Supreme Court declines to hear Charlotte adult business appeal

CHARLOTTE — After spending thousands of dollars in legal fees and years winding through the federal court system, several adult businesses have reached the end of their legal battles with the city and are being required to comply with zoning ordinances regulating adult establishments.

On Nov. 2, the U.S. Supreme Court declined to hear an appeal from Independence News, Inc. and Polo South, Inc., owner of the straight strip club Carousel Club, in a case challenging the zoning ordinances. Initiated in 2002, U.S. District Court Judge Graham Mullen decided in favor of the city.

On appeal, the U.S. Court of Appeals 4th Circuit — which hears cases from Virginia, Maryland, West Virginia and the Carolinas — also ruled in favor of the city. Their decision will stand.

The ordinance in question required adult bookstores and other establishments to be located a certain distance from other similar businesses, residential districts, schools, parks, daycare centers and churches.

The city originally passed the ordinance in an effort to decentralize and separate the locations of adult bookstores, live entertainment establishments and other businesses. At the time and in the current zoning ordinance, the city claims studies show “lowered property values and increased crime rates tend to accompany and are brought about by the concentration of adult establishments.”

When the ordinance passed in 1994, businesses were given eight years to comply with the new law, whether by changing their business, moving, or applying for a zoning variance. A week before that deadline in 2002, the lawsuit challenging the ordinance was filed by Independence News, Polo South, the now-closed Central Avenue Video, Riverside Video Plus and O’Shields Entertainment, owner of the gay strip club Chasers, located next to Independence News on The Plaza. The businesses argued the zoning ordinances violated First Amendment protections.

When federal judges at the district level decided in favor of the city, Independence News and Polo South appealed the decision. Identified in district court documents as a plaintiff, Court of Appeals documents show O’Shields Entertainment signed on to intervene on behalf of Independence News’ and Polo South’s appellate case.

In oral arguments made before the court on March 27, the businesses said the city had not proven their businesses were linked to an increase in crime or reduction in property values.

Independence News owner Roger Moore told Q-Notes the evidence the city used to pass and defend the ordinance did not apply to him.

“The whole reason for the city’s action to rezone was because they said these businesses were linked to increased crime and drove down property values,” he said. “We presented evidence that it does not. This neighborhood, NoDa, has gone uphill and it has exploded over the past few years. People are buying up houses left and right, renovating them and building condos all around me. Property values are probably double now than what they used to be. I have no crime here at this store, except for a robbery years ago.”

Court documents show the plaintiffs presented evidence that showed “no adverse secondary effects” arose in the areas surrounding their businesses after the ordinance’s enactment in 1994.

The appellate court’s June 3, 2009, opinion reads: “In particular, Independence News and Polo South alleged that, during the nine year period following the [ordinance’s] enactment, property values had held steady or generally increased in the area surrounding their establishments; no sex related crimes had occurred in the area, and crime in general had not increased in the area as of result of their adult establishments.”

Such data, the businesses argued, could be used to challenge the city’s original “theoretical justification” for the ordinance. The three judge appellate panel disagreed.

“Appellants are quite right that the Supreme Court has indicated that cities ‘must be allowed a reasonable opportunity to experiment with solutions to admittedly serious problems,’” Chief Judge Karen Williams, a native of South Carolina and the first female judge on the U.S. Court of Appeals 4th Circuit, wrote on behalf of the court. “Although these statements conceivably could be read, as Appellants read them, to imply that a city’s secondary effects rationale for enacting a zoning ordinance like the [adult business ordinance]…may be subject to a challenge based on post-enactment data, we are not aware of — and Appellants do not point us to — any Supreme Court or federal appellate court opinion allowing such a challenge.”

Compliance

Moore said he’ll likely have to move or change his business in order to comply with the ordinance. He expects the city to send him a compliance letter soon. City attorney Bob Hagemann said he believed the Charlotte-Mecklenburg Planning Department mailed letters to each of the affected businesses at the beginning of the month.

Chasers owner Donald O’Shields said he’s already received the letter from city zoning administrator Katrina Young.

In a copy of the letter provided to Q-Notes by O’Shields, Young writes the company will have until Dec. 30 to bring Chasers into compliance with the city ordinance. Adult businesses in violation of the ordinance can face fines up to $500 per day, 30 days imprisonment or civil injunctions.

O’Shields plans on making few changes to Chasers’ operations.

“The only thing Chasers is doing that makes us a sexually-oriented business is that strippers are showing their buttocks. We’re going to be able to pull ourselves into compliance by having them wear bathing suits or underwear — anything that covers the two butt cheeks.”

State and local laws already prohibit male strippers from exposing pubic hair or genitals.

O’Shields said he refuses to shut down, but fears the changes will hurt business.

“I’m going to make sure Chasers can keep going as close to what it is as I can do,” he said. “They aren’t going to shut us down. It will upset business, unfortunately, but the only thing that has to be different is what the dancers have on.”

Variance process unfair?

Moore thinks the city’s decisions on zoning and variances — or exceptions to zoning ordinances — aren’t handled fairly.

“These Adam & Eve stores, Priscilla’s and Red Door — none of them are any different from my business except they have some lingerie,” Moore said. “They carry the same toys, the same DVDs — they carry everything.”

In the late-1990s, Independence News unsuccesfully applied for a variance.

Fred Frazier, who owns the real estate where Independence News and Chasers are located, says a bar of some type has operated there since the 1950s. He said other properties with closely-placed adult establishments have been given variances in the past.

On Independence Blvd., Adam & Eve and Red Door stores are in the same shopping center with the Crazy Horse strip club.

As landlord, Frazier is worried about the impact on his property.

“They aren’t just taking aim at [Moore] and [O’Shields], they are taking aim at me also,” he said. “I can’t do a daycare or kiddy care after a bookshop has been there. Who’s going to pay me for the loss of [Moore’s] lease?”

Hagemann, who has worked on the lawsuits for the city, said it is time for affected business to follow the law.

“We’ve been in court with them since 2000 or 2002 with litigation at the trial court level to the Supreme Court,” Hagemann said. “The courts have ruled. They lost. They need to comply with the ordinances.”

Frazier said he’ll fight to keep his tenants.

“I’ll do everything that I can to keep my tenants in those properties,” he said. “They’ve been good, I’ve had no problems and there have been no police calls.”

He added, “I’ll do everything I can for my property rights, because they are my tenants. I appreciate the people who work there.”