PROVIDENCE — The waterfront flare-up between developer Patrick T. Conley and businesses on Allens Avenue is starting to burn out of control and has now drawn the businesses and the strip clubs on the avenue into a fight that threatens to cancel the Puerto Rican Cultural Festival planned for this weekend.

Conley and the waterfront businesses, known as the Working Waterfront Alliance, have been battling for years over the future of the industrial strip.

In 2006, Conley opened Providence Piers, a mill housing artists’ studios, function space, and an art gallery, in between Sprague Energy and Promet Marine Services, a shipyard. He wants to see the zoning changed in the area to allow for more than just industrial use. He had originally proposed condominiums, but appears to have altered that proposal to suggest that some sort of commercial use might be more appropriate.

In the interim, Conley has been holding carnivals, concerts and festivals at a vacant lot at his Providence Piers site since last summer, although they are prohibited by the area’s zoning.

Earlier this summer, Conley applied to the city’s Zoning Board for a variance that would allow him to use the site for parking in the winter, with the intent of leasing it out as satellite parking to potential clients like Women & Infant’s Hospital and Brown University. City planners told Conley that if he was asking for one variance, he needed to apply for others to make these festivals legal.

“We’re trying to do the right thing,” said Conley’s lawyer on the zoning application, Barbara Harris.

Meanwhile, several events were scheduled. A carnival was held earlier this summer and a WBRU radio event was held last weekend, arousing the ire of local business owners as attendees parked on their property and on Allens Avenue, where street parking is prohibited.

Now, the next event scheduled to use the site is the Puerto Rican Cultural Festival, an annual event held around the state that draws thousands of people. The three-day festival starts Friday.

At a Zoning Board hearing last night on whether Conley should get his variances, the festival’s timing shone a light on the fact that the site is not zoned properly. And when festival organizers went to get their permits Monday, they were shocked to discover that there was serious opposition to the event, and learned that they would have to wait for their permits and liquor license until Conley’s zoning variance was dealt with.

Among the opponents at a liquor license hearing Monday were lawyer David Tapalian, who acts as the agent for the Allens Avenue adult business Cheaters, which is owned by his father, Charles. Also in opposition were representatives of some of the Allens Avenue industrial businesses, such as Promet, Sprague, and Narragansett Improvement Company, an asphalt manufacturer.

Stunned by their sudden inability to obtain permits, the festival’s organizers yesterday fired off a news release blaming the “sex trade” for trying to block their festival, and naming Charles and David Tapalian specifically.

“We announced this early in June,” said festival president Carmen Bucholz. “Why couldn’t they say something then? We have worked very hard with police, licensing, and have done every-thing possible to make this a safe event to benefit mutual understanding of our community and culture. Suddenly we need a hearing because the porno guys whose clients park on the street decide today that they have a problem with a wholesome family event?”

David Tapalian responded that they should be mad at Conley, for renting out an improperly zoned site for events Tapalian said don’t belong there.

“The person they should be upset with is Mr. Conley, who accepts all that money from them without getting licenses for the event,” Tapalian said. Charles Tapalian later issued a statement saying that this specific festival should go forward this weekend.

Lawyer Andrew Teitz, who represents several of the waterfront industrial businesses also opposed the variances for the festival, said that festivals are the wrong use for the property.

“We’re concerned about the festivals and whatnot because they do have an impact. The people are parking everywhere, they’re parking on the streets. There have been incidents,” Teitz said, stating that several business owners have had conflicts with event attendees trying to use their facilities for parking.

Teitz said that Conley is now using the festival as blackmail to get his variances.

“He’s basically trying to blackmail the Zoning Board tonight, and the Licensing Board — saying that if they don’t approve it, the Puerto Ricans are going to be out all this money,” Teitz said yesterday.

Yesterday’s hearing lasted late into the night and, as of press time, there was no resolution. The Licensing Board will also decide today whether the Puerto Rican festival can obtain the liquor license.

Last night, as Conley’s representatives explained why the site needed to be used for both parking and festivals and farmers markets, the opposition tried to show that the site was unsafe for nearly any use.

The property was the site of petroleum storage and a coal gasification plant under previous owners, who are negotiating with the Department of Environmental Management to remediate the site. Until then, Conley’s team argues that it is not useful for much beyond one-time events and parking.

“Parking on the property is about the only thing that really works,” said Ken Orenstein, a real estate expert hired by the developer.

Teitz said that the site is still toxic, and it is not appropriate to have children attending festivals there.

“Kid drops a quarter, bends down to pick it up, and you’ve got petroleum waste and cyanide on your hands,” he said.

Orenstein responded that the site has been topped with tens of thousands of pounds of clean fill, and that a half-foot of gravel rests on top of that.

Erik Bright — the co-director of the Partnership for Creative Industrial Space, which has served as an intermediary to bring artists and small industrial businesses to Providence Piers — spoke for Conley last night.

Bright said that these festivals are needed to bring life to the area, and the parking is needed to help pay for a site that otherwise provides little income.

“The property can’t pay for itself right now,” Bright said. “There has to be something that can pay for taxes and mortgages for the rest of the year. The site has to pay for itself.”

Some cruise ships stop at the site now, as does the Rhode Island Public Transportation Authority’s Providence-to-Newport Ferry, but the ferry is in its last year.

Meanwhile, he said, the festival urgently needs to be approved for this weekend — close to $30,000 has already been spent on it, and he said he spent time at the site yesterday talking to vendors and roadies who are relying on the income it will generate.

“They’re counting on this festival happening,” he said.

dbarbari@projo.com