Update of Business Licenses for Sexually Oriented Businesses

1. TITLE 5 AMENDMENT AMENDING CHAPTER 5.45 OF THE MUNICIPAL CODE TO UPDATE BUSINESS LICENSES AND REGULATIONS RELATING TO SEXUALLY ORIENTED BUSINESSES City CouncilFebruary 25, 2019

2. Title 5 Amendment • PMC Chapter 5.45 includes regulations for various types of businesses, including sexually oriented businesses: • Definition of terms • Permit requirements • Procedures for the businesses and their employees • Hours of operation requirements • Regulations pertaining to business operations (e.g. lighting and monitoring requirements) • Prohibitions on specified conduct • Penalties • Chapter 5.45 was last updated in 2006 • Amendments are warranted to address various legal and industry developments and to modernize the definitions and regulations • Staff is also preparing amendments to Title 17 (Zoning Code) for consistency • February 27, 2019Planning Commission

3. Title 5 Amendment • Proposed Amendments • Secondary Effects Evidence • Definitions • Permitting Regulations • Administrative Appeal Hearings • Operating Regulations

4. Legal Presentation on Regulating Negative Secondary Effects of Sexually Oriented Businesses Title 5 Amendment

5. Renton v. Playtime Theatres, Inc., 475 U.S. 41, 51-52 (1986) Title 5 Amendment • “Renton was entitled to rely on the experiences of Seattle and other cities, and in particular on the ‘detailed findings’ summarized in [prior case]. • The First Amendment does not require a city, before enacting such an ordinance, to conduct new studies or produce evidence independent of that already generated by other cities, so long as whatever evidence the city relies upon is reasonably believed to be relevant to the problem that the city addresses.”

6. Courts Have Recognized a Wide Variety of Sources of Secondary Effects Evidence Title 5 Amendment • Land Use Reports • Crime Impact Reports • Judicial Opinions • Expert Reports • Anecdotal Data

7. Record: Types of Secondary Effects – Inside and Outside Title 5 Amendment • Personal, property crime, public safety risks – See, e.g., Garden Grove, CA, Los Angeles, CA, Houston, TX, New York, NY; See also 2006 City of Pasadena Secondary Effects Presentation (Richard McCleary, Ph.D. and James W. Meeker, Ph.D., (UCI)) • Lewdness, paid sexual contact, prostitution – See, e.g., Gammoh v. City of La Habra, 395 F.3d 1114 (9th Cir. 2005); Colacurcio v. City of Kent, 163 F.3d 545 (9th Cir. 1998); Pleasures Affidavits, Peppermint Garden Affidavits from Pasadena Police Department Officers

8. Record: Types of Secondary Effects Title 5 Amendment • Unsanitary conditions, potential disease – See, e.g., Ellwest Stereo Theatres, Inc. v. Wenner, 681 F.2d 1243 (9th Cir. 1982); Fantasyland Video, Inc. v. County of San Diego, 505 F.3d 996 (9th Cir. 2007) • Undesirable behavior & assaults, associated with alcohol consumption/lower inhibitions – See, e.g., California v. LaRue, 409 U.S. 109, 111 (1972); Ben’s Bar, Inc. v. Village of Somerset, 316 F.3d 702 (7th Cir. 2003); Expert Reports from Dr. McCleary

9. Title 5 Amendment • Record: Types of Secondary Effects • Negative impacts on surrounding properties – See, e.g., Dallas, TX, September 2004 Survey of Appraisers by Duncan Associates World Wide Video of Washington, Inc. v. City of Spokane, 368 F.3d 1186, 1197 (9th Cir. 2004) (upholding ordinance based in part on citizen testimony of “pornographic litter, harassment of female employees, vandalism, and decreased business, all resulting from” proximity to retail adult business)

10. Legal Rationale and Findings re: Legislative Secondary Effects Title 5 Amendment • Sexually oriented businesses, as a category of commercial uses, are associated with a wide variety of adverse secondary effects including, but not limited to, personal and property crimes (robbery, etc.), human trafficking, prostitution, potential spread of disease, lewdness, public indecency, obscenity, illicit drug use and drug trafficking, negative impacts on surrounding properties (decreased values, traffic, noise, litter, urban blight, etc.), and sexual assault and exploitation. • Alcohol consumption impairs judgment and lowers inhibitions, increasing the risk of adverse secondary effects.

11. Negative Secondary Effects Justify Licensing, Location, & Conduct Rules Title 5 Amendment • Fantasyland Video, Inc. v. County of San Diego, 505 F.3d 996 (9th Cir. 2007) (open-booth regulations and hours of operation regulations) • Tollis, Inc. v. County of San Diego, 505 F.3d 935 (9th Cir. 2007) (upholding zoning rule limiting adult uses to industrial zones) • H & A Land Corp. v. City of Kennedale, 480 F.3d 336 (5th Cir. 2007) (holding that Indianapolis and Oklahoma City studies in legislative record justify regulation of “retail-only” adult stores)

12. Negative Secondary Effects Justify Regulation of “Retail-Only” Sex Shops Title 5 Amendment • Stardust, 3007 LLC v. City of Brookhaven, 899 F.3d 1164 (11th Cir. 2018) (upholding city’s licensing and location regulations for “retail-only” sexual device shops) • HH-Indianapolis LLC v. Indianapolis-Marion County, 889 F.3d 432 (7th Cir. 2018) (upholding city’s decision that store would be “adult” despite store’s contrary indication) • Richland Bookmart, Inc. v. Knox County, 555 F.3d 512 (6th Cir. 2009) (holding that secondary effects justified regulation of “retail-only” adult store) (citing cases) • World Wide Video of Washington, Inc. v. City of Spokane, 368 F.3d 1186 (9th Cir. 2004) (upholding regulation of retail-only adult stores on secondary effects grounds)

13. Sexual Devices Not Protected by First Amendment Title 5 Amendment • Sewell v. Georgia, 435 U.S. 982 (1978); id. at 985 (Brennan, J., dissenting from denial of certiorari) (observing that “appellant fundamentally misapprehends the reach of the First Amendment in his argument that the protections of that Amendment extend to the sexual devices involved” in the case) • Heideman v. South Salt Lake City, 348 F.3d 1182, 1195 (10th Cir. 2003) (“On its face, the Ordinance applies to all ‘sexually oriented businesses,’ which include establishments such as ‘adult motels’ and ‘adult novelty stores,’ which are not engaged in expressive activity.”)

14. Stardust, 3007 LLC v. Brookhaven, 899 F.3d 1164, 1174 (11th Cir. 2018) Title 5 Amendment • “[T]he City relied on specific case examples of adult businesses “manipulating their inventory ... to avoid regulation.” • “The Code’s definition of sexual device shop may help prevent the kind of manipulation that occurred in Taylor and which the Code intends to regulate.” • “[T]he City has met its burden of showing that the definition of sexual device shop furthers its interest in regulating the secondary effects of adult businesses.”

15. HH-Indianapolis, LLC v. Indianapolis and Marion County, 889 F.3d 432, 438-40 (7th Cir. 2018) Title 5 Amendment • “There is simply ‘no First Amendment objection’ when the City exercises its zoning power to reduce the secondary effects of adult businesses, and HH has alternative avenues of communication.” • “HH does not dispute … that the City’s interest in reducing the secondary effects of adult businesses … is a sufficient or substantial interest…. Nor could it since the Supreme Court has repeatedly recognized that this is a legitimate interest.” • “The BZA did not have to believe HH when it stated it would not offer workshops or classes, nor did it have to ignore evidence from other Hustler Hollywood stores.”

16. World Wide Video of Wash. v. City of Spokane, 368 F.3d 1186, (9th Cir. 2004) Title 5 Amendment • One substantial government interest is sufficient to satisfy the constitutional test • Noting city’s reliance on appraisal information, studies, court decisions, police reports, affidavit testimony. “Here, Spokane relied on a wide variety of evidence, including studies, police records, and citizen testimony.” “Through testimonial evidence, Spokane has shown that retail-only stores generate these secondary effects and therefore that its interests in enacting the Ordinances ‘would be achieved less effectively absent the regulation.’”

17. Some Court-Approved Secondary Effects Evidence (cont’d) Title 5 Amendment Index of Secondary Effects Documentation (Nos. 1-43) • Summaries of Key Secondary Effects Documents • Criminal Justice Policy Review Article re: Secondary Effects of Retail-Only Adult Stores • Excerpts from Sex Store Statistics and Articles (PDF) (retail sex shops as hot-spots for armed robberies and related crimes) • Indianapolis-Marion County BZA Documents

18. Court-Approved Expert Findings Title 5 Amendment • Secondary effects findings confirmed by wide variety of sources. • Industry “studies” flawed: Reliance on police calls-for-service (CFS) is flawed because most vice crimes never result in a CFS. See Gammoh v. City of La Habra, 395 F.3d 1114 (9th Cir. 2005) • All subclasses of sexually oriented businesses, including retail-only, have secondary effects. World Wide Video, 368 F.3d 1186 (9th Cir. 2004) • Industry fails to negate all types of secondary effects or all sources. Fantasyland Video (noise and traffic), World Wide Video (citizen testimony)

19. Title 5 Amendment • Recommendation: • Find that the Municipal Code Amendments are exempt from the California Environmental Quality Act (“CEQA”) pursuant to the CEQA Guidelines Section 15061(b)(3) - that there is no possibility that the amendments will have a significant effect on the environment. • Introduce and conduct the first reading of an ordinance amending Chapter 5.45 of the Pasadena Municipal Code (Sexually Oriented Businesses).

20. TITLE 5 AMENDMENT AMENDING CHAPTER 5.45 OF THE MUNICIPAL CODE TO UPDATE BUSINESS LICENSES AND REGULATIONS RELATING TO SEXUALLY ORIENTED BUSINESSES City CouncilFebruary 25, 2019