WATERLOO - The city's first "juice bar" is preparing for take off after more than three years of legal wrangling.

The Waterloo Board of Adjustment voted 3-0 Tuesday to approve an adult entertainment permit allowing dancers to perform completely nude at Fantasy Theater Live at 1850 W. Airline Highway.

Owner Earl Baugh, who had been battling the city to the Iowa Supreme Court since the Board of Adjustment rejected his original permit application in July 2005, said nude dancing could be set to begin as early as Wednesday night.

"I think it's entertainment," Baugh said. "We need more entertainment, with the casino coming in. Entertainment is always good."

Board members held a closed-door executive session before voting to grant the permit, with a number of stipulations.

Attorney Tim Boller, who represented the city board, said the settlement calls for the city to drop its appeal in the Iowa Supreme Court and for Baugh to dismiss his claim for monetary damages for being denied the permit for three years.

"We still feel the board made the right decision initially (to deny the permit), but the courts felt otherwise," Boller said.

The Board of Adjustment voted 3-2 in 2005 to reject Baugh's request to establish a "juice bar," so named because many nude dancing establishments sell juice as mixers to customers who bring the alcohol. Surrounding businesses complained it would alter the character of the area, which includes the family-oriented Airline Amusements to the east, which offers miniature golf, a driving range, batting cages and go karts.

Baugh took the matter to district court, arguing the business in the industrial area met all of the criteria for a special permit.

A judge sided with Baugh in September 2006, saying the board failed to rely on evidence when ruling on the permit. The Iowa Court of Appeals last month affirmed the district court ruling, prompting the city to appeal the issue to the state Supreme Court.

Baugh has had dancers performing in bikinis under a theater license while the legal battles took place.

Board members did include several stipulations for the permit.

-Customers can bring their own beverages if the alcohol content is 5 percent or less. Hours for live entertainment can run from noon to 5 a.m.

-The parking area must meet zoning requirements, including 96 stalls within two years; a 6-foot solid fence will be constructed on the east property line; the fence between the business to the north must remain in place; and the businesses exterior signs can't include anatomical areas or depict sexual activities.

Baugh's attorney, Robert Hearity, said, "I believe the settlement agreement is pretty clear and speaks for itself."

Contact Tim Jamison at (319) 291-1577 or tim.jamison@wcfcourier.com.