office had no listing in its database for the 100 Cigar Club bar and hookah lounge.
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The three-member board voted to table the issue of transferring the cigar bar’s liquor license until next month’s meeting, pending advice from the city’s corporation counsel on they have authority to determine whether the business is operating as a nonprofit.
However, the board approved a change of management and board of directors for RLJ Group LLC, the for-profit corporation doing business as the Towne House restaurant.
Until last month, Jenny (Fernandes) Correia, the wife of former mayor Jasiel Correia II, held the title of manager of the Towne House and was listed in the Massachusetts corporation database as one of the directors of the Portuguese American Society. Her name has since been removed. Correia’s mother, Maria Correia, had also been a director of the Portuguese American Society; she also no longer holds that position.
According to reports confirmed by Filogenio, Jenny and Jasiel Correia had been working at the Towne House, but early in 2022 parted ways with the business, which is co-owned by Bettencourt, Jenny Correia’s stepfather, and Rosa Fernandes, her mother.
Jasiel Correia is currently serving a six-year federal prison sentence for fraud and government corruption.
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Is the cigar bar a nonprofit?
As McCoy noted during the licensing board meeting, the board granted the Portuguese American Society a liquor license for the cigar bar in 2020.
“It hasn’t necessarily been operating as a nonprofit,” said McCoy. “I am a little skeptical about making the same mistake twice.”
McCoy said according to the Portuguese American Society’s mission statement, which he accessed online, the nonprofit’s goal was to promote efforts like providing scholarships, but that until April 7 it had failed to file any annual reports since 2020.
The nonprofit’s mission statement, filed in August 2020, indicates the Portuguese American Society’s goals are to “encourage and perform cultural, civic and social activities to preserve and strengthen the traditional Portuguese-American heritage of its members…”
“We are working on that,” Bettencourt responded, saying the business made a contribution to the YMCA last year.
Attorney Arthur Frank, who represents the business owners, indicated he updated the annual reports recently.
McCoy said part of his concern was that, except for Jenny Correia, other board members — including Bettencourt and his wife, Rosa Fernandes — had been directors previously. “We have one person changing here, but there were other people who would technically [have been] responsible for pursuing the nonprofit’s mission,” said McCoy.
Attorney says COVID pandemic to blame for business being slow
Frank countered that the cigar bar opened in the middle of the COVID-19 pandemic.
“For the longest time, they weren’t even opened, so it’s very hard for any group, profit or nonprofit, to follow their mission if the state is shut down,” said Frank.
“It’s been slow,” said Bettencourt.
McCoy said he wasn’t suggesting that anything was “nefarious” with the business going forward, but said he wanted corporation counsel’s guidance whether the board had the authority to oppose the transfer.
Frank said that the board was treating his clients unfairly and that it wasn’t the scope of the board’s authority to “delve into the extent of their mission.”
“If the IRS thinks they’re not following their mission, then they’ll lose their tax-exempt status,” said Frank.
Jo C. Goode may be reached at email@example.com. Support local journalism and subscribe to The Herald News today!