WATERLOO - The tops aren't ready to come off yet at a proposed juice bar at 1850 W. Airline Highway.

Businessman Earl Baugh won an appeals court decision Wednesday ruling the city should grant him a special use permit to allow nude dancing at Fantasy Theater Live, formerly Porsche's Theater of the Arts.

But the city has the option of taking the case to a higher court.

"We can still ask for further review with the Iowa Supreme Court, and we've got 20 days to do so. Nothing will happen in that 20 days until we make a decision," said attorney Tim Boller, who represents the Waterloo Board of Adjustment.

Calling the decision a "rest stop" along the legal road, Boller said the issue will be addressed at a future city meeting but doubted it would be as soon as next week.

So for now, clothing will stay on at Fantasy Theater Live, which has been featuring bikini-clad dancers as Baugh's quest for a special use permit has ground on at City Hall and the courthouse.

Baugh declined to comment Wednesday.

Baugh originally sought the permit in 2005, but board members voted it down after neighboring businesses complained it would alter the character of the area, which includes a nearby amusement park.

He took the matter to district court, arguing he met the criteria for the permit.

A judge sided with Baugh in a September 2006 order, saying the board didn't rely on evidence when it rendered its ruling.

On Wednesday, the Iowa Court of Appeals affirmed the district court's ruling and said denying the permit was "illegal."

Contact Jeff Reinitz at (319) 291-1578 or jeff.reinitz@wcfcourier.com.