Larry Flynt's Hustler Hollywood sues the City of Fresno

FRESNO, Calif. (KFSN) -- The old Silver Dollar Hofbrau, once a Fresno landmark, sits vacant and blighted. Now it's the centerpiece of a lawsuit which could be a fight for the City of Fresno.

"It's completely gutted, open inside, open framing, ready for a tenant improvement," said Mike Webb, MAKK Construction.

In 2015, the former restaurant went out of business. Not long after Larry Flynt's Hustler Hollywood showed interest in opening an adult novelty store.

Webb was in charge of gutting the building and says even in the early stages the city put the project on hold.

"It was our fifth day on the job and they had come in and red tagged it-- no work could be done."

Their renovation work is one part of a 39 page complaint, in which Hustler Hollywood alleges the city violated their first amendment rights.

"If their arguments are true they have a very good case against the City of Fresno," said Legal Analyst Tony Capozzi.

Capozzi said this all boils down to how an adult-oriented business can operate in the north part of the city.

Originally, the lawsuit says the city had a code in which an adult-oriented store could operate if 25-percent of the store or less contained sexually explicit material. But in December the lawsuit says the city changed that code to 'any merchandise' considered to be adult material-- and according to Hustler Hollywood they didn't know about it.

"What the city did is have an ordinance that the plaintiff's followed, once they followed it and signed the lease they changed the law. Well you can't do that. That's called ex post facto," said Capozzi.

At that point Hustler Hollywood had signed a 10 year lease, and according to the lawsuit they have been paying rent on an empty building ever since.

"It put them at a really economic disadvantage, they're stuck with a 10 year lease, and they're going to suffer economic damages here. If they can show that the city did this purposely with the intent to keep them out they're going to have a good case here," said Capozzi.

The City of Fresno said, "As a policy, we refrain from discussing pending or present litigation."

At this point it's unclear how long it will take until the old building will be open for business again.

In the lawsuit Hustler Hollywood says they want to be able to move forward with their plans but they also want the city to cover all the attorney's fees. Which Capozzi says could add up to hundreds of thousands of dollars.