Duncan, your lists are valid if the business is set up along the lines of a bordello, such that the prostitutes actually work for the manager. What I was suggesting, though, was more along the lines of someone providing a workspace for independent contractors. In that case, the items on your first list may be applicable (I'm not sure about the business insurance: basically you are renting out space, not running a business from that space.) The contractors (prostitutes) pay a fixed monthly fee for use of the space, which may or may not include security, and are free to charge whatever the traffic will bear for their services.

I'm not sure which type of operation would be more beneficial to the prostitutes, though. Probably wind up with both kinds, the bordello model being more upscale and therefore more expensive. And probably safer for all concerned, as well. Chances are you would still have street-walkers, too, but they would be more likely to be drug addicts and those unable to get licenses because of legal issues or health issues. A customer would (literally) take his life in his hands by choosing one of those.