JOHNNY ZUKLE, the manager of Casa Diablo—Portland's iconic vegan strip club—looks at a former adult novelty store on SE McLoughlin and sees a vibrant, successful second outpost for his operation, a dream he's had for more than a year.

His would-be neighbors, however, see something else: A crime-boosting, sleazy addition to a street that already hosts two other strip clubs—fuel for a nightmare that would turn their quiet neighborhood into Portland's newest red light district.

And now it's up to the Oregon Liquor Control Commission (OLCC) to play referee. The OLCC has decided to hold off until June on deciding whether to give a liquor license to the second Casa Diablo, urging the surrounding neighborhood associations and Zukle to come up with some kind of compromise. But judging by past head-butting over the issue, it's not clear if that happy medium exists or if it can be reached in just two more months.

"It's sad that the OLCC commissioners care about just a few whiny neighbors who stick their nose in other people's business," Zukle told the Mercury after the OLCC's most recent meeting on Thursday, April 5.

In September 2011, members of the Eastmoreland and Sellwood neighborhood associations along SE McLoughlin gathered to protest the new club, a few feet away from a counter-protest made up of strippers and club supporters. The hot feelings in the wake of that clash have yet to cool.

"The reality is, this would be the third strip club on McLoughlin, essentially creating our own red light district," says Robert McCullough, president of the Eastmoreland Neighborhood Association, who says he isn't opposed to the business, just the location. "We're establishing a destination for sex trade."

McCullough also says that TriMet's planned light rail line to Milwaukie will go directly by the clubs, making them easier to visit. He says the OLCC's decision to push for mediation wasn't surprising, but doubts Zukle will comply.

"He may not be sophisticated enough to process the decision," he says, complaining that Zukle never again contacted the association after an initial meeting last May. "He's not a great negotiator."

But Zukle says otherwise. "I'm not the one who hasn't been responsive," he says, suggesting that his "clean" and "positive" establishment will help the run-down industrial area. He was inspired to set up shop along McLoughlin after hearing from Southeast neighbors who wanted some vegan competition to famously meat-friendly Acropolis, where big fat steaks come as cheap as $5.50.

OLCC commissioners, speaking at this month's meeting, tried to impose their own compromise by putting restrictions on Casa Diablo's liquor license. The restrictions included cutting off alcohol sales at 1:30 am and allowing customers only one drink per order. Zukle rejected the idea, so the commissioners told him to work it out with neighbors instead.

"Why are we stuck with the restrictions? It hurts our business and customers," says Zukle. "We didn't do anything to deserve this."

Neighbors' initial complaints about a crime surge were based on neighboring Acropolis' alleged criminal history. But according to the Portland Police Bureau, only three misdemeanors were reported near Acropolis over the past year. A review of the city's crime maps shows that, overall, SE McLoughlin is a dead zone for crime.

"There's no conclusion that there is a crime increase around strip clubs," says spokesman Lieutenant Robert King.

Liquor license or not, Zukle says the club will open. "All the neighborhood association people have done is waste money that could be going toward our employees' health care or wages," says Zukle, who promises the second location will create up to 25 new jobs.

Despite the bad blood, the OLCC's licensing services director, Farshad Allahdadi, says he's hopeful for a solution by June. "The goal is to get some kind of compromise out of it," says Allahdadi. "Not everyone is going to be 100 percent happy."