Important note: Information in this article was accurate in 1985. The state of the art may have changed since the publication date.
The New York Times - November 9, 1985
Maurice Carroll
That status, making it exempt from most state corporation taxes, was routinely granted in 1976, state officials said, by the Secretary of State's office.
The bar - at 835 Washington Street, near Little West 12th Street in Greenwich Village - was depicted by city inspectors as a dark, black-painted establishment in which men were seen engaging in anal intercourse and fellatio, practices that state health officials say can spread the fatal disease known as AIDS, for acquired immune deficiency syndrome.
First Place Shut Down
The Mine Shaft was the first establishment closed under new state health rules designed to shut down places where dangerous sex occurs.
The listed owner of the premises, DAJ Real Estate Management Corporation, paid $9,500 a year in real-estate taxes, according to Paul A. Crotty, the city's Commissioner of Finance. He said the bills were sent to Gilbert Wallach, a lawyer, at 160 Broadway. Mr. Crotty said his office had been unable to reach Mr. Wallach.
The city is investigating whether the club paid commercial-rent and general-corporation taxes. Mr. Crotty said there was no evidence it had paid either.
In Albany, William Brown, a spokesman for the Secretary of State's office, said the not-for-profit application had been "routinely handled." There are approximately 110,000 nonprofit corporations on file, he said, and the department does not ordinarily check on the validity of their tax status unless there was a complaint or if an irregularity turns up in a random audit.
Had Been Raided in Past
Mr. Brown said the case has been referred to the Attorney General.
Karl Felsen, a spokesman for the State Taxation and Finance Department, said his department was investigating whether the Mine Shaft had paid three sets of taxes - sales tax on alcohol, withholding tax for employees and corporation tax on unrelated business income - that are required of not-for-profit social clubs with bars. Unrelated income includes alcohol sales of at least $500 a year. "For example," he said, "a V.F.W. club has a bar and sells to members. Even though it is nonprofit, it would have to file this return."
Mr. Felsen said a preliminary check showed that no sales tax had been paid under the Mine Shaft name or the realty company's name. He said he could not comment on the two other taxes.
John Vobis, enforcement director of the State Liquor Authority, said the Mine Shaft did not have a liquor license and had been raided "probably half a dozen times" for illegal liquor sales.
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