Carousel is a strip club. It is attached to a peep show place. There are still plenty of gay men crusing around on Christopher all the way West, but with the "greenway" established the attraction of the piers for clandestine rendezvous has somewhat diminished ( privacy is way down, "shooing" by LE way up ). The reason why the way West Village became popular for certain activities to begin with was because of how out of the way and desolate it was. Now, as the center of attention, it doesn't provide the same attraction as it use to for certain activities. Not only that, with all the hoi polloi making it their playground, not to mention the sales of $ million apartments, the neighborhood has altered it's tolerance for activities which have taken place since long before most of the current inhabitants ever set foot there.
I think it's funny when people move from the Upper East Side ( and elsewhere ) to this area, having little or no concept of the history of the area, and then complain that Rudy's crackdown on 42nd Street has "driven this element into their neighborhood". The fact is, the "bad element" from the West Village/Meat Packing district was there first, considered it their neighborhood, and is being forced out by a group who has no clue as to the "true character" of the area.