PROVIDENCE, R.I. (WPRI) — The Foxy Lady strip club will keep its licenses and get to reopen its so-called “VIP” area under the terms of a settlement agreement with the city of Providence.

The club was shut down in December after the city’s licensing board yanked its adult entertainment and liquor licenses amid prostitution allegations.

After a three-week closure during which the club appealed the decision, the Rhode Island Supreme Court issued a stay of the license revocation, allowing the club to reopen as its appeals were pending. Only the VIP room, where police said they were solicited for sex, remained closed.

Under the terms of the settlement, the Foxy Lady agreed to a 10-day suspension of its licenses, and the penalty was considered to be already served when it was shut down in December. The club also agreed to lower the partitions in the VIP room, where private dances typically occur, from four feet to three feet.

Former R.I. Supreme Court Chief Justice Frank Williams, who mediated the case, says the partitions were seven or eight feet back when the Providence Police conducted an undercover sting and arrested three dancers for solicitation.

Williams said the room has since been reconstructed and will get a new name, likely the “Gold” room. While the club has not said when the room will reopen, he said he believed it could be operating as soon as Friday.

The settlement agreement also says the parties “agree that there is no evidence that the violations resulted from gross negligence of the licensee.”

Williams explained: “The management was not aware of, nor did they encourage or allow, solicitation.”

The club also agreed to educate employees about the prohibition on prostitution, and to have random inspections. Williams will act as a monitor for a period of three years, and will mediate any future disputes with the city during that time.

Attorneys for the Foxy Lady did not immediately return calls for comment.

Providence Police Commissioner Steven Paré deferred to Williams for comment on the settlement, saying only that the city is in “full agreement” with the terms. A lawyer for the Board of Licenses also referred comment to Williams.

Two of the women who were initially charged during the sting, Neish Rivera and Melissa McNeely, pleaded no contest to the charges. The third, Lindsay Hoffman, was acquitted at trial in May.

Steph Machado ( covers Providence, politics and more for WPRI 12. Follow her on Twitter and on Facebook