Thousand Oaks, California
Memo concerning proposed adult business ordinance
 

TO: CITY COUNCIL

FROM: MARK G. SELLERS, City Attorney

DATE: December 12, 2000

RE: Proposed Ordinance for Regulation of Adult Entertainment: REF 2291

ISSUE

Should the City Council consider the enacting of an ordinance designating certain areas or zones of the City as appropriate for adult entertainment uses or businesses, and establish the various conditions or regulations of that form of commercial enterprise, using the attached proposed ordinance as a guide?

RECOMMENDATION

The City Council should direct the Planning Commission to consider the ancillary impacts of this type of use, look at the appropriate areas or zones of the City for adult entertainment uses or businesses, consider what conditions or regulations may be required for that form of commercial enterprise, the permitting process and provide its recommendation to the City Council, using the attached proposed ordinance as a guide.

FINANCIAL IMPACT

Costs of staff time and work for this type of ordinance and use.

BACKGROUND

  • First Amendment Rights; No Flat Prohibition.

The regulation of adult entertainment frequently causes tension between a city's land use objectives and the first amendment rights to view or provide this form of expression. It is land use subject which has generated a significant amount of litigation. Like many other

commercial uses, adult oriented businesses can produce litter, noise, and traffic. What makes such adult uses different is that they frequently cause neighborhood decay, assist in the transmission of diseases, and are associated with certain criminal activity. Therefore, a city can legally classify this type of business as a unique and separate use, and regulate it in an effort to eliminate those normal ancillary adverse impacts or secondary effects. Young v. American Mini Theatres, (1976) 427 U.S. 50, 96 S.Ct. 2440. However, adult uses or establishments(1) cannot be singled out merely in a city effort to create a de facto or broad ban on such uses. Schad v. Borough of Mount Ephraim,(1981) 452 U.S. 61, 101 S.Ct. 2176 (Court struck down a zoning law which banned live adult entertainment city wide). Nor can a city's regulations focus on the "content" of the adult expressions, which is a form of protected speech. Like it or not, non-obscene adult entertainment is a form of speech entitled to first amendment protection.

  • Regulate "Secondary Effects" As Goal; Local Time, Place and Manner Restriction Serving Legitimate Governmental Interest.

City regulations focusing on the content of the speech or entertainment, called "content-based" restrictions, will be subject, to the very demanding "strict scrutiny" standard of review by the courts. Content-based restrictions are justified only if the ordinance is narrowly tailored to serve a "compelling" governmental interest.

On the other hand, a "content-neutral" local ordinance, which regulates the secondary effects or conduct other than what was said [but conduct which may be associated with an act of speech], is subject to a lesser justification or judicial review standard. This type of regulation may be justified if it furthers one of many "substantial" governmental interests and the regulation is tailored to serve that governmental interest. The city's police power is very broad, and consequently goals such as the prevention of crime, the preservation of neighborhoods, avoidance of blight and the regulation of nuisances have long been considered proper objectives of zoning and are "substantial" governmental interests.

A "content-neutral" ordinance can even regulate "the time, place and manner" of communicating the idea. An ordinance is content-neutral if it is aimed at eliminating or controlling the "secondary effects", such as noise or a criminal activity, which can be expected to result from exercising that protected form of expression. In determining whether an ordinance is content-neutral, the court's inquiry is "whether the government has adopted a regulation of speech because of disagreement with the message it conveys" or to prevent a true secondary effect. Ward v. Rock Against Racism, (1989) 491 U.S. 781, 109 S.Ct. 2746.

In case of City of Renton v. Playtime Theaters, Inc., (1986) 475 U.S. 41, 106 S.Ct. 925, the Supreme Court upheld a City's adult entertainment ordinance, since the ordinance focused on preventing the "secondary effects" of that type of commercial business, and not on the content of the speech allegedly being conducted therein. The court found the legislative purposes of preventing crime (such as prostitution, underage drinking, fights, etc.), curbing blighting influences of certain land uses (such as depressing property values), and limiting identified impacts (noise, late night disturbances, etc.) on nearby uses or properties are proper objectives of zoning and substantial governmental interests. The court indicated an adult use ordinance needs to identify or state its goals and the nature of each regulation enacted must be a reasonable step in achieving those goals. A factual background on the adverse effects and the reasons for the regulation must be presented to support the city council's findings for enacting the ordinance. Therefore, some study or report must be prepared which identifies the adverse secondary effects of unregulated adult businesses. The court, in the City of Renton case held a city could rely on the experiences of other cities and adopt the studies and conclusions of those other cities. Attached is such a study prepared by the City of Los Angeles.

  • Concentration or Dispersing Use; Adult Businesses Must Be Left With A Reasonable Opportunity to Open and Operate.

In City of Renton v. Playtime Theaters, Inc., the court also held that a city could either (1) concentrate these uses into one location; or (2) disperse them throughout the city ( a "non-cluster" or "Anti-skid Row" ordinance designed to discourage development of a "skid row" area)(2). The City of Renton allowed these uses in commercial zones (although a "manufacturing" or "industrial" zones are often used), but prohibited such uses within 1000 feet of any residential zone, church, park, or school. Other cities have limited them to certain areas(3), or have created a specific or unique zone for such uses.

Whatever approach a city takes, it must leave "reasonable alternative avenues of communication" for this form of protected expression, generally accomplished through zoning sufficient areas of the community as acceptable for these establishments. A city must analyze the availability of feasible acreage where these uses will be allowed under a proposed ordinance (prepare a staff report identifying those permissible locations). To be "feasible", the land zoned for adult uses must be part of the "active commercial real estate market". Topanga Press v. City of Los Angeles, (9th Cir. 1993) 989 F2d 1524. The existence of an ample supply or market for adult entertainment outside the city does not justify the city's suppression of that form of speech and market within its borders.(4) In essence, there should be some type of supply and demand analysis. To be valid, the amount or number of acceptable complying sites, under the ordinance, which are in the community's active commercial real estate market, must be reasonable in light of the expected local demand for such forms of speech. If it is not reasonable based on that demand, the ordinance will be viewed as a de facto (and invalid) ban on this form of speech.

A. Defining Active Commercial Market. To qualify as part of the active real property commercial market, a site must have the normally expected minimal level of infrastructure (stubbed out lines for sewers, electric, and street access, etc.). However, a site or space need not be currently available to purchase or lease, nor need it be offered at what some might allege is an affordable commercial rental rate, nor need the land owner be willing to rent space to an adult business(5). The court looks at primarily the physical characteristics or practical suitability of the land zoned, with a limited inquiry into on the costs of improving, altering or developing that land into a viable commercial or industrial site. To date, courts have not required a city to evaluate the possible severe economic impacts of high land costs or lease rates upon the operation of a business (such as the cost of a site will result in lower or no profits and high overhead costs to be commercially unfeasible for an adult business). "Adult businesses must fend for themselves in the real estate market, on an equal footing with other prospective purchasers and lessees." Topanga Press, at 1529.

B. Adequate Number of Sites. How much is sufficient? There are no set formulas. The number of adequate sites for a city with unacceptable existing adult uses, which are being closed-out via a city amortization program, and thus, forced to relocate, must be at least greater than the number of those existing adult businesses, plus the number of new businesses seeking, or likely to seek, permission to open. If a city has no present adult businesses, and no pending inquiries or applications, the number must be reasonable based generally on the size of the city.

For example, the City of Renton allowed 5% of its total land area or 520 acres for this use; the City of Minneapolis zoned 6.6% of the city's total acreage then zoned for commercial uses (Alexander v. City of Minneapolis, (8th Cir.1991) 928 F.2d 278(6). In Walnut Properties, Inc. v. City of Whittier, (9th Cir.1988) 861 F.2d 1102, the federal court found a zoning ordinance that effectively left only 1.4% of the city's land area, for a city of 90,000 people, insufficient. However, the court also noted that the Whittier ordinance, enacted after the plaintiff began offering adult entertainment, "would force the only existing adult theater in Whittier to close at its present location with no definite prospect of a place to relocate."

Perhaps, a more appropriate general inquiry of land area available is the number of separate feasible sites where an adult business could exist in light of the proposed zoning restrictions. (BBI Enterprises v. City of Chicago, (N.D.Ill. 1995) 874 F.Supp. 890 ("more relevant basis for comparison is the relationship between (1) the number of a city's sites that are really available for adult uses and (2) that city's population - a relationship that speaks more directly in supply-and-demand terms."). For example the federal district court found an ordinance valid where the city showed that, with one adult business currently existing in Pasadena, new adult businesses could locate in up to 26 sites in the City of Pasadena, which had a population of 135,000. 3570 East Foothill Boulevard, Inc. v. City of Pasadena, (C.D.Cal. 1995) 912 F.Supp. 1257); see also, Lakeland Lounge of Jackson, Inc. v. City Jackson, (5th Cir. 1992) 973 F.2d 1255 (10 alternative sites for 5 existing businesses did not limit expression under Renton). Three sites were reasonable for the City of Taft with a population of 19,000 people (Diamond v. City of Taft, (9th Cir. 2000) 215 F.3d 1052.

  • No Discretionary Approval; Need for Defined Clear and Objective Standards or Criteria.

Adult businesses cannot be regulated by means of any "discretionary" entitlement process such a Conditional or Special Use Permit. Discretionary permits give the governing body or administrator too much substantive flexibility, encouraging inquiries into content, and lacking uniformed application, thus, this subjective permitting represents an invalid prior restraint on free speech. Dease v. City of Anaheim, (C.D.Cal.1993) 826 F.Supp. 336; Gammoh v. City Anaheim, (1999) 73 Cal.App.4th 186, 86 Cal.Rptr. 194. Any criteria or operational standards must be "narrow, definitive and objective". The use of expansive language or vague phrases such as "the use shall not adversely affect the neighborhood", or the "use shall not be inconsistent with the other uses or structures in the neighborhood", or "the site should be sufficiently buffered from nearby residences" leave too much discretion and subjectivity with the permit granting body or officer. Smith v. County of Los Angeles, (1994) 24 Cal.App.4th 990, 29 Cal.Rptr.2d 680 [must be a true zoning ordinance, rather than a prior restraint of free speech]. The process should be administrative similar to that for a permitted use in a set zone.

Since free speech is involved, the time for processing and acting on any application for an adult use must be prompt and within a period of days as set forth in the ordinance. A long processing time of 90 or more days has been found to be a form of censorship. Any built-in discretion or authority for the permitting officer to unreasonably delay the processing of an application is a de facto, and therefore improper, ban. FW/PBS, Inc. v. City of Dallas, (1990) 493 U.S. 215, 110 S.Ct. 596.

  • "Knock Out" Issue: Simi Valley Experience.

Simi Valley's ordinance had a required sensitive "buffer area" from certain other existing or planned uses, so an adult use application had to be denied if for instance a church was located within 1000 feet of the applicant's proposed business site. In Simi Valley, the applicant filed for its permit and then, just before the adult business' hearing, a church opened up within the 1000 foot buffer area and the city found that this fact knocked the applicant's site out as a permitted site for city consideration. The federal district court found the Simi Valley ordinance invalid based on this aspect. The appropriate time for measuring the incompatible adjoining uses is at the time of the application, and not later at the hearing.

  • Operational Standards.

To offset the identified secondary effects, a city can prohibit the touching of entertainers and customers, Hang-On v. City of Arlington, (5th Cir 1995) 65 F.3d 1248; prohibit the "direct" tipping by customers of the entertainers, Kev, Inc. v. Kitsap County, (9th Cir. 1986) 793 F2d 1053; set minimum requirements for the stage and seating areas, such as the stage or platform shall be at least twenty-four (24) inches in elevation above the level of the patron seating areas and no adult entertainment by an entertainer shall occur closer than ten (10) feet to any patron Colacurio v. City of Kent, (9th Cir. 1998) 163 F.3d 545, Tily B., Inc. v. City of Newport Beach (1999) 69 Cal. App.4th 1, 81 Cal.Rptr.2d 6; require a certain level of management supervision Spokane Arcade, Inc. v. City of Spokane, (9th Cir. 1996) 75 F.3d 663, Colacurcio,(9th Cir. 1998) 163 F.3d 545; and prohibit total nudity, City of Erie v. PAP's A. M., (2000) 529 U. S. 277, 120 S.Ct. 1382.

7. Quick Judicial Review of Any Challenge.

In Baby Tam & Co., Inc. v. City of Las Vegas, (9th Cir. 1998) 154 F.3d 1097, an adult bookstore owner challenged a Las Vegas ordinance and the Ninth Circuit federal court determined that a Writ of Mandamus under the Nevada state law did not satisfy the required procedural safeguard of a prompt form of judicial review. Since the Baby Tam decision, the California writ of mandate law has been changed by the state legislature to add Section 1094.8 to the state's Code of Civil Procedure. That section now allows for an expedited court judicial review of a city's revocation, suspension, or denial of an adult business permit or any other entitlement for any expressive conduct protected by the First Amendment to the United States Constitution. That state law requires a city to designate, by ordinance or resolution, those city permits or entitlements that should receive expedited judicial review because such permits or entitlements regulate expressive conduct.

  • Proposed Ordinance.

This office has evaluated a number of adult entertainment ordinances enacted in other cities, as well as, a number of model ordinances. We have reviewed the case law in this area. This office has drafted the attached proposed ordinance which can be used by the Planning Commission in its review of this matter. The attached ordinance would, among other things, prohibit the transfer of any permit, require employee registration, limit the hours of operation, set lighting levels, establish configuration requirements for stage area and seating, prohibit touching of customers, prohibit tipping and nudity, require security guards, have a time duration for the permit, and set up an administrative permitting process.

MARK G. SELLERS

City Attorney
 

mgs:H:585.30.AdultEntReg.Mem .

1. Although defining what an "adult" use is sometimes is a challenge, the California courts have held an adult "use" need not be one where only "over 50 percent" adult films are shown or products sold. A city may define such a use as one where on a "regular basis" films characterized by an emphasis on the "specified sexual activities" are shown, or where such films constitute a substantial portion of the films shown or account for a substantial part of the revenues derived from the exhibition of films. People v. Superior Court of Los Angeles County (1989) 49 Cal.3d 14, 259 Cal.Rptr. 740.

2. The dispersing approach, such as requiring and adult business to be at least 1000 feet from another adult business, requires some speculation as to where the first such use may appear, then the second, third, etc. to see how many could qualify. Therefore, the dispersing approach when added with other distance criteria creates a moving target situation causing some legal concerns in verifying adequate sites are still available in the city.

3. In City of National City v. Wiener, (1992) 3 Cal.4th 832, 12 Cal.Rptr.2d 701, the California Supreme Court held that a municipal zoning ordinance, which had a 1500 foot separation restriction on the location of adult entertainment businesses in the commercial area, but which also provided an exception for those businesses to locate within the enclosed regional shopping mall, did not violate the First Amendment even though the mall owner would be unlikely to rent to such businesses.

4. The only way a city can show that there is no need for its contribution to the adult speech market is for the city to open its borders to the speech. If the city's contribution to the market is not needed, then no adult establishments will flourish.

5. Note: presently the issue of a whether a city, in meeting its burden of proof regarding the existence of reasonable alternative avenues of communication, must analyze the length and terms of the existing leases of commercial space, is uncertain and is being litigated in the federal courts. US Supreme Court certiorari review of the Ninth Circuit court case of Lim v. City Long Beach, (9th Cir. 2000) 217 F.3d 1050.

6. The City of Stanton was only 3.5 square miles in size but limited the location of adult businesses to no closer that 1000 feet of each other (together with the other standard separation criteria for schools, parks, residential zones). However, the city planning director could not testify as to square footage of useable land within the city that was available for that use. The Court found this to be a de facto ban and invalid. City of Stanton v. Cox, (1989) 207 Cal.App.3d 1557, 255 Cal.Rptr. 682.