Legal Memorandum LU03


MUNICIPAL REGULATION OF ADULT USES

Constitutional Background

Municipal zoning regulation of adult business may be locally popular, but it raises serious constitutional issues when the regulation is directed at free expression protected by the federal and state Constitutions. Non-obscene expression, whether in the form of sexually explicit books, magazines, movies, or dancing, has traditionally been found to be entitled to such constitutional protection. When municipal regulations impinge on an adult business's freedom of expression, they lose the presumption of constitutionality that normally applies to zoning regulations, and the burden shifts to local governments to justify the restrictions.

In order to avoid constitutional problems, zoning regulations pertaining to adult uses must be drafted with skill and precision. Prior to adopting such zoning, a local government must usually show that it conducted or relied upon planning studies evidencing the need to protect neighborhoods from the harmful secondary effects of adult businesses. Some studies have identified such adverse secondary effects as urban blight, decreased retail shopping activity and reduced property values. However, courts will strike down regulations that seek to exclude all adult uses through an outright ban. Therefore, adult uses may be restricted (even substantially) within a community through zoning regulations, but may not be entirely prohibited.

Municipalities drafting adult use zoning legislation typically choose between two zoning techniques, which either: 1) concentrate adult uses in a single geographic area of the locality or 2) disperse adult uses using distance requirements. By concentrating adult uses in a specific area of the community, some municipalities believe these uses will affect fewer neighborhoods and can be avoided by persons who are offended by them. Other municipalities have taken the opposite approach and require that sexually oriented uses be separated from one another or from residential areas. By preventing a concentration of these uses, a municipality may attempt to avoid a "skid-row" effect.

In City of Renton v Playtime Theaters, 475 US 41, 89 L Ed 2d 29, 106 S Ct 925 (1986), the United States Supreme Court a four (4) part test for determining when it is permissible to use zoning to single out adult uses without violating the First Amendment of the US Constitution. In determining the constitutional validity of a zoning regulation, courts must consider whether:

1. The predominant purpose of zoning is to suppress the sexually explicit speech itself, or rather, to eliminate the "secondary effects" of adult uses;
2. The zoning regulation furthers a substantial governmental interest;
3. The zoning regulation is "narrowly tailored" to affect only those uses which produced the unwanted secondary effects; and
4. The zoning regulation leaves open reasonable alternative locations for adult uses.

This paper will focus on two New York Court of Appeals cases - Stringfellows I and II - which applied the federal constitutional test in Renton and delineated rules for cases relying on Article 1, Section 8 of the New York State Constitution1, the free speech provision.

The New York City cases

In 1993, the New York City Division of City Planning conducted an "Adult Entertainment Study" to determine the nature and the impact that adult businesses had in the City. In addition, the City examined similar studies conducted in nine other localities. The City study concluded that, in the areas where they are concentrated, the presence of adult businesses tends to produce negative secondary effects such as increased crime, decreased property values, and reduced shopping and commercial activities.

In October 1995, in response to this study, the New York City Council amended its zoning regulations to place restrictions on the location and size of adult businesses. The zoning amendments were intended to break the concentration of adult businesses in certain neighborhoods by dispersing them.

The New York City zoning amendment applies to various types of "adult establishments" including adult bookstores, adult theaters, adult restaurants, and other adult commercial establishments. The definition of what is an "adult" business is keyed to the character of the activity that takes place in such establishments. If the business regularly features movies, photographs, or live performances that emphasize "specified anatomical areas" or "specified sexual activities" and excludes minors by reason of age, it is considered "adult" and therefore covered by the zoning restrictions.

The New York City zoning amendment does not ban adult establishments outright. Rather, it limits the permissible zones or districts in New York City where they may operate, and terminates those businesses that are not located in those permitted districts. Adult uses are only allowed in a number of commercial and manufacturing districts. The zoning amendment specifically requires that, where permitted, adult establishments: (1) must be located at least 500 feet from a school, house of worship, day care center, or residential district; (2) must be located at least 500 feet from any other adult establishment; (3) must be limited to one establishment per zoning lot; and (4) must not exceed 10,000 square feet of floor space. By confining them to industrial and commercial districts and separating them within those districts, New York City used both concentration and distance requirements to control adult uses.

Any adult establishment operating in a zoning district where adult uses are prohibited must either conform to the new zoning or terminate its business within one year of the amendment's effective date. Narrow exceptions exist to this termination requirement for existing businesses which are not in compliance. Also, adult establishments faced with the one-year termination deadline may apply for an extension to the Board of Standards and Appeals, which may permit the applicant to remain open for a limited time to amortize any substantial and unrecovered costs associated with the adult portion of the establishment.

In the case of Stringfellow's of New York, Ltd., v City of New York (“Stringfellows I"), 91 N.Y.2d 382 (1998), Several adult businesses and their patrons brought three actions, consolidated by the lower court, challenging the NYC zoning regulation pertaining to adult establishments. They contended that since the NYC zoning amendment defines adult establishments as those allowing the exhibition of "specified anatomical areas" or "sexual activities," it is a content-based regulation that unlawfully suppresses expression. They claimed it was presumptively invalid under Article 1, Section 8 of the New York State Constitution.

The New York State Court of Appeals disagreed. While recognizing that municipalities possess considerable authority to enact zoning to improve the quality of their residents' lives, the Court noted that zoning authority is not unfettered. Zoning regulations that aim to curb "adult" uses implicate speech or conduct that is protected by Article I, Section 8 of the New York State Constitution. Consequently, in weighing the validity of such zoning regulations, courts must consider the constitutional values of free expression.

The Court developed a hybrid test, using state and federal constitutional standards, for determining whether zoning regulations are valid under Article 1, Section 8 of the New York State Constitution.

1. The zoning regulation must be justified by concerns unrelated to speech;
2. It must be "no broader than necessary" to achieve its purpose and
3. It must provide alternative locations for adult use businesses.

When existing adult businesses are rendered non-conforming by subsequent zoning amendments and directed to terminate operations, courts must additionally consider whether the amortization provisions allow for reasonable recoupment of the investment in the business.

1. The Zoning Regulation's Purpose Is Unrelated to Speech

As a threshold issue, the Court focused on whether the City's zoning amendments were purposefully directed at controlling the content of the message conveyed through adult businesses or were instead aimed at an entirely separate societal goal. The federal constitutional analysis requires examination of the ordinance's "predominant purpose," while the State constitutional inquiry focuses on whether there has been "a purposeful attempt to regulate speech." The difference in language between the federal and state tests, however, did not significantly affect the outcome, since it was apparent from the legislative history that eliminating the negative secondary effects of adult uses was the City's goal.

Before enacting the zoning amendment, the City Council assembled an extensive legislative record connecting adult establishments and negative secondary effects, including numerous studies on the effects of adult establishments both within and without New York City. The Court found that New York City properly relied on studies from other jurisdictions:

"While none of the other studies considers a municipality which duplicates New York City in terms of variety of neighborhoods and built conditions, * * * the findings of adverse secondary effects and the conditions found in these other studies are relevant to the different neighborhoods of New York City."

In view of the legislative record upon which the City Council rested its decision to regulate adult uses, enactment of the zoning amendment was not an impermissible attempt to regulate the content of expression but rather was aimed at the negative secondary effects caused by adult uses, a legitimate governmental purpose.

As to the content of the City's regulation, the Court said:

"Nor is it significant that definitions of adult uses in the Amended Zoning Resolution are based in part on the content of the entertainment offered rather than exclusively on the age of the businesses' clientele (cf., Town of Islip v Caviglia, supra, at 557). The test under both Islip and Renton is not whether the regulated establishments are defined without reference to content but whether the ordinance's goal is unrelated to suppressing that content. That test is plainly met here." (Emphasis added.)

2. The Zoning Amendment Is No Broader Than Necessary

The Court next held that the City's zoning amendment represents a coherent regulatory scheme narrowly designed to attack the problems associated with adult establishments. The zoning amendment must set forth explicit standards for those who apply them to preclude arbitrary and discriminatory application. The amended zoning must affect only the category of uses that produce the unwanted negative effects. By preventing adult businesses from locating in residential districts while allowing such establishments to locate in manufacturing and commercial districts, the Court found the amendment protects only those communities and community institutions that are most vulnerable to their adverse impacts. Municipalities may constitutionally bar adult establishments from, or within, a specified distance of residentially-zoned areas and facilities in which families and children congregate. Moreover, zoning regulations may be used to prohibit an adult business from operating within a specified distance of another in order to avoid the undesirable impacts associated with concentration of such uses.

3. Reasonable Alternative Avenues of Communication

To further satisfy constitutional requirements, the City needed to assure reasonable alternative avenues of communication. In particular, there must be (1) ample space available for adult uses after the rezoning and (2) no showing by the challenger that enforcement of the ordinance will either substantially reduce the total number of adult outlets or significantly reduce the accessibility of those outlets to their potential patrons.

In determining whether proposed relocation sites are part of an actual business real estate market, the courts have considered such factors as their accessibility to the general public, the surrounding infrastructure, the likelihood of their ever realistically becoming available and, finally, whether the sites are suitable for "some generic commercial enterprise."

In the case of New York City, the zoning amendment's enforcement will lead to the forced relocation of some 84% of the City's 177 adult businesses. Given the extent of the dislocation, it was incumbent upon the City to demonstrate that sufficient alternative sites were available. The City asserted that the space available for adult uses constituted over 11% of the City's total land area and about 4% when reduced by land encumbered by properties that are unlikely to be developed for commercial use. City officials asserted that the amended zoning code leaves at least 500 potential sites available for adult use relocation. All of the areas in Manhattan zoned for adult use and at least 80% of the land area in the other boroughs are within a 10-minute walk from a subway line or a major bus route. The Court concluded that the City satisfied its burden of showing that the space zoned for adult uses is adequate to accommodate the 177 existing adult businesses.

In their response, the adult businesses failed to make concrete allegations as to precisely how many of the 500 potential receptor sites identified by the City were unavailable. The criticisms raised by the adult businesses about various individual sites did not provide an adequate counter to the City's supported claim that, as a whole, there are more than enough receptor sites to accommodate the existing adult entertainment industry. Any future challenge to a similar zoning plan would need to analyze, with particularity and specificity, the sufficiency of alternative locations zoned for adult businesses.

4. Termination and Amortization

Finally, the Court rejected the claim that enforcement of the zoning amendment would lead to an unconstitutional taking because substantial investments in the businesses would be lost if they are required to relocate. The Court said that no taking claim existed because the zoning amendments provide for hardship extensions. Under these provisions, a nonconforming adult establishment may apply to the Board of Standards and Appeals for permission to continue to operate beyond the one-year amortization period set forth in the statute where it can show that it has made substantial expenditures related to the adult use, that such expenditures cannot be recouped within a year and that the requested extension is the minimum period necessary to permit such recoupment.

Stringfellows II
Some adult businesses have tried some novel approaches to avoid having to comply with New York City’s adult zoning restrictions. In a case that generated a good deal of publicity, City of New York v. Stringfellow's of New York, and Ten's World-Class Cabaret (“Stringfellows II"), 96 N.Y.2d 51 (2001), the Court of Appeals held that topless entertainment club could not admit minors to avoid being defined as an adult business under the New York City zoning regulations.

Under the City’s zoning, a business is considered “adult” if it regularly features movies, photographs, or live performances that emphasize "specified anatomical areas" or "specified sexual activities" and is not customarily open to the general public during such features because it excludes minors by reason of age. In order to circumvent the City’s zoning law, Ten Cabaret instituted a policy of admitting children, accompanied by a parent, if both sign statements that the child will not smoke or drink alcoholic beverages and will not be harmed by seeing "expose d female breasts." By allowing children onto its premises, Tens argued it was not an “adult” business.

Supreme Court Justice Crane agreed and ruled that Ten’s adult cabaret was not subject to the City’s zoning law since it did not exclude minors by reason of age2. The Appellate Division reversed Justice Crane3 and the Court of Appeals affirmed. The Court ruled that Ten’s was attempting to make “an end run” around the City zoning law. It said that the letter of a statute will not to be slavishly followed when it leads away from the true intent and purpose of the legislation and statutes are not to be read with literalness that destroys meaning, intention, purpose or beneficial end for which the statute has been designed. As a matter of policy, it certainly highly inappropriate to encourage adult businesses to allow minors to enter their establishment, simply to circumvent the Zoning.

Conclusion

In conclusion, the Court of Appeals held that New York City's effort to address the negative secondary effects of adult establishments is not constitutionally objectionable under any of the applicable federal or state constitutional standards. The Stringfellows decisions are an important adult use case for claims brought under the New York State Constitution.


Footnotes

1. Article 1, Section 8 of the New York State Constitution provides in pertinent part: "Every citizen may freely speak, write and publish his sentiments on all subjects, being responsible for the abuse of that right; and no law shall be passed to restrain or abridge the liberty of speech or of the press."

2. City of New York v. Stringfellow's of New York, 11/10/98 N.Y.L.J. 26 (col. 1)

3. 253 A.D.2d 110 (1st Dept. 1999). The matter was remanded to Justice Crane, who subsequently granted the City of New York partial summary judgment on the issue of whether defendant's cabaret falls within the definition of adult eating or drinking establishment contained in New York City Zoning Resolution. On appeal, the Appellate Division affirmed. 268 AD2d 216.