Chuck Jeffress, 39, a security guard at the lounge, lived at the hotel and said it was easy to find another place to call home. He said he had no problems in his 1-bedroom unit, which cost him $185 a week. He said the plumbing worked and he did not know of any mold problems. Bed bugs were not a problem because he used his own bed and bedding.
"I think it sucks that the health department has issued their holy edict just because the water is brown," said Jeffress.
He enjoyed his time at the Clermont, but won't miss living above the loud parking lot or paying $10 to have visitors after 11 p.m.
"My friend says it's the only hotel in America that hookers can't get into,"Jeffress said Wednesday night as a group of women watched a lone stripper.
The hotel inspection was triggered by a change in ownership. Prior owner Inman Park Properties was trying to sell the Clermont but couldn't dump it fast enough. The lender, Fairway Capital Partners of New York, foreclosed.
Matt Shulman, a partner with Fairway Capital, said his firm took over the property after Inman Park Properties failed to make payments. "Obligations were not met," he said. "We tried to defer payments."
Inman Park Properties could not be reached for comment. The real estate agent who tried to sell the property said a deal nearly closed, but he said Fairway Capital wouldn't approve it.
"It was under contract," said the agent, Gene Kansas. There were plans for a renovation, and Kansas helped select an architect who proposed slick upgrades like luminous polycarbonate walls. "It was going to be great, but I guess Fairway had other plans," he said.
Kansas said the collapsing market for commercial real estate, and the foreclosure, would cut the value of the property in half. Less than half a year ago, Inman Park Properties was asking $6.5 million. The Clermont had potential because of its location on Ponce de Leon Avenue and its oddball history, he said.
The Clermont was built in 1924 as an apartment building. It was converted to a hotel in 1940. Decades ago it earned its reputation as a hip spot for a younger crowd to watch overweight, older dancers. Last year, writers from the famous comedy outfit Second City visited the lounge for a skit about Atlanta. One of them mused that it seemed to hire dancers based on their "internal" beauty.
Fulton's Jones said Fairway submitted a remediation plan that his department deemed "inadequate." He said the county was working to help relocate the hotel's 38 long-term tenants. The lounge wasn't inspected because it remains under the permit of the operator, who is leasing it.
Shulman said the health code violations predated his company's ownership. He said the deteriorating condition was one reason his firm decided to foreclose. "We were concerned about the safety of the underlying collateral," he said. "I was worried that the roof might cave in."
Shulman said Fairway would do all it could in the short term to "stabilize" the property and to keep the lounge open. Long term plans include everthing from selling the property to redeveloping it and bringing in new management, he said. " We don't want to be seen as the big bad investment house that shut the Clermont down."