Philadelphia Judge Frank Palumbo, longtime landlord of a now-shuttered strip club at 13th and Locust Streets, has leased the controversial property again, this time for a restaurant and dinner theater.

Though one neighborhood group welcomes the venture, known as Evolve, another opposes it as "dubious" and questions Palumbo's judgment in renting to a group that includes a man convicted of federal bank fraud.

Among Palumbo's new tenants is John David "J.D." Coleates, 46, operations manager for Triumph Brewing Co., an upscale brewpub with locations in Old City, New Hope and Princeton.

Coleates spent nearly two years in prison after pleading guilty in 2000 to siphoning $2.7 million from a drag show in Honolulu called Boy-lesque.

He also has a history of financial problems, court records show, including a 1992 bankruptcy filing and outstanding federal income tax liens totaling more than $200,000. He declined to comment on his past.

Palumbo, who handles criminal cases in Common Pleas Court, said he didn't know about Coleates' history when he leased the building to him and two partners and embraced their plans to open Evolve. He said Coleates' troubles wouldn't interfere with his ability to run a quality business.

"He's a pretty classy operator," the judge said in a brief telephone interview. "I'm impressed with what he's done."

Judy Applebaum, head of the Washington Square West Civic Association, said she believed the new restaurant would be "only a positive" for the neighborhood and said the group had no problem with Coleates' involvement.

"He has a history of running very successful restaurants," she said.

Further, Applebaum said, "there will be life on that corner. There has not been life there for years."

Coleates and his partners - restaurant veterans Joseph M. Leone Jr. and Linda D. Kalkowski - promised to hire security for the restaurant, improve street lighting, and take deliveries through a back entrance. They also promised not to sell beer or food to go, Applebaum said.

But the East of Broad Improvement Association, a neighborhood group that has thwarted the judge's plans for the building several times in recent years, is fighting the latest proposal.

Ruthanne Madway, the group's executive director, questioned Palumbo's decision to sign a lease with Coleates, managing partner of Spectiva L.L.C., the corporation that would operate the restaurant.

"He's brought us somebody as the spokesman for this project who's a convicted felon with a lot of business failures in his background," she said. "Nothing to recommend him. This community deserves better, particularly from a public official."

East of Broad has filed a formal objection to Spectiva's application for a liquor license.

State law does not prohibit felons from owning or managing bars or restaurants, said Nick Hays, spokesman for the Pennsylvania Liquor Control Board. However, he said, "the board can refuse an application to someone who's been convicted of a felony within five years."

In awarding liquor licenses, the board also must consider whether the applicant is "reputable," he said, adding: "the board may consider felony convictions in determining that."

Barry Goldstein, a lawyer for Spectiva, said Coleates had no money invested in the deal. Thus, he said, Coleates' past should have no bearing on whether the license is approved.

"In my opinion, it's irrelevant," Goldstein said.

Moreover, he noted, the LCB has already given Coleates its blessing by allowing him to manage the Triumph brewery.

In its objections to the LCB, East of Broad also has raised questions about whether Coleates has a hidden ownership stake in the business - a contention denied by Coleates, who said he was merely a hired consultant.

The liquor board hearing on the club's license application is scheduled for this morning..

Palumbo inherited the building at 1301 Locust St. from his father, Frank Palumbo Sr., owner of the famed Palumbo's Cafe, a South Philadelphia landmark destroyed in 1994 in three separate arsons that remain unsolved.

The judge has angered neighbors in recent years with several plans for the building that ultimately failed.

At one point, a tenant wanted to expand Signatures, a small strip club that had operated in the building for more than 20 years, into a 12,000-square-foot venue for strippers and lap dancers called the Gold Club.

Residents fought back with lawsuits. Palumbo evicted the club before the expansion could get off the ground.

The principals of Evolve said the planned restaurant, unlike earlier proposals, would be a good fit in the neighborhood.

"We're starting from scratch," said Brian Goldthorpe, a spokesman. "We are looking to transform that space."

Plans call for a 15,000-square-foot restaurant that would cover three floors. A stage would be installed on the first floor so it could be used as a dinner theater, movie screening room, or ballroom.

"This will not be a cabaret," Coleates said. "None of us is interested in running a nightclub."

The dance poles from the old strip club will be removed, he said.