Cortez City Council denied the renewal of Patron Nightclub’s liquor license after a public hearing Tuesday night. Councilors cited a repeated pattern of tax delinquency and law enforcement activity at the premises in their decision.
The nightclub, which is no longer allowed to serve alcohol, is unique in Cortez for its late operating hours, open until 2 a.m. Thursday through Saturday with earlier hours Wednesday and Sunday. Anna Arellanes opened the business located at 309 N. Broadway with her husband two years ago and the city’s finance department discovered last June that they hadn’t remitted any city sales taxes for the first six months of business.
“They had actually not even applied and gotten a sales and use tax license, which opens their accounts, et cetera, and starts the payment and submission process,” Finance Director Randy Bailey said before council.
He said finance staff reached out to the Arellanes couple, who agreed to catch up on their sales tax payments in December 2025. After more delay, they assured finance officials they would be current by May.
City officials said they still had not paid the outstanding $12,681 in overdue sales taxes by the time the owners applied for renewal of their liquor license in June.
“It wasn't until recently when the renewal came up that they stepped up their processes for becoming current,” Bailey said. “I believe it was last week or the week before, they actually then made full payment.”
In her statement before council, Anna Arellanes acknowledged the business’ tax noncompliance, which also extends to overdue state sales taxes, according to the Colorado Department of Revenue.
Her husband and co-owner of Patron, Saudiel Arellanes, said in an interview with The Journal Wednesday that they’ve now paid these state taxes with a loan.
“We've had a rough year at least. We were using it for things that we shouldn't have been,” Anna Arellanes said to council.
Saudiel Arellanes said he was in the hospital for three weeks last year, the same year they also had a baby. The money meant to be reserved for sales tax, he said, went to medical bills.
But, the couple said they just implemented DAVO, an application that automatically reserves, files and pays sales tax from customer transactions, into their sale systems.
“This should never happen again,” Anna Arellanes said to council. “We don't have the option to anyways.”
Councilor Bill Lewis, the most vocal opponent of the liquor license renewal, grilled Anna Arellanes on the noncompliance, stating the Arellanes were delinquent on taxes and were notified.
“Yes,” Anna Arellanes replied. After being asked why they “ignored” the tax delinquency, she said, “It wasn't necessarily that we ignored it. Things kept coming up and we just kept getting behind.”
Lewis said The couple was notified numerous times that taxes were due but “nothing was done.”
Councilors also pointed to higher than average police activity around the business. According to a memo from the city’s police department, 53 calls for service originated from Patron Nightclub from July 2025 through June 2026. 10 of the calls, the memo said, resulted in official reports.
Police Chief Vernon Knuckles said he didn’t believe the number of incidents warranted concern.
“The data doesn't reflect the type or frequency of incidents that would – from a law enforcement standpoint – rise to the level of concern needed to recommend against renewal,” Knuckles said in his testimony.
The memo also referred to “anonymous tips” received by the police department alleging overservice and underage drinking at the site but also acknowledges neither claim was verified. Saudiel said they only let those of 21 years of age and older enter the bar.
Despite Knuckles’ lack of concern about the law enforcement activity data, Councilor Claire West, in her motion to deny the renewal of the liquor license, cited “unsatisfactory character, record and reputation in a continuing pattern of disorderly conduct at the premises as described in the police department’s testimony” as cause.
Councilors voted 5-2 to deny the renewal, with Councilor April Randle and Mayor Dennis Spruell opposed.
“There's a pattern established here. And I don't think this business has a good standing with the city,” Lewis said.
Saudiel said they intend to appeal the decision but the nightclub will remain closed while their liquor license is pending.
avanderveen@the-journal.com
