Public-health officials have settled their smoking-ban case against Medina Hookah Lounge in Seattle, which could pave the way for Mayor Ed Murray to come to terms with such businesses that he at one point vowed to shut down.

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Public-health officials settled their case against a Seattle hookah lounge Friday, clearing the way for Mayor Ed Murray to end his clash with owners of other similar businesses.

Last August, Murray said he would move to shutter all 11 of the city’s hookah lounges for violating a state ban on indoor smoking in public places and places of employment. He linked the businesses to violent crime, including the fatal shooting of Chinatown International District community leader Donnie Chin near one such lounge.

Then dozens of lounge owners and hookah smokers, along with other supporters, showed up at City Council meetings to protest the mayor’s plan, calling it discrimination against businesses run by people of East African and Middle Eastern descent.

So Murray backed off, saying he would enter talks with the owners and use the city’s Racial Equity Toolkit process to analyze the community impacts of closing the lounges.

The mayor sent an analysis to the council in February, saying he would hold off on more talks with the owners until after a judge’s ruling in Public Health — Seattle & King County’s smoking-ban case against Medina Hookah Lounge. That’s the case that settled Friday.

Under the agreement, which waives more than $100,000 in penalties against Medina, the lounge must take steps to operate strictly as a private club, with a secured entrance, no advertising, no alcohol, no more than 2,500 members and no paid employees.

Before settling, Medina argued it was already a members-only club, but public-health officials contended it wasn’t. Russell Knight, lawyer for the lounge, said his client has agreed to make Medina “more private” in return for officials dropping the case.

The agreement is based on how members-only cigar lounges are allowed to operate in Seattle and King County without violating the smoking ban, Knight said.

The lawyer said he believes Medina’s agreement will smooth a path for public-health officials and Murray to make peace with other Seattle hookah lounges.

“I think this will guide the way the county treats the other lounges,” Knight said. “My sense is that these terms are going to be what the city adopts … as well.”

The agreement applies to Medina only and the judge in the case has yet to sign a dismissal order, so the case is technically still active, said James Apa, spokesman for Public Health — Seattle & King County.

The agency “remains committed to enforcing smoking laws, which help protect against tobacco smoke — the leading cause of preventable death in the United States,” Apa said.

The mayor on Friday called Medina’s agreement encouraging.

“It mirrors our discussions this winter and provides an example of a private-club model exempt from the state smoking ban that is acceptable to Seattle — King County Public Health,” Murray said.

He said the city soon will resume talks with the lounge owners.

There has been no arrest in the Chin homicide. Murray convened a task force late last year to address crime in the Chinatown ID, asking for recommendations this month.