The Bordello Brothers

Brothers John (left) and Michael Chow are hoping to bring their successful sex industry business to the site of the old Palace Hotel in Auckland. Photo / Paul Estcourt

Look out, Auckland - the Chows have arrived.

With their black suits, broad shoulders, BMWs and Mercedes and extensive background in Wellington's red light district, the Kwasian sex industry magnates are out to make their mark.

In Auckland on Thursday to advance plans for the city's first high-rise brothel - directly opposite SkyCity, an area increasingly popular with the prostitution business - sex trade entrepreneurs John and Michael Chow emphasise the property investment aspects of their business and how their 10-level adult entertainment club will have a 60 per cent international visitor target.

Older brother John flicks his hair back, speaking with a strong Hong Kong accent in truncated sentences, checking his iphone, telling how he was just 14 when he arrived from Hong Kong. Michael, bald, has more of a Kiwi accent, quick humour and tells how he was 8 when he arrived.

Speaking from Albert St's expensive Stamford Plaza where they stay, and hold meetings in the lobby foyer, John Chow holds a thick folder of plans for the empty Palace Hotel site where a quantity surveyor has been engaged, along with experienced town planner Martin Green, to take care of their resource consent application for the new adult entertainment venue.

John Chow tells how they have also engaged defence lawyer Bruce Gray QC to work on litigation against Auckland Council over what he claims was the Palace's illegal demolition - the council said it was necessary to protect the public.

The Chows were converting their $3.3 million historic 1886 building into a brothel ready for the Rugby World Cup when engineers discovered cracks attributed to basement walls not being adequately supported during the renovations.

The council's chief executive, Doug McKay, says the owners were consulted but John Chow becomes animated and agitated when talking about the demolition and denies being told in advance: "Just like, someone come to my house and slap my mum and I've got to shut my mouth? I can't do that. I don't want to cause any trouble but the thing is, I've been put in a corner. What should I do? I spent the money, I've got property, I follow the process with the bill-paying and all the consultants and is someone taking advantage of me? I can't just let someone step over me."

The council defends its actions, and sent a $200,000 bill which remains in dispute. Yet now the Chows want the same authority to give them consent. John Chow simply cannot get over the demolition.

"We have been working on this since February and it will be a two-year project, looking at opening in 2013. I bought a property, I want to do a refurbishment - whether it's a brothel or other business like a restaurant. I engage a professional consultant to do the work, got the written consent, meeting with Historic Places Trust, everyone's happy and on 17 November the building got cracked.

"Wouldn't you expect the council to consult you? But within hours they make a decision. I come to your house, I demolish your house and send you $200,000 bill. How you feel? How you feel? Honest?" he demands, leaning forward, waiting, wide-eyed, questioning.

"It's quite amazing to me when someone demolish your building without your consent. I understand the council has health and safety reasons. No one was in the building next door so there's no health or safety issue," John Chow says, getting more heated as he takes the story from one step to the next.

Chow denies wanting any media profile but wants to establish Auckland business connections.

"Whether it's property or the other businesses, if I only come up here once a month, I won't be able to build a network. At least people know us, 'that's the Chow brothers', whether it's property or a brothel or a restaurant, it doesn't matter, at least people will know who we are."

One manager has criticised the Chows' brothel business, claiming girls aged just 18 to 21 are rostered on 17-hour shifts, charged for towels, linen, ads, marketing plus a $400 administration fee. The girls also pay for their own lubricants and condoms. Customers pay around $220 an hour and the women get $100-$120 of that.

John Chow says Chow Group has 80-100 employees plus 200 contractors, referring to their Exodus Health & Fitness Club, run by a sister, and the brothels.

Via group lawyer Max Tait, John Chow has demanded to see this article pre-publication - which the Herald refused - but before speaking, he says it has to be in his interests and refers to unflattering Wellington publicity. A Dominion Post December 18 feature was headlined 'No, not the Brothel Brothers.' Chow demands to know what headline will appear on this article.

Asked about the Palace plans, Chow says the adult entertainment business has higher margins, comparing that to the fast-food business. He explains how the sex business is not one they entered intentionally but how their first venture was in 1997 when they took over their folks' Tong Shan Takeaways, renaming it J & M Fast Foods, then doubling the business by keeping it open 24 hours and working in shifts.

A year later, they paid $1 million for the vacant former ANZ building in Courtenay Place, initially planning a hotel and opening another fast-food place; then the heavily mortgaged brothers were forced to sell a Lower Hutt family home and shift into the building. Michael Chow decided to cold-call strip clubs, eventually linking up with Auckland's Mermaid Bar which expressed an interest. The result was the brothers' leap into the sex industry.

Chow Group says: "For a couple of Naenae boys whose family migrated from Hong Kong to Wellington in 1984, it has been quite a ride." Asked about that experience, John Chow says "I'm the same as any immigrant. I came here when I was 14. I'm 40 now. Same as anyone, going to a strange area: once you settle down it becomes normal."

Michael Chow remembers being one of only about two Chinese New Zealanders at the college but laughs at the idea of bullies.

Asked about racism or being hassled, John smiles: "We are quite big actually [for] Chinese. Of course you've got bullies in the school but I'm the second-tallest in the class, so the bully only picks on smaller ones."