Baltimore- from www.citypaper.com – Tuesdays are Retro Night at Baltimore’s 580-seat Apex Theatre, meaning old VHS porn tapes are projected on the big screen instead of the usual DVDs. On a recent Tuesday, the onscreen action featured a mustachioed guy with a champion mullet going down on a big-breasted blonde. It’s a long, quiet scene, with no musical accompaniment, so in the cavernous silence it’s hard to miss the sounds in the seats: a zipper zips down front, and in the back, someone’s moving rhythmically. The two other patrons of tonight’s show would seem to be enjoying their solitary, if somewhat public, recreation.

A sign in the foyer baldly declares no sex acts performed in this building, but someone has scratched out the no. After all, pulling the juice in the dark is pretty much what X-rated movie theaters are all about.

Behind the Plexiglas at the Apex’s entrance, DVDs, snacks, and sodas are for sale. The cashier estimates that, on average, five customers an hour pay $10 to pass through the theater’s turnstile. Asked when to visit should one be looking for a crowd, he thinks for a second, takes a sip from his paper cup, and says: “About 1965.”

It’s a funny answer. But for the Apex’s owners, it points to an obvious problem: In today’s smut economy, they may as well be wearing powdered wigs and writing with quills. Porn consumers for decades now have been easily getting off in the privacy of their own homes, thanks to the boom of home-video technology in the 1980s and, more recently, the ubiquity of cheap, or even free, porn on the internet.

Today, according to cinematreasures.org, an ever-growing online catalog of more than 27,400 movie theaters around the globe, the international inventory of adult cinemas is down to 105, with 31 in the United States. They still hang on in big cities such as New York, Philadelphia, Chicago, Los Angeles, and San Francisco, and in less bustling locales, such as Bay City, Mich., Youngstown and Toledo, Ohio, Clarksville, Ind., and East St. Louis, Ill. But they are steadily on the wane. Since the Earle Theatre on Belair Road closed in 2006, the Apex–located on Broadway in Upper Fells Point–is Baltimore’s only remaining adult theater.

Apex owner Isa Mufareh (whose business partner is his son, Maurice) acknowledges that the business model is anachronistic, but says the theater still makes money. “With home entertainment, it’s available everywhere,” he says of adult films.

“But keep in mind,” he continues, “there are always some lonely people in this world. Our patrons, many are older people who don’t have that [technology] at home, and they don’t want to be at home alone. They want to mingle with other people who are in the situation they are in. There will always be people like that–we need more of them.” As for profits, Isa Mufareh says the business is “sustaining. We’re not getting rich out of it, just breaking even.”

The routine at the Apex is quite simple. The theater, other than the VCR tapes shown on Tuesdays, screens DVDs. “We buy them by the hundreds,” Mufareh explains. “We just take them out of the box and, well, just show them one after the other. On Thursdays, it’s the gay movies. We get about 100 people coming in on Fridays and Saturdays, half of that in the middle of the week.” As for costs, he says, “normally, there are one or two people working,” manning the cash register, operating the projector, and ensuring that patrons are behaving. Other than that, there are rent, insurance, and utility bills to pay.

Inside, the Apex retains its allure as a historic, single-screen theater. Four fleur-de-lis shaped sconces on the walls shed red light upward, and though a bit rag-tag in places–the ceiling is showing its age, and the bathroom has some plumbing issues–its homely grandeur is generally well-preserved. Upstairs, the projection room serves now as storage (the DVD projector used today is housed behind the last row of seats), but still boasts two vintage Motiograph projectors and some 35mm prints of old porn films, such as Deep Throat,www.xxxdeepthroat.com The Devil in Miss Jones III, Education of the Baroness, and Freedom to Love. The marquee, according to erstwhile Senator Theatre proprietor Tom Kiefaber, is “the second best marquee in Baltimore [after the Senator’s] in terms of its look, its maintenance, proper spacing, and matched letters.”

Isa and Maurice Mufareh, along with a third partner–Khalid Darraj, Isa’s nephew, whose one-third share in the business, Isa explains, was purchased by Maurice two years ago–have been running the Apex since 2003. Back when it was first converted from a bowling alley in 1942, it screened major Hollywood releases, but it has been an adult theater exclusively since the mid-1960s. With a market that consists largely of older, technologically unconnected people, the Apex is up against the law of attrition: Such patrons die off, and it’s not clear who, if anyone, will replace them. So the question becomes, how much longer can the Apex survive screening porn?

It’s a question that Khalid, Maurice, and Isa, incorporated as KMI Entertainment, tried to resolve several years ago by attempting to turn the Apex into a strip club. After the city liquor board consented to the change, in 2004 the Mufarehs and Darraj applied for a building permit for $250,000 in planned renovations, but zoning officials balked. In court documents, their lawyer, Fred Lauer, argued that “the Apex is used as an adult entertainment business and would continue such use, the only difference being that the adult entertainment would now be live.” The zoning board didn’t buy it, so in 2005 KMI Entertainment appealed to Baltimore City Circuit Court, where judge Evelyn Cannon didn’t buy it either. Live adult entertainment “is not similar in nature” to adult movies, she wrote in her 2006 opinion.

“The neighborhood made a fuss about it and filled up the courtroom,” Isa Mufareh recalls. “We said the law would let us do it, but [zoning officials and the judge] interpreted it differently–they wanted to interpret differently–so we didn’t get it. You can’t fight City Hall–if they don’t want it, then they don’t want it, and that’s that.”

Neither did the Apex’s neighbors. In letters to the zoning board, and in testimony before the board at the June 2005 hearing on the matter, several officials of neighborhood groups stridently opposed KMI Entertainment’s plans, essentially saying they preferred an existing X-rated movie theater to the possibility of a strip club instead–all the while attacking the theater, nonetheless.

“The Apex Pornographic Theater,” offered one letter-writer, “is a stark reminder of the troubled past of the surrounding area. It is time that this business stops being a hindrance, a moral drain and impediment to continued improvements” in the neighborhood. “I would like to see it resurrected as another general movie theater, not an adult theater,” wrote another.

In testimony at the hearing, neighborhood leaders observed that the Apex appeared to be struggling. “I don’t see people coming in, I don’t see people coming out,” said Edward Marcinko, president of the Upper Fells Point Improvement Association, concluding that “they’re not making any money. That’s why they want to bring in a nude adult entertainment complex.” Isa Mufareh, answering boardmembers’ questions, confirmed his dilemma: “No one wants to run a business that is not successful,” he explained, adding that “whatever we do within the law, we hope that we’ll make a profit out of it.”

“Those movie theaters are dying,” Isa Mufareh says today of X-rated cinemas, “but live entertainment is not dying.” Recalling KMI Entertainment’s efforts to bring Apex’s neighbors on board with their strip-club plans, he says: “We tried. We met with them, but everything was against us.”

It seems everything was, in fact, against them. The meeting Khalid, Maurice, and Isa had with community leaders, in a failed effort to appease them, occurred on Jan. 14, 2005. But first thing in the morning the day before, KMI Entertainment’s owners awoke to other, more serious troubles: Internal Revenue Service agents with warrants knocking on the doors to their homes, looking to turn up evidence of suspected tax evasion in connection with KMI Enterprises, a company owned by the three men that operated the strip club Christina’s Female Revue on North Point Boulevard in Baltimore County. The resulting searches turned up evidence that KMI Enterprises’ owners also were underreporting their income from KMI Entertainment, doing business as the Apex Theatre.

“I can’t talk about it,” Isa Mufareh says today of the criminal case that resulted–though he contends that “that subject has nothing to do with the Apex Theater.” It is relevant, though. Mufareh and his partners were convicted of underreporting the theater’s income, indicating that the Apex–despite its appearance of barely scraping by–makes enough money screening porn to merit hiding some of its revenues, however ill-advised the tactic turned out to be.

All three owners of KMI Entertainment and KMI Enterprises were charged with tax evasion and pleaded guilty in December 2008. The warrant described the IRS’ undercover operation targeting KMI Enterprises, doing business as Christina’s, and their owners, who had advertised the club for sale. The investigation began in August 2004, just as KMI Entertainment was applying to renovate the Apex Theatre. An agent posing as a prospective buyer called the real-estate agent representing Christina’s, and then, in September, met with Isa Mufareh, who told the agent that “the business was making a profit, but not on paper,” according to the warrant.

Meetings and conversations about the prospective sale continued into December 2004, with Isa Mufareh and Darraj increasingly disclosing the ways in which Christina’s operated under two sets of books, and how they and Maurice siphoned off unreported cash from the business, including through revenues from illegal gambling on video-poker machines. But the owners were cagey about sharing their records of the unreported income. “Isa Mufareh,” the warrant states, “stated that the law can get you for anything, such as money laundering. ‘We have to be careful with who we are dealing with.’ Khalid then stated ‘I do not want to end up someone’s girlfriend in jail.'”

When agents raided their homes on Jan. 13, 2005, the records showing that the Apex Theatre kept two sets of books were recovered from Maurice Mufareh’s house. The plea agreements in the case explain that the three owners each held a one-third share of the Apex, and that each “did in fact receive a one-third share of the earnings of Apex. Comparison between the second set of books recovered for Apex with the tax returns filed in 2003 for KMI Entertainment revealed that the conspirators had engaged in a similar pattern of underreporting the revenues of the theater” as they had with Christina’s. The amount of Apex’s underreporting came to $26,643, according to the plea agreement, compared to almost $300,000 for Christina’s.

As Isa Mufareh sat in a federal courtroom in downtown Baltimore in February 2009, preparing to be sentenced, he appeared comfortable with his fate, laughing and smiling with his attorney, Larry Nathans. Once the hearing got underway, a reason for this became clear: The prosecutor, Michael Hanlon, praised the defendants for taking “a very dignified approach” to the case, saying they were “on the right track from the go,” and recommended that U.S. District Court judge Catherine Blake hand down a lenient sentence.

When Isa Mufareh rose to address the judge, he was profoundly apologetic, acknowledging that “Four years ago, I made a mistake.” He described a long life of hard work and service, and said with sadness that “Two months from today, I will be celebrating my 40th wedding anniversary, perhaps alone.” Blake, after saying “Mr. Mufareh is, I’m sure, punishing himself with regret,” agreed with Hanlon’s recommendation of five months’ imprisonment followed by three years of supervised release, including five months of home detention, and, of course, restitution in the amount of $19,771. The other two defendants received the same sentences, though their restitution amounts were greater: $31,779 for Darraj and $20,667 for Maurice Mufareh.

In 2006, KMI Enterprises and its liquor license for Christina’s was transferred to Marc’s Vision, LLC, and Marcello Burdusi, state records show. KMI Entertainment survives to keep showing porn at the Apex Theater, with Isa and Maurice Mufareh as the remaining partners.

“We were thinking about it recently,” Isa Mufareh says, when asked by a reporter whether he’d ever considered showing something other than X-rated flicks at the Apex, “but couldn’t come to any conclusions.” When the possibility is raised of showing Spanish-language films, given the high density of Latinos living in the theater’s immediate vicinity, he says, “You are right, there are thousands. When I go to the theater, they are always asking me if I have any work for them. It could be done.”

Tom Kiefaber, who owned and ran the Senator Theatre as a first-run movie house for major Hollywood releases from the early 1990s until last year, agrees. In fact, he says he’d raised the possibility before with the Apex’s landlord, Mark Wagonheim, who is a beneficiary of the family trust that owns the Apex property. Wagonheim, who did not return a message asking to discuss his family’s history in the film-exhibition business in Baltimore, is the son of Howard “Boots” Wagonheim, Kiefaber explains, who helped chart Baltimore’s film-exhibition history as vice president of Schwaber Theatres.

“That’s what’s needed there,” Kiefaber says of the idea of screening Spanish-language films at the Apex. “That’s what its ideal cinema use would be, because of the population base. If you look at other cities where this is done, the audience can be very loyal and enthusiastic, so much so that it almost becomes a throwback to the heyday of the motion-picture business. There are enough people within walking distance to really make that location one which serves the community. It would be the ideal evolutionary move that not only would be more profitable, but would allow the landlord to improve this historic structure and provide a heightened sense of community. It would be win-win all around.”

Jessica Contreras, the mayor’s office liaison to the Hispanic and Latino community, also agrees. “It would be a great opportunity not only for the community, so they have someplace to go with their families, but also beneficial to the business owner–it would open the door for him to grow his business,” she says, pointing out that, while “no one really knows” the size the Spanish-speaking community in Baltimore, “most people would put it at between 30,000 and 35,000. How great would it be if the community does respond? It’s a very good business opportunity. There’s definitely a market for it.”

Kiefaber cautions that he prefers to be “reticent about telling someone else how to run their business, because I’ve heard enough of that myself over the years,” but he can’t contain his fervor when it comes to this subject. The Apex “is crying out for” Spanish-language film programming, he says, “and has been for years.”

Given the Wagonheims’ long history in Baltimore, Kiefaber adds, a successful shift to Latino films at the Apex would, in a certain sense, be a repeat performance. “What Boots did at the old Parkway Theatre and the Playhouse, it changed our culture in Baltimore, bringing in the Euro films, the art movies. It fostered a salon atmosphere, where people talked about films, engendering a community with common interests in, say, seeing and discussing [Ingmar] Bergman films. The Wagonheims utilized their theaters in Baltimore to change the film-viewing culture here, and I think they probably have an opportunity again with the Apex, don’t they? Sure got my vote.”

Isa Mufareh’s eyes, magnified by thick glasses, look friendly in his round face, and, for being in his mid-60s, he’s quite well-preserved. A short, unassuming man, one would never guess by the look of him that he’s an X-rated movie purveyor who used to be in the strip-club business. And it’s clear, as he gives a tour of his theater, that he’s not out to hurt anyone, only to make money.

“You should never run out of thoughts about improving things,” he says, reflecting on the option of screening Spanish-language movies. “I don’t want to upset the neighborhood. If anything comes up, it is not going to be derogative to the neighbors.” ?