Petition for Writ of Certiorari — Kismet Investors, Inc. v. County of Benton

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US e

Court,

001305 Fep 13 200

No. 01

OFFICE OF

THE CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

Kismet Investors, Inc., a

Minnesota corporation,

Petitioner,

VS.

County of Benton,

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE SUPREME COURT OF MINNESOTA

PETITION FOR WRIT OF CERTIORARI

RANDALL TIGUE LAW OFFICE, P.A.

Randall D.B. Tigue, Esq.

Atty ID No. 110000

2940 Pillsbury Avenue South

Suite No. 9

Minneapolis, MN 55408

612/825-0936

Attomey for Petitioners

ESTI PRESE D

1. Is a governmental agency’s judgment

concerning adverse secondary effects caused by sexually

oriented businesses, when based upon data that is unreliable and

outdated, forever immune from constitutional scrutiny,

regardless of whatever contrary substantive evidence may arise?

rs Did the court properly grant summary judgment

on the issue of whether the remedy chosen to regulate adverse

secondary effects was itself narrowly tailored so as to prevent

such adverse secondary effects, in light of unrefuted evidence

that the remedy, if implemented, not only would not ameliorate

secondary effects but would exacerbate them?

3. Can an ordinance regulating sexually explicit

entertainment comply with the requirement that it make

available alternative avenues of communication when the

undisputed evidence indicates that all locations were available

only at the discretion of the County Planning Commission?

arr

TABLE OF CONTENTS

Corporate disclosure statement

Opinions below

WEE wn eee eee 2

Constitutional and statutory provisions involved ........ 2

Statement of the case.............. ee ae ee

Reason for granting the wnt ..................00.. 1]

I. A substantial constitutional question exists as to

whether the Minnesota courts erred in granting summary

judgment to the county on the issue of whether its zoning

ordinance was “narrowly tailored” to those uses found to cause

adverse secondary effects, in light of substantial and largely

uncontradicted evidence that no such effects were caused by

Potisiomer’e wee... cs os 4 eee 1]

A. Petitioner’s use is presumptively entitled to

protection of the First and Fourteenth Amendments to the

United States Comming . onc penn cacnctaseees ll

B. Given the substantial evidentiary showing that

Petitioner’s use caused no adverse secondary effects, the

decision to grant summary judgment to uphold the

validity of this ordinance is in clear violation of applicable

decisions of this Court and of at least one other United States

ROMO 5 oo occ cass ccccecccee......., 12

Il. A substantial question exists as to whether the

Ordinance, if implemented, would have the effect of

ameliorating adverse secondary effects........... 24

Ill. The ordinance would have the effect of suppressing or

greatly limiting access to constitutionally protected speech in

violation of the First and Fourteenth Amendments to the United

StatesConstitution .......... sis 26

Conclusion ...........__.. 09-8, SP ee en eee . 28

lil

TABLE OF AUTHORITIES

CONSTITUTIONAL PROVISIONS:

U.S. Constitution Amendment] ................ passim

U.S. Constitution Amendment 14 ............... passim

STATUTES:

Title 28 U.S.C. Sec. 1257(a) ................ access 2 |

pg tk oD err ee rrere rrr rer rare 2 )

BENTON COUNTY ORDINANCES:

Benton County Ord. Sec. 4.2.1 ..................... 4 |

ambom Commty Cid... B06. 7.00.2. cc ec acees 4 |

; .Benton County Ord Sec. 7.10.3 .................... 4 |

man Cor Ge.. BOG. GF og ccc csenaeanes’s 9

CASES:

Alameda Books, Inc. v. City of Los Angeles, 222 i

owl. te 21, 23

Barnes v. Glen Theater, Inc., 501 U.S. 560 (1991) .. 11, 12 |

Bukaka, Inc. v. County of Benton, 852 F. Supp. 807

Se ee Sk cow aa ea cddan ve OEE eka ces Glee 2

California v. LaRue , 409 U.S. 109(1972) ...... 1]

City of Erie v. Pap’s A.M., 529 US. , 120

S.Ct. 1382(2000) 0... 12, 17, 24

City of Lakewood v.Plain Dealer Publishing Co., 486

ae TOO 6s onc oo 28

City of Renton v. Playtime Theaters, Inc., 475 US.

ia cia MITEL eT Te ns, 12, 13

Doran v. Salem Inn, Inc., 422 U.S. 922 i np 1]

Forsyth County,Ga vy. Nationalist Movement, 505

Oe CRO ia ee, 28

Janra Enterprises, Inc. v. City of Reno, 818 F. Supp. 136]

ettaadiaae ET 14

Kismet Investors, Inc. v. County of Benton,

617 N.W. 2d 85 (Minn. ee 1]

Lady J Lingerie v. City of Jacksonville, 176 F. 3d 1358

RO, TON os cesge 28

Mga Susu, Inc. vy. C ounty of Benton, 853 F. Supp.

1147 (D. Minn. dap bl sy ees a 3

New Jersey Citizen Action vy. Edison Township, 797 F.

2d 1250 (3rd Cir. aan, SOT POC ae PEP Aart S 16

Pennsylvania Alliance Jor Jobs & Energy y.

Council of the Borough of Munhall, (PAJE),

TSS F. BB WB GBC. FED oc kccsctccsecicssess: 16

Police Department of Chicago v. Mosley, 409 U.S.

ot Pr nmr er ry et 12

Pringle v. City of Covina, 1S Cal. App. 3d 151, 171

Col. Sime, SIGE Use scene 14

Regen v. Time, Inc., 468 U.S. 641 (1984) ............ 12

Schad v. Borough of Mt.Ephraim, 452 U.S. 61 (1981) .. 11

Sebago, Inc. v. City of Alameda, 2\\ Cal. App. 3d 1372,

259 Cal. Rptr. 918 (1989), rev. denied, (Cal. 1989) .......... 14

Texas v. Johnson, 491 U.S. 397 (1989) .............. 12

Tollis, Inc. v. San Bernardino County, 827 F. 2d

ESED GG. GOON iv caine nsascsasseveeueere 14, 21, 22

Town of Islip v. Cavigilia, 73 N.Y. 544, 540 N_E.

26 SIS CISD oc vccectescinscssane eee 25

University Books and Videos, Inc. v. Metropolitan

Dade County, 33 F. Supp. 2d 1364 (S.D. Fla. 1999) .... 28

University Books and Videos, Inc. v. Metropolitan

Dade County, __ F. Supp. 2d_(S.D.Fla January 25,

United States v. Carolene Products Co., 304 U.S.

FR eee aa 16

World Wide Video v. City of Tukwila, 17 Wash. 2d 382,

816 P. 2d 18 (1991), cert. denied, U.S.__., li2 S.Ct. 1672,

eG I nines ccccecbavascecnupaukecwdss 14

XLP Corp, v. County of Lake, _NE.2d____, 2000

W.F. 33156447 (Ill. App. 2d Dist. 2000). ................ 28

Young v. American Mini Theaters, 427 U.S. 50 .. 12, 13, 26

CORPORATE DISCLOSURE STATEMENT

Petitioner in the above-entitled matter is Kismet

Investors, Inc. , a Minnesota corporation. There is no parent or

publicly held company owning more than 10% of the

corporation’s stock.

All parties to the proceeding are listed in the caption.

OPINIONS BELOW

Kismet Investors, Inc., respectfully petitions for a writ

of certiorari to review the decision of the Supreme Court of

_ Minnesota, issued November 15, 2000, Appendix at A.1,

denying Petitioner’s petition for a review of the decision of the

Minnesota Court of Appeals, issued September 12, 2000.

The order of the Minnesota Supreme Court is

unpublished. The decision of the Minnesota Court of Appeals,

which the Minnesota Supreme Court refused to review, is

reported at 617 N.W. 2d 85 (Minn. App. 2000). The opinion

is set forth in the A.appendix at A.2-A.24. The Minnesota

Court of Appeals’ opinion affirmed two decisions of the State

District Court, Seventh Judicial District, the first, entered July

7, 1999, granting partial summary judgment to Respondent, and

the second, entered December 22, 1999, dismissing Petitioner’s

complaint after a trial. Both District Court opinions are

re ~

«sg,

ee ee

unpublished and are set forth in the appendix at A.25-A.75.

JURISDICTION

The Minnesota Supreme Court issued its order on

November 15, 2000, denying a timely petition for further

review of a decision of the Minnesota Court of Appeals.

Jurisdiction of this Court is invoked pursuant to Title 28 U.S.C.

Sec. 1257(a).

CONSTITUTIONAL AND STATUTORY PROVISIONS

INVOLVED

Constitution of the United States, Amendment 1.

The First Amendment to the United States provides, in

pertinent part: “Congress shall make no law...abridging the

freedom of speech or of the press...”

Constitution of the United States, Amendment 14.

The Fourteenth Amendment to the Constitution of the

United States provides, in pertinent part: “...nor shall any State

deprive any person life, liberty, or property without due process

of law...”

Title 42 U.S.C. Sec. 1983.

Title 42 U.S.C. Sec. 1983 provides, in pertinent part:

“Every person who, under color of state laws...subjects or

causes to be subjected, any citizen to the deprivation of any

rights, privileges or immunities secured by the Constitution and

law, shall be liable to the party injured in an action at law.”

Because of its voluminous nature, the Benton County

Adult Use Ordinance is set forth in the appendix at A.87-A.96.

STATEMENT OF THE CASE

Since January 2, 1997, Petitioner Kismet Investors, Inc., a

Minnescta corporation, has operated a business known at “King’s on

the Lake” in unincorporated Benton County.' The business features

live non-obscene nude dance entertainment.

The business itself has operated since September of 1993.

When King’s first opened for business, Respondent Benton County

sought its closure pursuant to the conditional use permit requirement

in its Development Code, only to be enjoined, both temporarily and

permanently by the United States District Court by the District of

Minnesota. See Bukaka, Inc. v. County of Benton, 852 F. Supp. 807

(D. Minn. 1993), and Mga Susu, Inc. v. County of Benton, 853 F.

Supp. 1147 (D. Minn. 1994).

The following year, the county enacted Ordinance No.

242, a copy of which is set forth in the appendix at A.87-A.96,

zoning so-called “adult uses.” Section 7.10.2 of the ordinance

required adult uses to be located in the areas zoned B, B-2, I-1

1See complaint, paragraphs 3 and 4, Appendix A.3-A.4.

— =

and I-2 provided they are not located within 500 feet of

residentially zoned property, a school, church, day care facility,

hotel or motel, or public park. Appendix at A.94-A.95.

| Petitioner’s use was in an area zoned B, in which adult

uses were permitted, but was located within 500 feet of

residentially zoned property. Id at A.32.

Ordinarily, uses which were legal at the time the zoning

code was enacted or amended are permitted to remain

permanently as non-conforming uses.2 However, under Sec.

7.10.3 of Ordinance No. 242, all non-conforming adult uses

were required to cease operation as of July 31, 1998.’

“After the decisions of the United States District Court

rendering the King’s Inn a lawful use in Benton County, and

prior to the enactment of the restrictive zoning ordinances,

Petitioner’s predecessor in title made substantial improvements

to the premises on which King’s Inn was located, essentially

rendering the premises useless for any purposes other than an

adult entertainment establishment. These improvements include a

custom-built roof, which eliminated the ventilation system necessary

2See Benton County Zoning Ordinance 4.2.1, Appendix at

A.97-A.99..

3See Id. at A.95.

to allow the building to continue its previous use as a restaurant; a

custom-built stage costing at least $63,000, situated immediately

below the custom-built roof, useful for no other purpose other than

adult entertainment; within the roof, a dome conatining custom-made

lighting, speakers, and sound system, focused directly on the stage,

costing in excess of $80,000; a security and monitoring system

focused on the stage and surrounding audience area, costing in the

neighborhood of $43,000; a D.J. booth and wiring system into the

sounds amplification system in the roof area, costing in excess of

$50,000 (Appendix at A.263-A.279).

In reliance upon the extreme hardship which compliance

with the amortization provision ordinance would entail,

Petitioner on July 22, 1998, filed with the Benton County Board

of Adjustments an application for a variance from the 500-foot

setback requirement from residentially zoned property. In

support of the variance application, Petitioner presented not

only the uncontradicted evidence of the extreme hardship that |

enforcement of the amortization provision would cause for the |

subject property, but also the uncontradicted report of Planning ;

Consultant R. Bruce McLaughlin, indicating that in its five years

of operation, the King’s Inn had caused virtually none of the

adverse secondary effects which this Court has held to

constitutionally justify zoning restrictions on adult

entertainment.* For example, the McLaughlin report pointed

out that in its five years of existence, property values around

King’s Inn increased at double the rate of unincorporated

Benton County as a whole, and more than four times as fast as

a comparable control use, Pirate’s Cove, located on the same

highway, not featuring adult entertainment (Appendix at A.232-

A.242) With respect to crime in the surrounding area, the

McLaughlin report pointed out that in its years of existence,

King’s on the basis of area and seating capacity, generated

fewer police calls than Rumor’s Bar, an alcohol establishment

nearby, and absolutely fewer police calls than a local gas station

and convenience store. The report indicated absolutely no sex

offenses or drug crimes at King’s. Id. at A.225-A.231.°

Despite the overwhelming evidence in support of the petition,

the Benton County Board of Adjustments denied the variance

application of October 15, 1998. See appendix at A.84-A.86.

On October 23, 1998, Petitioner commenced the present

action in Benton County District Court, seeking judicial review

4See for example, Young v. American Mini-Theaters, 427

U.S. 50 (1976), and City of Renton v. Playtime Theaters,

Inc., 475 U.S. 41 (1986).

5McLaughlin’s statistical analysis of secondary effects of

King’s: is uncontradicted on this record.

of the variance denial, and challenging the constitutional

validity, under the First and Fourteenth Amendments to the

United States Constitution, of Ordinance No. 242.°

Contemporaneously with the summons and complaint,

Petitioner filed a motion seeking temporary injunctive relief.

In support of the motion for temporary injunction,

Petitioner tendered the affidavit of Richard Wilson, Appendix

at A.120-A.127, stating, inter alia, that virtually all of the studies

that found in particular that nude dance establishments caused adverse

secondary effects date back to the 1970's or early 1980's. He points

out that during this period of time the nude dance club industry was

vastly different than it is now. He points out that during this period

of time, nude dance establishments consisted basically of rather sleazy

topless bars, poorly maintained and poorly operated, at which most

people would not wish to be seen. He points out that over the past 15

years, the industry had dramatically changed and that the sleazy strip

bar is gradually going out of existence, to be replaced by what he calls

an upscale adult cabaret. He points out that such establishments

generally emphasize hospitality and safety of customers. They are

6The complaint is set forth in the Appendix A100-A119. Since the

denial of the variance is exclusively a matter of state law, Petitioner does

not seek review of the validity of the denial of the variance. Rather,

review is limited to the constitutionality, under the First and Fourteenth

Amendments, of Ordinance No. 242, both facially and as applied.

}

‘

characterized by expensive buildings, with substantial investments in

high technology equipment such as lighting, sound, and security. .

The Wilson affidavit points out that far from causing property values

to decline and crime to increase, the upscale adult cabaret generally

enhances property values in the surrounding community and

contributes to public safety. He points out that the “adverse

secondary effects” such as a decline in property value and an increase

in crime are as abhorrent to an upscale adult cabaret operated as they

would be to any other business, because they would scare away the

very clientele the upscale cabaret is seeking.

The Wilson affidavit further points out that, based upon on

personal observation and upon the nature of the equipment and

improvements made to the King’s Inn, King’s is far more like the

upscale adult cabaret then it is a sleazy strip bar (Id. at A.488).

On July 7, 1999, the District Court, by Judge Hoolihan,

issued findings of fact, conclusions of law, and an order

granting partial summary judgment,’ upholding the

constitutional validity of ordinance No. 242, insofar as the

factual predicate for its enactment was concerned. The order

set for trial the issue of whether the ordinance allowed for

adequate alternative avenues of communication.

7A copy of the order is set forth in the Appendix at A.48-

A7S..

A file on those issues was held before Judge Hoolihan,

sitting without a jury, on November 12, 1999. At that trial, Ron

Peterson, director of the Benton County Department of

Development, testified that given the area in which adult uses

are permitted, and given the setback requirements from

residential areas, churches, schools, daycare centers and parks,

some 101 sites were available within unincorporated Benton

County for adult entertainment uses (T.22). However, on cross-

examination, Peterson conceded that anytime a land owner would

convert from one land use to another, Peterson’s office would want

to review that use for compliance with zoning laws, especially if a

commercial use, such as a restaurant, were to convert to an adult

entertainment use (T.51). On cross-examination, Peterson conceded

that at least part of the review that would be triggered was compliance

with the county’s off-street parking requirements.* The off-street

parking requirements, set forth in the Development Code, introduced

as Exhibit 2 at trial provides, in Sec. 9.2.1, Subparagraph C,

“Required off-street parking spaces shall be provided as determined

by the County Planning Commission.” T.45.

Consequently, Peterson conceded that, to the extent that the

Planning Commission has the absolute authority to set off-street

8On two separate occasions, Peterson admitted that unless

the proposed use complied with off-street parking

requirements, the use would not be permitted. See T.44.

parking spaces in its discretion, and prevent the establishment of any

use which does not meet those requirements, all 101 locations are

available to adult businesses, only in the discretion of the Planning

Commission. (T.47).

On this basis, Appellant’s expert, Florida planner Robert

Bruce McLaughlin , disqualified all available sites, testifying as

follows:

“There is absolutely nothing anywhere in the code

that prohibits the Planning Commission from saying

if you’ve got a 100 acre site, you need 100 acres and

350 square feet for parking. If you’ve got 200 acres,

you need 200 acres plus 350 square feet for parking.

If you’ve got 640 acres, you need 640 acres plus 350

feet of parking. There is nothing in the code

anywhere to prevent them from doing that.” T.98.

In its opinion, the District Court held that the Benton County

ordinance provided adequate sites for location of adult businesses,

notwithstanding the fact that all of those sites were available only at

the County Planning Commission’s discretion. Appellant’s Appendix

at A.33-A.35.

On September 12, 2000, the District Court’s decision

was affirmed by the Minnesota Court of Appeals, (Appendix at

A.2-A.24, Kismet Investors, Inc. v. County of Benton, 617

N.W. 2d 85 (Minn. App. 2000).

On November 15, 2000, the Minnesota Supreme Court

denied Petitioner’s petition for further review.

REASON FOR GRANTING THE WRIT

L A SUBSTANTIAL CONSTITUTIONAL

QUESTION EXISTS AS TO WHETHER THE

MINNESOTA COURTS ERRED IN GRANTING

SUMMARY JUDGMENT TO THE COUNTY ON THE

ISSUE OF WHETHER ITS ZONING ORDINANCE WAS

“NARROWLY TAILORED” TO THOSE USES FOUND

TO CAUSE ADVERSE SECONDARY EFFECTS, IN

LIGHT OF SUBSTANTIAL AND LARGELY

UNCONTRADICTED EVIDENCE THAT NO SUCH

EFFECTS WERE CAUSED BY PETITIONER’S USE.

A. PETITIONER’S USE IS PRESUMPTIVELY

ENTITLED TO PROTECTION OF THE FIRST AND

FOURTEENTH AMENDMENTS TO THE UNITED .

STATES CONSTITUTION.

This Court has clearly and repeatedly held nude dancing

to be an activity presumptively entitled to protection under the

Free Speech Clause of the First Amendment to the United

States Constitution. See for example, California v. LaRue, 409

U.S. 109 (1972); Doran v. Salem Inn, Inc., 422 U.S. 922

(1975); and Schad v. Borough of Mt.Ephraim, 452 U.S. 61

(1981). In Barnes . Glen Theater, Inc., 501 U.S. 560 (1991),

8 of the 9 Justices of this Court reaffirmed the entitlement of

ee ee ee

12 -

nude dancing to First Amendment protection as did a majority

of this Court in the more recent decision of City of Erie v.

Pap’s A.M., 529 U.S.___, 120 S.Ct. 1382 (2000).

B. GIVEN THE SUBSTANTIAL

EVIDENTIARY SHOWING THAT PETITIONER’S USE

CAUSED NO ADVERSE SECONDARY EFFECTS, THE

DECISION TO GRANT SUMMARY JUDGMENT TO

UPHOLD THE VALIDITY OF THIS ORDINANCE IS IN

CLEAR VIOLATION OF APPLICABLE DECISIONS OF

THIS COURT AND OF COURTS OF APPEALS AND AT

LEAST ONE OTHER UNITED STATES COURT OF

APPEALS.

When this Court in Young v. American Mini Theaters,

427 U.S. 50 and City of Renton v. Playtime Theaters, Inc., 475

U.S. 41 (1986), upheld the constitutional validity of separate

zoning treatments for adults only theaters, based upon the

contents of the film shown, it departed from its long-standing

tradition of permitting content-based discrimination of speech

only in the most limited of circumstances. Compare, for

example, Police Department of Chicago v. Mosley, 409 U.S. 92

(1972); Regen v. Time, Inc., 468 U.S. 641 (1984); and Texas v.

Johnson, 491 U.S. 397 (1989). The basis for this Court’s

departure from its long standing prohibition against content-

based discrimination was the theory that the ordinances were

justified, not by objection of the content of protected speech,

but by the adverse secondary effects caused by such speech,

such as a decline in the value of surrounding property, and an

increase in the crime in the surrounding neighborhoods.”

As a result of the “secondary effects rationale of Young

and Renton, a necessary corollary has arisen: Regulation of adult

entertainment, in order to be constitutionally valid, must be “narrowly

tailored” to those uses shown to have caused secondary effects. In

Young, Justice Powell, whose concurring opinion provided the fifth

vote necessary to uphold the validity of the Detroit ordinance in

question, stated, “The case would present a different situation had

Detroit brought within the ordinance types of theaters that had not

been shown to contribute to the deterioration of surrounding

neighborhoods.” 427 U,S. at 82 (Powell, J. concurring). Likewise,

in Renton, the ordinance was upheld only because it was “‘narrowly

tailored’ to affect only that category of theaters shown to produce the

unwanted secondary effects...” 475 U.S. at 52.

Relying upon these two comments, numerous courts have

invalidated zoning restrictions on adult entertainment, even nominally

patterned after Young and Renton, when a particular type of adult use

has not been shown to cause adverse secondary effects. See, for

example, Pringle v. City of Covina, 11S Cal. App. 3d 151, 171 Cal.

Rptr. 251 (1981); Tollis, Inc. v. San Bernardino County, 827 F. 2d

9See for example, the plurality opinion of Justice Stevens in

Young, 427 U.S. at 71, n. 34.

1329 (9th Cir. 1987); World Wide Video v. City of Tukwila, 117 Wash.

2d 382, 816 P. 2d 18 (1991), cert. denied, _ U.S.__, I2 S.Ct. 1672,

18 L.Ed. 2d 391 (1992); Janra Enterprises, Inc. v. City of Reno, 818

F. Supp. 1361 (D. Nev. 1993); and Sebago, Inc. v. City of Alameda, 21

Cal. App. 3d 1372, 259 Cal. Rptr. 918 (1989), rev. denied, (Cal. 1989).

Judged by these standards, at minimum, a factual dispute

existed as to whether the county’s ordinance in question was

narrowly tailored to those uses found to cause adverse

secondary effects. As already noted, supra, the affidavit of

Richard Wilson indicated that all of the studies from the 1970s

and 1980s, which were the studies relied upon by the County of

Benton in enacting the ordinance,"® were premised on a type of

facility which, by and large, no longer exist, the old sleazy type

of “strip bar,” characterized by poor maintenance, lack of

concern for customer safety, lack of cleanliness, poor lighting

and upkeep, and generally a “low life” type of clientele. By

contrast, the upscale cabaret, in which catagory Wilson places

the King’s Inn, a clear, well maintained, with an emphasis on

’ hospitality and security. No evidence exists that such

establishments had ever caused adverse secondary effects.

This opinion evidence was reinforced by the emperical data in

10Reliance upon these studies is set forth on the face of the

ordinance. See Appendix at A.87.

the McLaughlin Plan Review, indicating that, in fact, during its

four years of of existences, King’s has caused no adverse

secondary effects. -

In holding that no genuine issue of material fact existed

as to whether the Benton County ordinance was sufficiently

tailored to pass First Amendment consideration, the Minnesota

Court of Appeals said it was “necessarily” limited to “the

information available to the county when it passed the

ordinance,” and the it would not “second guess the scientific

accuracy of a legislative determination of fact.” Appendix at.

A.18-A.19, 617 N.W. at 94. The court further found that

because the county relied upon studies of adult uses addressing

similar businesses, it may regulate adult businesses as a class,

without regard to whether a particular genre of adult businesses

causes adverse secondary effects. Id.

Thus, the position of the Minnesota Court of Appeals

appears to be that if a government agency, in enacting a

nominally content-based restriction on speech, relies upon some

evidence, no matter how outdated and unreliable that evidence

may be, that secondary effects are caused by some type of adult

entertainment, that judgment is forever immunized from

constitutiona! scrutiny.

This position is plainly at odds with decades worth of

decisions of this Court and other courts of appeals.

See for example, this Court’s decision in United States

v. Carolene Products Co., 304 U.S. 144, 153 (1938), in which

this Court stated:

"Where the existence of a rational basis for

legislation whose constitutionality is attacked

depends upon facts beyond the sphere of judicial

notice...the constitutionality of a statute predicated

upon the existence of a particular state of facts may

be challenged by showing to the court that those

facts have ceased to exist." 304 US. at 153, 58

S.Ct. at 784.”

The Third Circuit clearly applied this principle in a First

Amendment context in New Jersey Citizen Action v. Edison

Township, 797 F. 2d 1250 (3rd Cir. 1986), in which it

invalidated a municipal ordinance proscribing door-to-door,

political canvassing and solicitation after 5:00 p.m., only two

years after a panel of the same court had upheld the validity of

identical restrictions in Pennsylvania Alliance for Jobs &

Energy v.Council of the Borough of Munhall, (PAJE), 743 F.

2d 182 (3rd Cir. 1984). The reason for the rapid reversal of its

decision was the fact that in PAJE, the municipal government

had justified the restrictions on the need to prevent residential

burglaries, while in New Jersey Citizen Action, the Piaintiffs

empirically demonstrated that the restrictions were unnecessary

to accomplish such an end.

Applying the same principle, it is clear that if Petitioners

can demonstrate that the “secondary effects” rationale of studies

20 and 30 years old is no longer applicable, a restriction

premised on those studies cannot pass constitutional muster

under Renton.

The fact that the county’s decision, based upon outdated

and unreliable information, is not immune from constitutional

scrutiny was reaffirmed by this Court’s decision in City of Erie

v. Pap’s A.M., supra, 529U.S.__, 120 S.Ct. 1382 (2000). In

that case, a four-Justice plurality, written by Justice O’Connor,

upheld the validity of the city’s public nudity ordinance, on a

secondary effects rationale, but only because the rationale was

not contested by the adult entertainment establishment which

challenged the validity of the prohibition. Justice O’Connor

wrote, in part IV of her opinion:

“Here, Kandyland has had ample opportunity to

contest the Council’s findings about secondary

effects - before the Council itself, throughout the

state proceedings, and before this Court. Yet to this

day, Kandyland has never challenged the City

Council’s findings or cast any specific doubt on the

validity of those findings. Instead, it has simply

asserted that the Council’s evidentiary proof was

lacking. In the absence of any reason to doubt it, the

City’s expert judgment should be credited (emphasis

eat aialaleaaaedlia!

supplied).” 120 S. Ct. at 1396."

Justice O’Connor proceeded to reject Justice Souter’s

concurring opinion, which would have demanded a much stronger

evidentiary basis for the Council’s conclusion with respect to adverse

secondary effects, stating the following:

“Justice Souter next hypothesizes that the reason we

cannot accept Erie’s conclusion is that, since the

question whether these secondary effects occur is

‘amenable to empirical treatment,’ we should ignore

Erie’s actual experience and instead require such an

empirical analysis. [Citation omitted.] In Nixon [v.

Shrink Missouri Government PAC, 528 U.S. __,

120 S. Ct. 897 (January 24, 2000)], however, we

flatly rejected that idea. [Citation omitted.] (Noting

that the ‘invocation of academic studies said to

indicate’ that the threatened harms are not real is

insufficient to cast doubt on the experience of the

local government).” Id. at 1397.

The reference to the Nixon case was to in the Court’s decision

upholding the validity of the Missouri legislature’s limitation on the

amount of contributions to candidates for state office. At issue was

whether a sufficient evidentiary basis existed to support the purported

need for such a restriction, based upon the justifications of prevention

11The so-called “expert judgment” consisted of the City

Council members’ “first-hand knowledge of what took place

at and around nude dancing establishments in Erie,” enabling

such members to make “particularized expert judgments

about the resulting harmful secondary effects.” Id. at 1397.

of corruption and government and public perception of corruption in

government. The Court then proceeded to outline the evidentiary

record made in the trial court to support the conclusion that both

interests would be furthered by the legislation in question. The Court,

by Justice Souter then concluded as follows: '

“There might, of course, be need for a more

extensive evidentiary documentation if Petitioner’s

an ing on their own

the apparent implication of Buckley’ s and the record

here (emphasis supplied), but the closest

Respondents come to challenging these conclusions

is their invocation of academic studies said to

indicate that large contributions to public officials or

candidates do not actual result in changes in the

candidates’ position. Brief for Respondent’s Shrink

Missouri Government PAC, et al 41; Smith, Money

Talks; Speech, Corruption, Equality and Campaign

Finance, 86 Geo. L.J. 45, 58 (1997); Smith, Faulty

Assumptions and Undemocratic Consequences of

Campaign Finance Reform, 105 Yale L. J. 1049,

1067-1068 (1995). Other studies, however, point

the other way. Reply Brief for Respondent Bray 4-

5; F. Sorauf, Inside Campaign Finance 169 (1992);

Hall & Wayman, Buying Time: Moneyed Interests

and the Mobilization of Bias in Congressional

Committees, 84 a.m. Pol. Sci. Rev. 797 (1990); D.

Magleby & C. Nelson, The Money Chase 78 (1990).

Given the conflict among these publications, and the

absence of any reason to think that public perception

has been influenced by the studies cited by |

Respondents, there is little reason to doubt that

sometimes large contributions will work actual

corruption of our political system, and no reason to

question the existence of corresponding suspicion

among voters.” Id. 120 S. Ct. at 908..

Thus, it is clear from both the O’Connor concurrence in

Pap’s and the majority opinion in Nixon, written by Justice Souter,

that this Court has adopted the following standards with respect to

evidentiary burdens to justify restrictions on First Amendments rights:

1. Automatic deference to governmental conclusions

occurs only when those conclusions are not challenged by the

proponents of First Amendment rights.

y Where such a challenge occurs, and the evidence is

contradictory, or does not necessarily dispute the government’s

conclusion deference will occur in those cases as well.

3. Where there is a conflict between the city’s own

experience and academic studies, the city’s own experience prevails.

4. Apart from the foregoing situations, objective truth

plainly does make a difference.

Judged by these standards, the inadequacy of the error of

granting summary judgment to Respondent is obvious. Clearly, the

county’s conclusions as to secondary effects were in fact challenged

directly at all stages of the proceeding. Moreover, to the extent the

county’s own “experience” was at issue, it directly contradicted the

studies upon which it relied. The county’s own experience was that,

far from causing property values to decline, the presence of

Petitioner’s establishments has resulted in property values sharply

increasing. Far from causing a particular problem for law

enforcement services, Petitioner’s establishment causes relatively

fewer law enforcement problems than do comparable establishments

no featuring adult entertainment. Thus, to the extent this Court now

mandates deference to a municipality's own experience” over

academic studies, at minimum, a genuine issue of material fact has

been created.

Finally, the standard adopted by the Minnesota Court of

Appeals plainly contradicts the rationale of a virtually

contemporaneous decision from the United States Court of

Appeals for the Ninth Circuit in Alameda Books, Inc. v. City of

Los Angeles, 222 F. 3d 719 (9th Cir. 2000), in which that court

invalidated a municipal ordinance prohibiting multiple adult uses

within a single buiiding, finding that the study relied upon by the

city did not support the ordinance in question. Referring to its

earlier decision in Tollis v. San Bernardino County, 827 F. 2d

1329 (9th Cir. 1987), the Ninth Circuit in Alameda Books stated

the following:

“[W ]e held that under Renton, the county ‘must

show that in enacting the partial limitations. ..it

relied upon evidence permitting a reasonable

inference that, absent of such limitations, the

adult theaters would have harmful secondary

effects.’ [Citation omitted.] We then found that

the county had presented no evidence that a

single showing of an adult film would have any

of the harmful secondary effects on the

community that the county identified as the basis

for the regulation. [Citation omitted. ]

Like the county in Tollis, Los Angeles has

presented no evidence that a combination adult

bookstore/arcade produces any of the harmful

effects identified ia the Study... Therefore, it is

unreasonable for the City to infer that absent its

regulations, a bookstore/arcade combination

would have harmful secondary effects.”Id. at

725.

By this standard, the impropriety of summary judgment

on behalf of the county in the instant case is obvious. Given the

substantial and uncontradicted evidence that uses of the genre

of adult business engaged in by Petitioner cause no adverse

secondary effects, when coupled with a total absence of

evidence of adverse secondary effects plainly indicate it is

unreasonable for the county to believe that absent its present

regulations harmful secondary effects would occur.'2_ Indeed,

12In this regard, it should be noted that the factual posture of

the instant case is far different from the factual posture in

Renton. In Renton, the city was enacting adult zoning

regulations, prior to any adult business opening within the

city. See 475 U.S. at 52-53. It is therefore eminently

reasonable, in evaluating the factual predicate for such an

ordinance, to look merely at the legislative record before the

enacting body, at the time of enactment. By contrast, what is

at issue in the instant case is not the enactment of a new

it should be noted that the Minnesota Court of Appeals itself

implicitly acknowledged that the ordinance would not have

passed constitutional muster under the standard adopted by the

Ninth Circuit in Alameda Books. The Minnesota Court of

Appeals stated:

“Kismet asserts that a recent Ninth Circuit

opinion requires a more exacting analysis to

determine whether a local government

reasonably relied on an adult-use study. See

Alameda Books, Inc. v. City of Los Angeles,

222 F. 3d 719, 724 (9th Cir. 2000)...we

conclude, however, that Mitchell

v.[Commission on Adult Entertainment

Establishments, 10 F. 3d 123 (3rd Cir. 1993),

and JLO [Investments v. City of Rochester, 25

F.3d 1413 (8th Cir. 1994)] demonstrate a better

application of Renton’s holding that a local

government may rely on studies from other

localities if the studies are ‘reasonably relevant

to the problem that the [locality] addresses.’

[Citation omitted. ]”

617 N.W. at 94, Appendix at A.20.

Plainly, resolution of the clear conflict between the

ordinance in a jurisdiction which had no adult businesses;

rather, it is the amortization of an existing adults-only

business, which developed a four-year track record of not

causing adverse secondary effects. Compare XLP Corp. v. )

County of Lake, _N.E.2d__, 2000 W_L. 33156447 (Ill. )

App. 2d Dist. 2000).

Ninth Circuit on the one hand, and the Minnesota Supreme

Court, and the Third and Eighth Circuits on the other hand, is

itself a basis for granting the writ of certiorari."?

I. A SUBSTANTIAL QUESTION EXISTS AS

TO WHETHER THE ORDINANCE, IF IMPLEMENTED,

WOULD HAVE THE EFFECT OF AMELIORATING

ADVERSE SECONDARY EFFECTS.

Even assuming that the county, at the time it enacted the

ordinance in question, had before it legally sufficient evidence

to support the proposition that Petitioner’s uses cause adverse

secondary effects, there is clearly, in light of this Court’s

decision in City of Erie v. Pap’s A.M., 529 U.S._ (2000), in

order for even a content-neutral regulation of speech to be

valid, it must in fact advance the content-neutral goal of

13In this regard, it should be noted that the Ninth Circuit in

Alameda Books expressly rejected the Third Circuit’s

standard in Mitchell, stating, “merely requiring that a

legislative body show that adult establishments as a class

cause adverse secondary effects the regulation is aimed at

preventing could easily fall short of our requirement in Tollis

that a legislative body ‘must show that in enacting the

particular limitations...it relied upon evidence permitting the

reasonable inference that, absent of such limitations, the adult

[businesses] would have harmful secondary effects’ [Citation

omitted.] 222 F. 3d at 727. ,

eliminating adverse secondary effects.‘ In this regard,

Petitioner submitted essentially uncontradicted evidence that

where amortization of non-conforming adult uses has taken

place, it has resulted, not in amelioration of adverse secondary

effects, but in their exacerbation. The report points out that in

the case of “Ray’s Playpen” a Kansas City adult bookstore

which, as a lawful nonconforming use, was acquired as part of

an eminent domain proceeding, along with two other legal

nonconforming uses, resulted in a decline in property values and

a loss of tax revenue for the City of Kansas, Missouri

(Appendix at A.187-A.189). He pointed out that in Pinellas

County, Florida, an adult cabaret operated from 1988 to 1994,

during which time property values in the area of the cabaret

increased substantially. When closed by amortization in 1995,

property values in the area of the cabaret fell precipitously (Id.

at A.188-A.191).

Likewise, in the amortization made famous in Town of

Islip v. Cavigilia, 73 N.Y. 544, 540 N..E. 2d 215 (1989), the

following resulted:

“Eight years later in 1997, the building deteriorated

14To be sure, at least according to the plurality opinion in

Pap’s, this is a minimal burden, but a burden nonetheless.

See Id. at 1397.

a ee ee ee ee re

to the point where there is a clear and present danger

to persons on the property. The building is open to

the elements, it has been vandalized, there is clear

evidence of sexual activity and drug use on the

property, and the property is being used for illegal

dumping. The residential use to the north, which is

was of an alleged concern to the Town at the time of

the Study is also vacant, and several commercial

uses across the street have closed. There can be no

doubt that closure of “Gloria’s Place” has not only

dramatically and adversely affected property values

in the area, but it is also brought true blight to the

area.” Id. at A.674-A.675...

Indeed, on the record presented in the instant case,

absolutely no basis exists for suggesting the result would be any

different if Petitioner’s use were amortized. An existing

prosperous land use, resulting in no significant law enforcement

problems and a substantial increase in the value of surrounding

property would be replaced by a vacant building absolutely unusable

for the only purpose for which it was designed. How such a result

would continue the property value increase caused by existing land

use is unexplained by either Respondent or the District Court or the

Court of Appeals.’> .

15This problem cannot be waved away by simple reliance

upon the language in Young that city’s must be “free to

experiment” in order to resolve complex urban problems.

427 U.S. at 71. The problem with this language is that now,

24 years after Young, amortizing of non-conforming adult

fil. THE ORDINANCE WOULD HAVE THE

EFFECT OF SUPPRESSING OR GREATLY LIMITING

ACCESS TO CONSTITUTIONALLY PROTECTED

SPEECH IN VIOLATION OF THE FIRST AND

FOURTEENTH AMENDMENTS TO THE UNITED

STATES CONSTITUTION.

In Young, this Court upheld the validity of Detroit’s

adult entertainment zoning ordinance, only upon a factual

showing that implementation of the ordinance would not limit

the availability of adult entertainment to the residents of the City

of Detroit. Writing for the plurality, Justice Stevens noted that,

under the ordinance, “The market for this commodity is

essentially unrestrained.” 427 U.S. at 62. He further wrote that

the “situation would be quite different if the ordinance had the

effect of suppressing or greatly restricting access to, lawful

speech.” Id. at 71, n. 35.

The record in the instant case was essentially undisputed

uses is no longer an “experiment.” It is something

municipalities throughout the country have repeatedly

engaged in. Its track record of advancing content-neutral

goals is now plainly before the Petitioner and must be

considered in determine the constitutional validity of the

ordinance. Plainly, at least a genuine issue of material fact on

the issue was created; given the uncontradicted nature of

McLaughlin’s evidence, summary judgment, if granted at all,

should have been granted to Petitioner.

that, while the city asserted that over 100 sites were available

for adult entertainment, within unincorporated Benton county,

under the terms of the ordinance, these sites were available only

in the unbridled discretion of the county’s planning commission,

since, as noted, supra, a new business could not be established

in Benton County, without complying with the county’s off-

street parking requirements. The ordinance governing off-street

parking gave to the county’s Planning Commission absolute

unbridled discretion, on a business-buy-business, to set the off-

street parking requirement at any figure it wishes.

To permit the city to meet the alternative avenues of

communication requirements of Young and Renton with

locations available only at the discretion of the city plainly is

contrary to a long line of decisions of this Court holding that the

mere existence of discretion renders a regulation of speech

unconstitutional. See for example, City of Lakewood v.Plain

Dealer Publishing Co., 486 U.S. 750 (1988), and Forsyth

County,Ga v. Nationalist Movement, 505 U.S. 123 (1992).

In this regard, the Minnesota Court of Appeals decision

is directly contrary to the Eleventh Circuit’s decision in Lady J

Lingerie v. City of Jacksonville, 176 F. 3d 1358 (11th Cir.

1999), holding that the city could not comply with a Young-

Renton alternative avenues requirements with locations

available only at governmental discretion. In this regard, see

also University Books and Videos, Inc. v. Metropolitan Dade

County, 33 F. Supp. 2d 1364 (S.D. Fla. 1999), and the

University Books and Videos, Inc. v. Metropolitan Dade

County, __F. Supp.2d__(S.D-Fla January 25, 2001)."°

Since the Court of Appeals decision directly contradicts

decisions of both this Court and the Eleventh Circuit, certiorari

should be granted."

CONCLUSION

For all of the foregoing reasons, Petitioner’s writ of

15In its opinion, the Minnesota Court of Appeals attempts to

distinguish Lady J Lingerie by asserting that the parking

requirements “do not give county officials discretion to deny

Kismet’s ability to operate an adult use in Benton County...”

617 N.W. 2d at 95, Appendix at A.22. The assertion is

directly contrary to Benton County’s own testimony in the

record in which the Planning Director clearly admitted that

unless the off street parking requirements were complied

with, a use would not be permitted. See T. 44.

ee ee

certiorari should be, in all respects, granted.

Respectfully submitted,

G 0 ll P.A.

AG, bg

Randall D.B. Tigue po

Atty ID No. 110000

Attorney for Petitioners

9 Karmel Square Bidg.,

2940 Pillsbury Avenue South

Minneapolis, MN 55408

612/825-0936

Dated: 2/8/01

APPENDIX INDEX

Order of the Minnesota Supreme Court denying

NE a eae rca ee es a ire one A.l

Court of Appeals opinion........................ A.2

District Court findings of fact, conclusions of law

and order for judgment dated 12/27/99 ............ A.25

District Court order June 1999, .................. A.48

Findings of the Benton County Board of

MI exec Ua Meese, Wann G seca eee A.84

Benton County Ordinance No. 242 ............... A.87

Benton County Non-conforming use Ord. ........... 97.

Petitioner’s complaint in District Court ........... A100.

Affidavit of Richard Wilson .................... A120.

Declaration of R. Bruce McLaughlin ............. A152.

Excerpts of McLaughlin Planning Review ......... A204.

Exerpts of zoning appeal board hearing ........... A.248

A.|

STATE OF MINNESOTA

IN SUPREME COURT

C9-00-65

Kismet Investors, Inc.

Petitioner,

VS.

County of Benton,

Respondent.

ORDER

Based upon all the files, records and proceedings herein:

IT IS HEREBY ORDERED: that the petition of

County of Benton for further review be, and the same is, denied.

November 15, 2000

BY THE COURT:

/s/

Alan C. Page

Associate Justice

BLATZ, C.J., took no part in the consideration or decision of

this case.

A?.

STATE OF MINNESOTA

IN COURT OF APPEALS

C9-00-65

Kismet Investors, Inc.,

Appellant,

VS.

County of Benton,

Respondent.

Filed September 12, 2000

Affirmed

Lansing, Judge

Benton County District Court

File No. C0981240

Randall D.B. Tigue, Randall Tigue Law Office, P.A.,

2940 Pillsbury Avenue South, Suite 200, Minneapolis,

MN 55408 (for appellant)

Kenneth H. Bayliss III, Quinlivan & Hughes, P.A., 400

South First Street, Suite 600, St. Cloud, MN 56302 (for

respondent)

Considered and decided by Lansing, Presiding Judge,

Klaphake, Judge, and Peterson, Judge.

SYLLABUS

I. Use variances, when permitted under

Minnesota statutes, must be justified by showing that a

landowner will suffer particular hardship absent the

variance. Practical difficulties alone cannot justify a use

variance.

Il. Although statutes and ordinances generally

carry a presumption of Constitutional validity, when an

ordinance allegedly infringes First Amendment rights,

States and local governments have the burden to

demonstrate that the ordinance is Constitutional.

iil. Parking requirements that do not give

county officials unfettered discretion to deny a permit or

license to operate an adult use are not unconstitutional

prior restraints.

OPINION

LANSING, Judge

Kismet Investors, Inc., appeals the district court’s

decision affirming Benton County’s denial of Kismet’s

application for a variance to allow King’s on the Lake,

an adult cabaret, to continue operating in its existing

location. Kismet also appeals from the court’s summary

judgment that the Benton County ordinance making

King’s an unlawful use does not violate the First

fr. Y

Amendment. Because we conclude that the county

reasonable denied the variance and that the ordinance

does not violate the First Amendment, we affirm.

FACTS

King’s on the Lake, also called King’s Inn, is a nude-

dancing establishment or adult cabaret located in Benton

County. Before September 1993, the building that now

houses King’s housed several restaurants. When

Bukaka, Inc., Kismet’s predecessor- in-interest, began

operating King’s as an adult cabaret in September 1993,

the county zoning and planning administrator notified

Bukaka that it would need a conditional-use permit to -

operate an adult cabaret. See Bukaka, Inc. v. County of

Benton, 852 F. Supp. 807, 809 (D. Minn. 1993). Bukaka

sought and obtained injunctive relief against Benton

County’s conditional-use requirement on the grounds

that it allowed Benton County administrators too much

discretion to satisfy First Amendment requirements.

See Id. at 813 (granting preliminary injunction); see also

Mga Susu, inc. v. County of Benton, 853 F. Supp. 1147,

1154 (D. Minn. 1994) (granting permanent injunction).

In June 1993, the Benton County Planning Commission

began considering the need for an ordinance to govern

adult-use establishments. In January 1994, the

commission recommended to the Benton County Board

of Commissioners a six-month moratorium on new adult

uses in Benton County. The board passed the

moratorium after a public hearing at which no adverse

comments were received. On July 14, 1994, the

planning commission recommended to the county board

that it enact an amendment to the development code,

designated Ordinance 242, to govern adult uses. The

board, again after receiving no adverse comment at-a

public hearing, passed the ordinance on July 19, 1994.

Ordinance 242 permits adult uses in areas zoned B-1,

B-2, I-1, and I-2 so long as no adult use is located

within 500 feet of any area zoned R-1, R-2, or R-3, or

within 500 feet of any school, church, daycare facility,

hotel, or public park. Benton County, Minn.,

Development Code § 7.10.0(A) (1998). The ordinance

defines adult uses to include “adult enterprises,

businesses or places open to some or all members of the

public at or in which there is an emphasis on the

presentation, display, depiction or description of

‘specified sexual activities’ or ‘specified anatomical

areas.”” Id. § 7.10.1. The ordinance designates existing

adult uses as nonconforming uses until July 31, 1998,

and unlawful uses after that date. Jd. § 7.10.3.

Kismet purchased King’s in January 1997 and the land

on which King’s is located in January 1998. Kismet

continued to operated King’s as an adult cabaret. On

July 22, 1998, just days before King’s would become an

unlawful use, Kismet applied to the Benton County

Board of Adjustment for a variance from Ordinance 242.

At a public hearing on the variance application, the

board heard testimony from Keith Keller, Kismet’s

owner, and from many King’s employees. Keller

testified that Kismet’s predecessors had made

improvements to King’s that cost more than $300,000

and that these improvements made the building suitable

only for an adult cabaret. King’s employees testified to

personal hardships that they would suffer if no longer

able to work at King’s. Bruce McGlaughlin, an expert

planning consultant for King’s, testified that King’s met

the criteria for a variance and that King’s did not cause

the secondary effects that were the basis for enacting

Ordinance 242. The board also heard testimony from

Benton County citizens opposed to the variance.

-In addition to testifying, McGlaughlin submitted a

planning review that summarized his empirical study of

King’s. The study concluded that King’s operation

did not result in increased police calls or lower property

values. The review also critically analyzed the studies

from other municipalities and counties on which Benton

County based its conclusion that adult uses lead to

adverse secondary effects. McGlaughlin concluded that

most of the studies were (1) misrepresented; (2) biased;

(3) methodologically flawed; and/or (4) conducted under

circumstances distinguishable from Benton County’s.

The board issued a written order denying the variance.

The board found that King’s used was not prohibited in

its current zoning district, but that the requested

variance was not in harmony with the general purposes

of the development code. The board further found that

Kismet had not demonstrated a hardship unique to its

property, and that the variance, if granted, would alter

the family-neighborhood character of the area. In

response, Kismet brought this action, requesting that the

district court (1) compel the count to grant a variance;

(2) declare the ordinance unconstitutional; (3) declare

unreasonable the amortization of King’s nonconforming

use; (4) grant a temporary injunction prohibiting

enforcement of the ordinance; and/or (5) find a taking

and compel the county to condemn the land and pay fair

value. The district court denied Kismet’s motion for an

injunction and affirmed the county’s denial of the

variance. The county then moved for summary

judgment on the remaining claims. The district court

granted the motion against all claims except the

constitutional claim. The court found a material issue of

fact on whether there were alternative avenues of

communication as required by the First Amendment and

held an evidentiary hearing on that issue. Relying on

evidence produced at the hearing that 100 alternative

sites were available for adult uses in Benton County, the

district court found the Benton County ordinance

constitutional. Kismet appeals the district court’s

decision affirming the county’s denial of the

Variance and summary judgment ruling the Benton

County ordinance constitutional.

ISSUES

I Was the board’s denial of the variance

unreasonable?

A.8

Il. Does Ordinance 242 violate the First

Amendment to the U.S. Constitution?

ANALYSIS

A board of adjustment has broad discretion to grant or

deny variances, and we Review the exercise of that

discretion to determine whether it was reasonable.

Vanlandschoot v. City of Mendota Heights, 336 N.W. 2d

503, 508 (Minn. 1983); Rowell v. Board of Adjustment,

446 N.W. 2d 917, 921 (Minn. App. 1989), review

denied (Minn. Dec. 15, 1989). In determining

reasonableness, we are guided by the Standards set out

in the relevant county ordinance, but a board’s authority

to grant Variances under the ordinance may not exceed

the power granted by statute. Rowell, 446 N.W.2d at

921. When proceedings before a board are fair and

complete, appellate review is based on the record of the

board’s proceedings, not the district court’s findings or

conclusions. Swanson v. City of Bloomington, 421 N.W.

2d 307, 313 (Minn. 1988); VanLandschoot, 336 N.W.

2d at 508. County boards of adjustment have the

exclusive power to grant variances from their zoning

ordinances. Minn. Stat. § 394.27, subd. 7 (1998). A

variance may be granted only if it is in harmony with the

general purposes and intent of local zoning ordinances

and if strict enforcement of those zoning ordinances will

cause “practical difficulties” or “particular hardship.”

Id. The county variance statute is worded differently

from the municipality variance statutes, which allows

variances only on a showing of “undue hardship” and

does not refer to practical difficulties. See Minn.

Stat. § 462.357, subd. 6(2) (1998).

Under both statutes, however, “hardship” means that (1)

“the property in question cannot be put to a reasonable

use” absent the variance (2) “the plight of the

landowner is due circumstances unique to the property

[and] not created by the landowner;” and (3) “the

variance, if granted, will not alter the essential character

of the locality.” Minn. Stat. §§ 394.27, subd. 7;

462.357, subd. 6(2). Economic considerations alone do

not constitute hardship if there is a reasonable use for the

property absent a variance. Minn. State. §§ 394.27, subd

7; 462.357, subd. 6(2). And, “[n]o variance may be

granted that would allow any use that is prohibited in the

zoning district on which the subject property is located.”

Minn. Stat. §§ 394.27, subd. The Benton County

Development Code outlines identical factors for

consideration of variance applications. Development

Code, supra, § 11 .5.1. The landowner applying for a

variance carries the “heavy burden” to show that

the variance is justified. Luger v. City of Burnsville, 295

N.W. 2d 609, 612 (Minn. 1980). Thus, variances are

distinguishable from special-or conditional-use permits,

which generally should be granted when an applicant

meets the conditions specified in the ordinance, and for

which the burden rests with the opposing party to show

facts compelling denial. Jd. ; Westling v. City of St.

Alo

Louis Park, 284 Minn. 351, 355-56, 170 N.W.2d 218,

221-22 (1969).

Minnesota courts have recognized the difference

between use and area variances. In re Appeal of Kenney,

374 N.W. 2d 271, 274 (Minn. 1985); Rowell, 446

N.W.2d at Use variances allow a use prohibited under

the zoning ordinance; area variances control area, height,

setback, density, and parking requirements for uses that

are permitted by the ordinance. Kenney, 374 N.W.2d at

274; see generally 3 Kenneth H. Young, Anderson’s

American Law of Zoning § 20.06-.07 (4" ed. 1996).

Kismet seeks to vary the uses permitted for its property

under the zoning ordinance and thus seeks a use

variance.

In Minnesota, most use variances are prohibited by

statue. Minn. Stat. § 394.27, subd. 7 (no variance shall

be allowed if use prohibited in zoning district). Local

governments may grant used variances, however, when a

use is not prohibited in the zoning district, but the use is

limited by another portion of the zoning ordinance. See

Kenney, 374 N.W.2d at 274-75 (holding county had

authority to grant use variance from ordinance

prohibiting boathouses or addition to boathouses). The

parties agree that King’s use is not prohibited in its

zoning district, but is instead prohibited by the adult-use

sections of the development code. Thus, this case falls

within the small number of use variances allowable

under Minnesota statues.

A.))

Kismet disputes the board’s finding that Kismet failed to

demonstrate hardship to support its requested variance.

Kismet argues that substantial and costly improvements

to the building demonstrate hardship. Kismet cites

Minnesota variance cases affirming findings of hardship

based on financial investment combined with practical

difficulties of complying with the zoning ordinance.

Each of the cases Kismet cites, however, deals with an

area variance, not a use variance, which is what Kismet

seeks. See Merriam Park Community Council, Inc. v.

McDonough, 297 Minn. 285, 293, 210 N.W.2d 416, 421

(1973) (affirming variances from setback requirements,

parking Requirements, and maximum number of

apartment units), overruled on other grounds by

Northwestern College v. City of Arden Hills, 281

N.W.2d 865 (Minn. 1989); Arcadia Dev. Corp. v. City of

Bloomington, 267 Minn. 221, 228, 125 N.W. 2d 846,

851 (1964) (holding that city’s denial of variance from

sign-standards ordinance was arbitrary and capricious);

Rowell, 446 N.W.2d at 922-23 (affirming variance from

setback requirements).

Although courts historically have required variance

applicants to demonstrate that there was no other

reasonable use for their land, some jurisdictions,

including Minnesota, have more recently recognized that

area variances may be granted on a lesser showing of

practical difficulties. See Rowell, 446 N.W.2d at 922

(citing McDonough, 297 Minn. At 292, 210 N.W.2d at

A, (2.

420); see also Ogawa v. City of Des Peres, 745 S.W. 2d

238, 242 (Mo. Ct. App. 1987) (applying lower standard

for area variances); [vancovich v. City of Tucson Bd. Of

Adjustment, 529 P.2d 242, 250 (Ariz. Ct. App. 1974)

(same); Sprague-Covington Co. v. Zoning Bd. Of

Review, 230 A.2d 419, 420 (R.I. 1967) (same); see

generally Young, supra, § 20.48-.51.

Kismet’s argument requires us to consider whether a

lesser showing of practical difficulties can justify a use

variance. Minnesota appellate courts have not directly

addressed this issue, but other jurisdictions that

recognize the lower practical-difficulties standard for

area variances continue to require the more demanding

hardsnip standard for use variances. See, e.g.,

vancovich, 529 P.2d at 250 (use variances require more

stringent showing). After a careful review of the

variance statue and the relevant precedents, we conclude

that Minnesotg landowners seeking use variances must

demonstrate that they will suffer particular hardship

absent the variance. Practical difficulties alone cannot

justify a use variance.

We recognize that Minnesota’s county variance statute

appears to cast practical difficulties or particular

hardship in the alternative. But the Minnesota

legislature adopted this dual variance standard in 1974,

when the differing treatment of use and area variances

was well established in the caselaw. See 1974 Minn.

Laws Ch. 571, § 27; Meister v. Western Nat'l. Mut. Ins.

Co., 479 N.W.2d 372, 378 (Minn. 1992) (stating courts

A,t3

should presume legislature acted with understanding of

existing, related legislation). The statue, read in the

context of the caselaw, supports the conclusion that the

standard of practical difficulties was intended to apply to

area variances and the standard of particular hardship

was intended to apply to use variances. See In re

Village of Bronxville, 150 N.Y.S.2d 906, 908 (N.Y.

App. Div. 1956) (interpreting nearly identical New York

variance statue allowing variances based on “practical

difficulties” or “unnecessary hardship” to create two

different variance standards-one for area variances and

one for use variances). Moreover, to interpret the

statutory language to apply both standards to use

variances would read the more demanding particular-

hardship standard out of the statue. See Minn. Stat. §

645.17 (1998) (stating legislature intends entire statue to

be effective). Our construction of the statue gives

practical meaning to both standards.

Applying the particular-hardship standard, we must

next determine whether the board reasonably found that

Kismet’s property could be put to other reasonable uses;

that Kismet’s plights was not unique to the property; and

that granting Kismet’s requested variance would change

the essential character of the locality.

The record supports the board’s finding that there are

other reasonable uses for Kismet’s property, including a

restaurant or resort. Kismet agues that improvements

to the property make it useful only as a adult cabaret. A

Aly

landowner’s significant investment in the property,

however, does not demonstrate the absence of other

reasonable uses. See Minn. Stat. § 394.27, subd. 7

(stating economic considerations alone do not justify

variance). Some courts have found hardship when the

costs of alternative uses are so prohibitive that they will

effectively prevent the property from being put to

another use. See generally Young, supra, § 20.22, at

492-93 n. 13. But Kismet has only shown the cost of

remodeling King’s to operate as an aduit cabaret; Kismet

has offered no evidence on the costs of remodeling the

building for alternative uses or evidence that the costs

would be prohibitive. Kismet has also failed to

demonstrate that its plight is unique to the land.

Kismet’s circumstances as the only landowner currently

seeking to operate as an adult uses in Benton County

does not make its plight unique. The adult-use

ordinance applies in a similar fashion to all those who

own commercially or industrially zoned property

within 500 feet of a protected use. None of these

landowners may operate adult uses on their land. See

Garibaldi v. Zoning Bd. Of Appeals, 303 A.2d 743, 745

(Conn. !972) (“[I]t would be rare case where*** a

regulation which prescribes a minimum distance

between certain types of liquor outlets would cause a

hardship different in kind from that felt by other

properties in a zone”).

Further, Kismet’s failure to show that other uses are cost

prohibitive prevents it from claiming a unique plight

AIS

based on its investments. Cf Halberstadt v. Borough of

Nazarath, 687 A.2d 371, 373-74 (Pa. 1997) (affirming

variance because razing heavy fortress-like building for

alternative uses cost prohibitive); see generally Young,

supra, § 20.37. The board reasonably concluded that

Kismet’s plight was not unique to the land.

Kismet argues that its predecessor made improvements

to the property in Reasonable reliance on the federal

injunctions against Benton County’s conditional-use-

permit requirement. This argument is in oppostion. The

injunction against Benton County’s unconstitutional

conditional-use-permit requirement included no

guarantee that Benton County would not find a

constitutionally permissible method of regulating adult

uses. Cf Bruzzese v. Board of Appeals, 179 N.E.2d

269-271 (Mass. 1962) (reasoning that fact that plaintiff

spent money in anticipation of being granted a variance

did not justify a finding of hardship).

Because it has demonstrated neither that its land can be

put to no other reasonable use nor that its plight is

unique, Kismet has not met its burden to show

particular hardship. Accordingly, we affirm the board’s

denial of variance. The district court granted summary judgment

on Kismet’s claim that the Benton County ordinance violated the

First Amendment, and thus we review that ruling under a

summary judgment standard. See Cummings v.

Koehnen, 568 N.W.2d 418, 420 (Minn. 1997) (on appeal

from summary judgment, reviewing court determines

A,1¢

whether case raises genuine issues of material fact and

whether district court erred in application of law). But

because the issue of reasonable alternative avenues of

communication received an evidentiary hearing, we will

not reverse the district court’s findings on that issue

unless they are clearly erroneous. See Minn. R. Civ. P.

52.01 (“[f]indings of fact, whether bases on oral or

documentary evidence, shall not be set aisle unless

clearly erroneous”); D] MA Corp. v. City of St. Cloud,

562 N.W.2d 312, 321 (Minn. App. 1997), review denied

(Minn. July 28, 1997).

Although statutes and ordinances generally carry a

presumption of constitutional validity, when an

ordinance allegedly infringes First Amendment rights,

the local government bears the burden of demonstrating

that the ordinance is constitutional. See Association of

Community Org. for Reform Now v. City of Frontenac,

714 F.2d 813, 817 (8" Cir. 1983) (citing Organization

for a Better Austin v. Keefe, 402 U.S. 415, 419, 91 S.

Ct. 1575, 1577-78 (1971)); see also J & B

Entertainment, Inc. v. City of Jackson, 152 F.3d 362,

370-371 (5" Cir. 1998); Phillips v. Borough of Keyport,

107 F.3d 164, 172-73 (3d Cir. 1997). This distinguishes

First Amendment challenges to Zoning ordinances from

police-power challenges, which require the challenger to

Demonstrate an unconstitutional exercise of a local

government’s police powers. See, e.g., City of St. Paul

v. Dalsin, 245 Minn. 325, 329, 71 N.W.2d 855, 858

(1955) (burden on appellant to show ordinance not |

within police power). 41D

Ordinances that regulate adult uses based on their

secondary effects are reviewed as time, place, manner

regulations. City of Renton v. Playtime Theatres, Inc., _

475 U.S. 41, 49, 106 S. Ct. 925, 930 (1986). Such

ordinances must be content-neutral, must be designed to

advance a substantial government interest, and must

allow reasonable alternative avenues of communication.

Id. at 50, 106 S. Ct. at 930; Holmberg v. City of Ramsey

12 F.3d 140, 142 (8™ Cir. 1993) (Holmberg I); City of

Crystal v. Fantasy House, Inc., 569 N.W.2d 225, 229

(Minn. App. 1997), review denied (Minn. Nov. 18,

1997). Courts have recognized ordinances that attempts

to prevent the adverse secondary effects of adult uses as

content-neutral regulations that advance a substantial

government interest. See City of Erie v. Pap’s A.M,

USS. , , 120 S. Ct. 1382, 1392-95

(2000) (plurality opinion); Renton, 475 U.S. at 48-49,

106 S. Ct. at 929-30, Fantasy House, 569 N.W.2d at

229. And the Supreme Court has held that a city need

not demonstrate secondary effects within its own

experience, but instead may rely on studies conducted by

other cities, so long as the studies are “reasonably

believed to be relevant to the problem that the [city]

addresses.” Renton, 475 U.S. at 51-52, 106 S. Ct. at

931. We conclude, as did the district court, that

Ordinance 242 is content-neutral and designed to

advance a substantial government interest. The

preamble to Ordinance 242 includes findings that adult

A.17

A. 1g

uses cause secondary effects and states that the

ordinance is intended to ameliorate the secondary effects

of adult uses in Benton County. And the ordinance

reasonably relies on adult-use studies from St. Paul;

Indianapolis; Los Angeles; Phoenix; Rochester,

Minnesota; Adams County, Colorado; and Amarillo,

Texas.

Kismet argues that Benton County’s reliance on these

studies was unreasonable because the studies are flawed,

because they address circumstances different from

Benton County’s, and because King’s was unable to

demonstrate empirically that its s operation has not

caused secondary effects. We reject these arguments for

several reasons.

First, neither Kismet nor its predecessor raised these

issues before the board of commissioners at the public

hearings held before the adoption of Ordinance 242. In

determining whether the county reasonably relied on the

studies, we necessarily review the information available

to the county when it passed the ordinance. See City of

Ramsey v. Holmberg, 548 N.W.2d 302, 306 (Minn. App.

1996) (Holmberg II) (studies that were bit before the city

when it enacted the ordinance failed to raise a genuine

issue on whether “the city reasonably believed that the

businesses to which the ordinance applies produce at

least some of the unwanted secondary effects

experienced by other cities”), review denied (Minn. Aug.

6, 1996). At best, Kismet’s criticism of the studies

A.14

raises a question of whether adult uses actually cause

secondary effects. The resolution of that question is .

precisely the type of fact-finding best left to the county’s

comparatively superior ability to “amass and evaluate

the vast amount of data” available and “make predictive

judgments” about its own circumstances. Turner

Broad. Sys., Inc. v. F.C.C., 522 U.S. 180, 195, 117 S. Ct.

1174, 11898 (1997) (quotation omitted). It is not our

function, “at least in absence of overwhelming

evidence to the contrary, to second-guess the scientific

accuracy of a legislative determination of fact.”

Minnesota State Bd. Of Health by Lawson v. City of

Brainerd, 308 Minn. 24, 32, 241 N.W.2d 624, 629

(1976).

Second, the county reasonably relied on adult-use

studies addressing uses similar to the adult uses covered

by Ordinance 242. See Holmberg Il, 548 N.W.2d at 306

(local government may reasonably rely on studies ,

addressing “reasonably similar businesses”) (quoting

ILQ Investments, Inc. v. City of Rochester, 25 F.3d 1413,

1418 (8" Cir. 1994)). Finally, the county need not

demonstrate which secondary effects are attributable to

each of its adult uses, but may pass ordirances to

address the secondary effects of adult uses as a class and

to address both existing and potential adult uses in

Benton County. See Mitchell v. Commission on Adult

Entertainment Establishments, 10 F.3d 123, 138 (3d Cir.

1993) (stating that state need only show that adult

entertainment Establishments as a class cause secondary

A20

effects); see also Vicary v. City of Corona, 119 F.3d 8,

1997 WL 406768 (9" Cir. July 18, 1997) (reversing

district court reasoning that an ordinance could be

facially constitutional but unconstitutional as

applied to adult use not shown to produce secondary

effects). Kismet asserts that a recent Ninth Circuit

opinion requires a more exacting analysis to determine

whether a local government reasonably relied on an

adult-use study. See Alameda Books, Inc. v. City of Los

Angeles, 222 F.3d 719, 724, 2000 W1 1047892, at *5 (9%

Cir. July 27, 2000) (1977 study finding that

concentration of adult uses causes secondary effects

does not justify ordinance prohibiting multiple adult

uses in one building). We conclude, however, that

Mitchell and ILQ demonstrate a better application of

Renton’s holding that a local government may rely on

studies from other localities if the studies are

“reasonably believed to be relevant to the problem that

the [locality] addresses.” Renton, 475 U.S. at 51-52, 106

s. Ct. at 931.

The last constitutional hurdle is whether Ordinance 242

leave reasonable alternative avenues of communication

for adult uses. The district court’s determination

of the number of sites available for adult uses is factual |

finding reviewed only for clear error. David Vincent, |

Inc. v. Broward County, 200 F.3d 1325, 1333 (11" Cir.

2000). But the court’s methodology for determining the

number of sites and its conclusion about whether that

number of sites provides reasonable alternative avenues

of communication are issues of law that we review de

novo. /d. at 1333, 1335. We also review de novo the

court’s construction of Ordinance 242. See Rowell, 446

N.W.2d at 920.

We see no error in the court’s construction of Ordinance

242’s requirement that adult uses and protected uses

must be separated by 500 feet. The district court

confirmed Benton County’s method of measuring from

building to building because the ordinances defined

most adult uses and most protected uses in terms of the

buildings they occupy. See Development Code, supra,

§§ 7.10.1, 7.10.2. When adult uses are not in a building,

however, the 500 feet is measured from the adult use.

And when the protected use is residentially zoned

property, the measurement is from the lot line of

that residential use. We conclude that the court correctly

applied the plain language of the ordinance.

Using the county’s measurement methods, the district

court found that 100 sites were available for adult uses

in Benton County. The district court’s finding was not

clearly erroneous. The court reasonably credited the

testimony of Benton County development director Ron

Peterson, who conducted the measurement for the

county, and rejected the testimony of King’s expert, who

used all lot-line-to-lot-line measurements. Kismet

argues that the development code’s discretionary parking

requirements render all of the sites unavailable, but we

find this argument unpersuasive. Nothing in the

county’s parking requirements impinges on Kismet’s

A22

ability to use any of the 100 sites for an adult use. The

parking requirements may limit the amount of land on

which Kismet may build, but the First Amendment does

not guarantee Kismet a certain size piece of land or

building for its adult use. See Broward, 200 F.3d at

1336 (“making due with less space than one desired” is

impediment to relocation of adult use that is not of

constitutional magnitude).

We also reject Kismet’s argument that the parking

requirements constitute a prior restraint unconstitutional

under the First Amendment. Zoning provision that

allow adult uses only y at the unfettered discretion of a

locality violate the First Amendment. See, e.g., Lady J.

Lingerie, Inc. v. City of Jacksonville, 176 F.3d 1358,

_ 1361-62 (11™ Cir. 1999) (finding that requirement that

adult uses apply for discretionary zoning exceptions

precluded reasonable alternative avenues of

communications), cert. denied, 120 S. Ct. 1594 (2000).

But the Benton County parking requirements do not give

county officials discretion to deny Kismet’s ability to

operate an adult use in Benton County and thus are

distinguishable from prior restraints that have beén fatal

to adult-use ordinances. See Young v. City of Simi

Valley, 216 F.3d 807, __, 2000 WL 780991, at__—_(9"

Cir. June 20, 2000) (9* Cir. June 20, 2000) (involving

adult use that could not operate if private parties vetoed

it); Lady J., 176 F.2d at 1361 (involving adult use that

could not operate without zoning exception); Bukaka,

852 F. Supp. At 812 (involving adult use that could not

A, 22

operated without conditional-use permit). Simply put,

nothing in the development code required Kismet to

apply for a permit or license to operate as an adult use.

Absent these circumstances, we do find a prior restraint

within the meaning of the First Amendment. CF.

Forsyth County v. Nationalist Movement, 505 U.S. 123,

130, 112 S. Ct. 2395, 2401 (1992) (holding that

ordinance requiring permit and fee for public speeches,

parades, or assemblies was prior restraint on speech);

Stokes v. City of Madison, 930 F.2d 1163, 1168 (7" Cir.

1991) (prior restraint exists when regulation gives

officials power to deny use of a forum in advance

of actual expression).

The touchstone of Renton’s requirement of alternative

avenues of communication is that adult use should not

be denied a reasonable opportunity to operate within the

locality. DJ MA Corp., 562 N.W.2d at 321 (citing

Renton, 475 U.S. at 54, 106 S. Ct. at 932). We conclude

that the 100 available sites provide ample opportunity

for adult uses to operate in Benton County and thus

provide reasonable alternative avenues of

communication. Cf DI MA Corp., 562 N.W.2d at 322

(finding 15 alternative sites sufficient).

DECISION

The Benton County Board of Adjustment reasonably

denied Kismet’s variance application, and we affirm that

denial. Because we conclude that Ordinance 242 is

A2y

content neutral, designed to promote a substantial

government interest, and leaves reasonable alternative -

avenues of communication for adult uses, we also affirm

the district court’s summary judgment determining that

the ordinance is constitutional.

Affirmed.

we A. 24

ivan

STATE OF MINNESOTA IN DISTRICT COURT

COUNTY OF BENTON SEVENTH JUDICIAL DIST.

Kismet Investors, Inc., a

Minnesota corporation,

FINDINGS OF FACT

Plaintiff, CONCLUSIONS OF

LAW, AND ORDER

VS. FOR JUDGMENT

AND JUDGMENT

County of Benton,

Defendant.

The above-entitled matter came before the Honorable

James W. Hoolihan, Judge of District Court, on the 12 day of

November, 1999.

Randall D.B. Tigue, Esq., appeared on behalf of the

Plaintiff, Kismet Investors, Inc.,

Kenneth H. Bayliss, Esq., appeared on behalf of

Defendant, County of Benton.

Plaintiff has a four (4) count complaint against the

Defendant. The parties agreed to bifurcate the issued and

have the Court first decide Count I, Defendant’s challenge to

the validity of the Benton County Board of Adjustment’s

denial of the variance request.

In findings of fact; conclusions of law and order for

judgment and judgment, pe sll affirmed the board’s denial

of the variance request as a valid exercise of its power and

denied Plaintiff's requested relief for a temporary restraining

order and temporary injunction against enforcement of

Benton County Development Code, Ordinance No. 242. See

Kismet Investors, Inc. v. County of Benton, File No. 05-C5-

98-001240, findings of fact, conclusions of law, and order for

judgment and judgment, dated April 2, 1999.

Defendant then moved the court for summary

judgment on Counts II, III and IV of thePlaintiff's complaint.

Count II challenged the Constitutionality of the Benton

County Zoning Ordinance on First and Fourteenth

Amendment grounds. Count III challenged the

reasonableness of Benton County Ordinance 242 in its

amortization provision. Count IV challenged the

constitutionality of a taking or damaging of Plaintiff's

property without just compensation in violation of the Fifth

and Fourteenth Amendments of the United States

Constitution and Article I, Section 13 of the Minnesota

Constitution. The court granted summary judgment on

Counts III and IV, but denied summary judgment on Count II

and ordered an evidentiary hearing to be held on the sole

issue of whether Benton County has provided for reasonable

alternative avenues of communication for adult use business

4.29

to ensure freedom of communication rights under the First

and Fourteenth Amendments of the United States

Constitution. The court also denied the Plaintiff's motion to

amend its complaint in light of the passage of new

amendments to Minn. Stat..394.21, Subd. 1a and Minn. Stat.

462.357, Subd. 1c concerning zoning ordinances and

prohibitions on amortization by counties and local

municipalities. See Kismet Investors, Inc. v. County of

Benton, File No. C5-98-1240, findings of fact, conclusions of

law and order for judgment and judgment, dated July 7, 1999.

The evidentiary hearing on Count II was held on

November 12, 1999.

Now having duly considered the arguments of

counsel, the documents and proceedings herein, together with

the applicable law, this Court ORDERS:

The Defendant’s motion for summary judgment on

Count II of the Plaintiff's complaint is GRANTED.

The findings, conclusions, orders and memoranda

from the Court Orders dated April 2, 1999, and July 7, 1999

are incorporated by reference as part of this Order.

The attached memorandum is made part of this Order. —

FINDINGS OF FACT

1. Kismet Investors, Inc., is a 302A Minnesota

corporation incorporated in December of 1996. it has operated

the business known as 2. the Lake” in Benton County,

Minnesota since January 2, 1997. The business features live,

nude dance or cabaret entertainment and is currently doing

business as “The King’s Inn.” The business itself has operated

since September of 1993 under different ownership. At that

time Benton County had a conditional use permit requirement

for all recreational uses, which included adult use facilities. This

previous ordinance was challenged by Plaintiff's predecessors

in interest and was both temporarily and permanently enjoined

by the United States District Court in the District of Minnesota.

See Mga Susu, Inc. v. County of Benton, 853 F. Supp. 1147 (D.

Minn. 1994) and Bukaka, Inc. v. County of Benton, 852 F.

Supp. 807 (D. Minn. 1993).

2. In June of 1993, Benton County was considering

whether, and in what form, to adopt a new adult use zoning

ordinance. A scheduled discussion of the potential regulation

of adult use business was planned and held on June 24, 1993, by

the Benton County Planning and Zoning Commission

(Commission). The Benton County Attorney and Planning and

Zoning Administrator presented information on various legal

aspects of the regulation of adult use businesses. The outline

indicated that any zoning restrictions by Benton County must

be: 1) content-neutral; 2) time, place and manner restrictive; 3)

defined to serve a substantial government interest; and 4) not

unreasonably limit Bris om of communication. As

part of the process of consideration of other ordinances and

study of possible secondary negative effects of adult use

businesses, a copy of the City of St. Cloud, Minnesota adult use

ordinance was also distributed to the Commission.

3. On November 18, 1993, Benton County Planning

and Zoning Commission continued discussion on adult use land

regulations, specifically addressing information regarding

concerns and activities or other municipalities, and their adult

use establishment. Benton County considered numerous other

municipalities’ studies or negative secondary effects of adult use

businesses and was aware of valid land use regulations, which

had been passed, based upon the secondary effects analysis.

The commission unanimously passed a resolution for the county

attorney’s office to further research a possible adult use

ordinance and submit potential ordinance language, which was

proper and enforceable.

4. On May 26, 1994, the Commission held a publicly

noticed meeting in which it considered adopting a proposed

resolution. The proposed resolution stated:

Whereas, The Benton County Planning Commission is

concerned about the possible adverse secondary effects of

sexually oriented businesses on adjacent properties; and

Whereas, The Benton County Planning Commission

upon review of studies conducted by the cities of Phoenix,

/\ 36

Arizona; Indianapolis, Indiana and Austin, Texas is aware of an

increase in overall crime rates in areas near sexually oriented

businesses; and

Whereas, The Benton County Planning Commission

seeks to minimize any potential negative impact on the value

and marketability of land adjacent to sexually oriented

businesses; and

Whereas, The Benton County Planning Commission

hopes to provide space for location of sexually oriented

businesses in appropriately zoned districts in the county,

(emphasis added)

Therefore, it is resolved that the Benton County

Planning Commission shall commence the development and

adoption of an ordinance addressing these concerns.

(Benton County Planning Commission, Minutes from

Planning Session on May 26, 1994). The Planning Commission

approved the proposed resolution with the only modification

being replacement of the word “hopes” with the word “intends”

5. On June 23, 1994, the Commission held another

publicly noticed open work session on a proposed adult use

ordinance. It discussed specific language from the City of

Ramsey in Anoka County, Minnesota, separate distances,

amortization periods and enforcement of zoning ordinances.

6. On June 28, 1994, the Benton County published

notice of a final public hearing where both the commission an d

the Benton County Board had an intent to amend the Benton

/).3j

County Development Code regarding adult use establishments

in Benton County. The notice included specific language of a

proposed ordinance for consideration and request for public

input.

7. On July 14, 1994, the Commission had its final

meeting for consideration of the auld use amendment. No one

at the meeting spoke in opposition to the amendment. A

motion to approve the amendment passed on a unanimous vote.

Neither the Plaintiff nor the Plaintiff's predecessor in interest

attended this or any other Commission meeting concerning the

regulation of adult use facilities.

8. On July 19, 1994, the Benton County Board held a

publically noticed and regularly scheduled meeting. Proposed

amendments to the County Development Code regarding adult

uses were presented. The Board did not receive any comments

for or against the proposed ainendments. The Board voted

unanimously to adopt the amendments, which became Benton

County Ordinance No. 242.

9. The adopted ordinance provides for an amortization

period as expressed in Benton County Development Code

7.10.3. It state that nonconforming uses must cease at the end

of approximately four years:

Adult uses established prior to the enactment of Benton

County Ordinance 235 shall be permitted and regulated as

‘eee AES ae ss

| Ae

nonconforming uses until July 31, 1998 at which time such uses

shall become unlawful.

10. The ordinance also provides a 500 foot setback

requirement of adult use facilities from residentially-zoned

areas. Benton County Development Code, 7.10.2 state:

“No adult use shall be located with five hundred (500)

feet of;

1. Any area zoned R-1, R-2 or R-3.” [residential areas].

“Adult use facilities are allowed to operate in B, B-2, [1

and I-2 zones.”

11. The Plaintiff purchased the business know as the

King’s Inn in January of 1997 and subsequently purchased the

real property, which is the subject of this action, one year later

in 1998 for approximately $250,000 by contract for deed. At

the time of the purchase of the real property by the Plaintiff,

theBenton County Adult Use Ordinance No. 242 had been in

existence for approximately three and one-half years and

compliance with the setback provisions of the ordinance

required the adult use to cease within approximately six (6)

months from the date of the real property purchase.

12. Plaintiff's current business is lawfully in a B zoned

area, however, it is within 500 br a residentially zoned area

and is located approximately 150 feet from the nearest

residence. This makes the Plaintiffs business a nonconforming

A 33

use and is the subject of the instant case. The amortization

period of the ordinance allowed the Plaintiff to operate the

King’s Inn as an adult use business until July 31, 1998.

13. On July 22, 1998, Plaintiff applied for a variance

from the Board to continue operations after the end of the

amortization period. The application was denied on September

17, 1998. This lawsuit was commenced in October of 1998.

ALTERNATIVE SITES

14. Ronald Peterson, the Benton County Development

Director, who oversees county planning and zoning

administration, identified 101 sites in unincorporated Benton

County that are available and properly zoned for adult uses such

as the King’s Inn. He testified that the identified sites had road

access and were visible from nearby roadway; that they either

had existing buildings or would permit a building; were not

encumbered by wetlands; would not be precluded by septic

System issue; and were more than 500 feet from any

residentially zoned area.

15. Ronald Peterson was a credible witness and the

court accepts as fact that there are 101 properly zoned sites

reasonable available in Benton County as alternative sites for a

business such as the King’s Inn, except as noted in No. 20

below.

16. Plaintiff's expert, Robert McLaughlin, would

disqualify 57 of the Mie 0 by interpreting the county

ordinance to require setback measurements from boundary line

to boundary line. The court rejected this interpretation as

contrived and unreasonable and not consistent with the county’s

application of the setback requirements.

17. McLaughlin then disqualifies all the remaining sites

on one or more basis such as access, size, current use or some

other reason such as his interpretation that the adult use would

trigger the need for a permit requiring parking to be solely

determined b the county and therefore subject to whimsical

discretionary requirements. Mr. McLaughlin’s testimony is not

credible and the court rejects his conclusions except as noted in

No. 20 below.

18. Curtis Curry testified on behalf of the Plaintiff. Mr.

Curry is a builder and carpenter and testified to the difficulties

he experienced in getting appropriate building permits when

working on “adult use” businesses. Mr. Curry was not a

credible witness and his testimony as largely irrelevant as

Benton County does not require building, electrical or plumbing

permits.

19. In this southeast section of Minden Township,

Plaintiff disqualified a site because his expert concluded there

was a shrine and park in the southeast quadrant of the

- intersection and that prohibit placement of an adult use facility.

: (\.35

Plaintiff was mistaken. There is no park at that location and the

shrine is a private display and not a county park or exhibit.

20. One identified site located in Sec.10, west of

Highway 10, in Watab Township had no access. While there is

no testimony to indicate whether access is possible or practical,

the court finds that at this time this location is not a reasonable

alternative site.

21. The population of Benton County is 30,000 and

approximately 15, 000 of those people live in unincorporated

portions of the county.

22. At the present time there is one adult use

establishment in unincorporated Benton County.

23. There is very little for adult use establishments in

the unincorporated areas of Benton County as evidenced by the

existence of only one establishment and the lack of any

application for additional uses.

24. Six of the identified sites are occupied by active

businesses. This fact makes them less available but does not

exclude them from the poo! of alternative sites.

CONCLUSIONS CF LAW

1. There are 100 available sites without significant legal

impediments to their use as adult entertainment businesses and

they provide reasonable alternative avenues of communication.

2. The proper method of measuring setbacks under the

A.U

A%<,

Benton County Development Code is from the building or

portion of the building that incorporates the adult use in those

instances where this term is included in the definition of the

particular type of adult use, or to the place where the sexually

-oriented activity is taking place with respect to other adult

uses.

3. The proper method of measuring segregated use

setbacks is to the property line ofa residentially zoned area with

respect to residential area setbacks and to the buildings which

constitute the segregated use, such as churches, daycare centers

_and schools. With respect to other segregated uses. .

4. The off-street parking provisions and land use permit

provisions of the ordinance do not interfere with the availability

of the adult use sites.

5. The Benton County Adult Use Ordinance is

constitutional in all respects.

6. Neither party is entitled to costs or disbursements.

ORDER

IT IS ORDERED:

1. The adult use provisions of the Benton County

Development Code are declared constitutional.

LET JUDGMENT BE ENTERED ACCORDINGLY.

BY THE COURT:

dated: 12/22/99 /s/

James Hoolihan

Judge of District Court

JUDGMENT

I hereby certify that the foregoing constitutes the judgment of

this Court.

Dated: 12/27/99 TIMOTHY R. ROBERTS

Court Administrator

/s/

Deputy Ct. Administrator

N39

MEMO

Summary judgment “shall be rendered forthwith if the

pleadings, depositions, answers to interrogatories and

admissions on file, together with the affidavits of any, show that

there is no genuine issue as to any material fact and that either

party is entitled to a judgment as a matter of law.” Minn.R.

Civ. P. 56.03. The party moving for summary judgment must

demonstrate that no genuine ‘ssue of material fact exists. Thiele

v. Stich, 425 N.W. 2d 580, 583 (Minn. 1988). The evidence

must be viewed in the light most favorable to the non-moving

party. Offerdahl v. University of Minnesota, 426 N.W. 2d 425,

427 (Minn. 1988). The non-moving party may not rest‘on mere

averments or denials of the adverse party’s pleading but must

present specific facts showing that there is a genuine issue for

trial. See Minn. R. Civ. Proc. 56.05. The mere existence of a

scintilla of evidence in support of the plaintiff's position will be

insufficient; there must be evidence on which the jury could

reasonably find for the plaintiff. Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 91 L. Ed. 2d 202

(1986). After the moving party makes out a prima facie case,

the non-moving party must come forward with facts that raise

a genuine issue for trial. Thiele, 425 N.W. 2d at 583 (citing

Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)).

The court does not resolve or decide issues of fact, but

A.38

only til ee of material fact to be

tried. Nord v. Herreid, 305 N.W. 2d 337, 339 (Minn.1981). If

a plaintiff cannot support each essential element of his or her

claim, summary judgment must be granted because a complete

failure of proof regarding an essential element necessarily

renders all other facts immaterial. See Nicollet Restoration,

Inc. v. City of St. Paul, 533 N.W. 2d 845, 848 (Minn. 1995)

(citing Celotex, 477 U.S. at 322-23). Summary judgment

should not be granted if reasonable person, after reviewing the

evidence, might reach different conclusions. Honathan vy.

Kvaal, 403 N.W. 2d 256, 259 (Minn. Ct. App. 1989).

Speculation or general assertions, and promises to produce

evidence at trial are not sufficient to create a genuine issue of

material fact for trial. Bob Useldinger & Sons Inc. v.

Hangsleben, 505 N.W. 2d 323, 328 (Minn. 1993) (speculation);

Erickson v. General United Life Ins. Co., 256 N.W. 2d 255,

259 (Minn. 1977) (general assertions).

I. Keasonableness of Benton County Adult use ordinance

in providing alternative avenues of communication

In Minnesota, the constitutionality of municipal

ordinances is presumed, including adult use ordinances, and the

burden of proving otherwise rests on the party attacking its

validity. City of Ramsey v. Holmberg, 548 N.W. 2d 302, 305

(Minn. Ct. App. 1996) (citing City of St. Paul v. Dalsin, 245

146

minn. 325, 329 71 N.W. 2d 855, 858, (1955)). Establishment

which offer nude dancing or nude cabaret may be entitled to

- First and Fourteenth Amendment protection as a form of

expression, see Koppinger v. City of Fairmont, 311 Minn. 186,

248 N.W. 2d 708, 715 (Minn. 1975); California v. LaRue, 409

U.S. 109, 118, 93 S. Ct. 390, 397, 34 L. Ed. 2d 342 (1972). In

order to survive First Amendment scrutiny, such regulations

must be content-neutral, “designed to serve a substantial

governmental interest” and cannot unreasonably limit alternative

avenues of communication. City of Ramsey, 548 N.W. 2d at

305 (quoting Renton, 475 U.S. at 46, 106 S. Ct. at 928).

Where an ordinance does not ban adult uses completely, but

merely limits the areas in which they may operate, it is properly

analyzed as a time, place and manner regulation.

City of Ramsey, 548 N.W. 2d at 305. See City of Ramsey v.

Playtime Theaters Inc., 475 U.S., 41, 46, S. Ct. 925, 928, 89 L.

Ed. 2d 28 (1986).

Since Benton County ordinance 242 does not ban adult

‘use facilities in the County completely and attempts to limit the

areas in which they may operate, the regulation is a time, place

and manner regulation and is controlled by and properly

analyzed under the test in City of Ramsey v. Renton v. Playtime

Theaters. The first and second parts of the Renton test were

previously analyzed by this Court and the ordinance was found

AY]

to be constitutional as content-neutral and narrowly tailored to

serve a substantial governmental interest. (April 1, 1999 and

July 7, 1999 orders).

The third part of the Renton test is to determine whether

Benton County’s ordinance provides reasonable alternative

avenues of communication for the exercise of that First

Amendment right.

In making this determination, the First Amendment

requires Benton County to refrain from effectively denying the

Plaintiff a reasonable opportunity to operate or open an adult

use facility within the County. See City of Renton, 475 U.S. at

54, 106 S. Ct. at 932. Under Renton, when an adult use

ordinance restricts free speech in order to control the negative

effect of adult establishments, it “must provide reasonable

alternative avenues of communication.” City of Crystal 569

N.W 2d at 230 (citing City of Renton, 475 U.S. at 50, 106 S.

Ct. at 930). A city cannot ban adult uses totally or fail to

provide reasonable sites for relocation that are sufficient for

uses existing within its borders at the time of the enactment,

thereby forcing a business to close. Alexander . City of

Minneapolis, 928 F. 2d 278, 283-84 (8 Cir. 1991). The

Supreme Court has stated this does not mean “that the First

Amendment compels the Government to ensure that adult

theaters, or any other kinds of speech-related businesses for that

AY2

matter, will be able to obtain sites at bargain prices.” American

Mini Theaters, Inc., 427 U.S. at 71, n. 35, 96 S. Ct. at 2453, n.

35 (plurality opinion). Each business “must fend for themselves

in the real estate, on an equal footing with other prospective

purchasers and lessees...” City of Renton, 475 U.S. at 54, 106

S. Ct. at 932. Ifan ordinance provides potential relocation sites

in accessible zoned areas in the community, such ordinances do

not unreasonably limit alternative avenues of communication.

Holmberg v. City of Ramsey, 12 F. 3d 140, 144 (8" Cir. 1993).

In deciding this issue, the Court must look at specific

evidence of the amount of land open to use for adult use

businesses. Providing fifteen (15) to seventeen (17) possible

locations has been found sufficient to meet the requirements of

reasonableness. DiMa Corp. v. City of St. Cloud, 562 N.W. 2d

312, 233 (Minn. Ct. App. 1997). In Holmberg, providing 35

percent of the city’s land, both developed and undeveloped,

zoned for commercial uses provided reasonable opportunity,

despite claim that relocation costs would put owner out of

business. Holmberg, 12 F. 3d at 144.

In the above-entitled action, the Defendant asserts that

there are over 2400 acres available for commercial and

industrial uses in Benton County. Of these the County claims

that there are 101 commercial and industrial sites within the

county where a locating adult use business would not run afoul

of setbacks. AS 12

Plaintiff contends that 57 of the sites would be

disqualified by a property line to property line measurement and

that much of the land has subdivision requirements that would

leave its availability at the discretion of the Benton County

Board.

Where statutory language is clear and unambiguous a

court must effect to that plain language. State v. Burrell, 506

N.W. 2d 34, 37 (Minn.Ct. App. 1993). The Benton County

Development Code defines “setback” as: the minimum

horizontal distance betweer. a Structure, sewage treatment

system, or other facility and an ordinary high water level,

sewage treatment system, top of a bluff, road, highway,

property line, or other facility (emphasis added). Benton

County Development Code 3.155. The code further defines an

“adult cabaret” as: a building or portion of a building used for

providing dancing or other live entertainment... Benton County

Development Code, 7.10.1 Sec. 7.10.2 provides that the

setback is from the “adult use” to “any area zoned R-1, R-2. Or

R-3.”

From this language, it is clear and unambiguous to the

court that the setback as defined in the Benton County Code

requires measurement from the adult use facility to the property

line of the residentially zoned area. In other words, the setback

requirement of 500 feet is al from the building providing

adult use to the property line of the adjacent residence or

residences. It is therefore reasonable for the Benton County

Ordinance 242 to requires adult use facilities to not be located

within 500 feet of residential areas so as not to restrict

alternative avenue of communication for those facilities.

Plaintiff also contends that some sites are too remote.

With the exception of one site noted by the court, all the sites

are along Trunk Highway 10 or 23, or along State Highways 25

or 95, or along paved county highways. Access is easily

available to the sites from these roads. The sites meet the legal

standard of available access. Woodall IIT. 49 F. 3d at 1126 (site

not to be excluded simply because not near heavily trafficked

area).

Plaintiff contends 6 sites should be excluded because the

parcels are currently occupied by large, active businesses. No

evidence was presented to the court to show that these parcels

were unavailable. Mere use by arother business does not in and

of itself render a site legally unavailable. Hickerson v. City of

New York, 146 F. 3d 99 (2™ Cir. 1998).

Plaintiff finally contends that all the sites are legally

inadequate because they are available only in the discretion of

the governmental officials of Benton County. The substance of

Plaintiff's argument is changing from a current industrial or

N\4c

commercial use to an adult use would trigger a zoning review

and the county could require off-street parking spaces “as

determined by the County Planning Commission.” (9 Sec. 9.2.1

(c), Benton County Development Code). Plaintiff argues that

this “{unbridled discretion” could be used to impose impossible

to provide pking requirements, thus preventing location of an

adult use business.

This argument is unfounded in fact and highly

speculative in outcome. Many of the identified sites are large

enough to accommodate any reasonable parking requirements.

Counties are required by statute to act on zoning matters within

60 days of a request. Minn. Stat. Sec. 15.99,Subd/ 2. If the

county were to act in an arbitrary or unreasonable manner with

respect to parking or any other zoning issue, Plaintiff would

have an adequate remedy at law. Minn. Stat. 606.01 gives the

right to petition for writ of certiorari if there is no right of

judicial review. Upon review b writ of certiorari, any decision

that is “arbitrary, oppressive, unreasonable, fraudulent, under an

erroneous theory of law, or without any evidence to support

it,will be reversed. Dietz v. Dodge County, 47 N.W. 2d 237,

239 (Minn. 1992); Scott County Lumber v. City of Shakopee,

471 N.W. 2d 721, 727 (Minn. Ct. App. 1988), review denied

(Minn. Mar. 23, 1988).

Plaintiff also raised concerns that the zoning

ANG

administrator might hinder the issuance of a land permit and

thus prohibit an adult use business. The zoning administrator is

required to follow the ordinance and make decisions to

accomplish the purpose of the ordinance. An appeal may be

taken from any decision by the zoning administrator to a Board

of Adjustment. Benton County Development Code 11.4.7.

Minn. Stat. 394.27, Subd. 9 provides an appeal to the District

Court from a determination by the Board of Adjustment.

Consequently, any arbitrary or capricious decision by the zoning

administrator in the issuance of a land use permit would be

subject to appeal and review. The mere fact that the applicants

must provided information to a zoning administrator does not

render the ordinance impermissible, as long as a mechanism of

review is available. Mom N Pops, Inc. v. City of Charlotte,

162 F. 3d 1155 (4" Cir. 1998) (unpublished); Chesapeake B &

M, Inc. v. Harford City., 58 F. 3d 1005 (4 Cir.) cert. denied,

516 U.S. 1010 (1995).

CONCLUSION -

The County has identified 101 sites in unincorporated

Benton Count. The court finds 100 of those sites to be

reasonably available for location by an adult use facility.

Plaintiff must comply with ordinary land use regulations, which

apply to all commercial businesses. Any arbitrary or capricious

position taken by the county is subject to administrative and

Benton County has provided reasonable alterative

avenues of communication. Its adult use ordinance is

constitutional and enforceable.

judicial review.

AY8

STATE OF MINNESOTA IN DISTRICT COURT

COUNTY OF BENTON SEVENTH JUDICIAL

DITRICT |

Kismet Investors, Inc., a Court File No. CO-98-

1240

Minnesota corporation,

| FINDINGS OF FACT,

Plaintiff, CONCLUSIONS OF LAW

ORDER FOR PARTIAL

SUMMARY JUDGMENT,

County of Benton,

Defendant.

The above-entitled matter came before

Honorable James W. Hoolihan, Judge of District Court,

on the 9" day of June 1999.

Randall D.B. Tigue, Esq., appeared on behalf of

the Plaintiff, Kismei Investors, Inc.

Kenneth H. Bayliss, Esq., appeared on behalf of

Defendant, County of Benton.

4 UG

The Court denied the Plaintiff's zoning appeal in

Count I of the Complaint in Findings of Fact,

Conclusions of Law and an Order of Judgment dated

April 2; 1999. The Defendant nowmoves the Court

summary judgment against the Plaintiff, Kismet

Investors, Inc. on Count II, III, and IV of the Plaintiff’s

Complaint. Count II of the Plaintiff's Complaint

challenges the constitutional validity of

the County’s zoning ordinance which regulates adult use

facilities within Benton County. Count III challenges

the reasonableness of Benton County Ordinance 242 in

its amortization provision. Count IV contends that

Benton County Ordinance 242 provides for an

unconstitutional taking of Plaintiff's property without

just compensation in violation of the Fifth and

Fourteenth Amendments of the United States

Constitution and Article I, Section 13 of the Minnesota

A.49

Constitution. /) LO

The Plaintiff has brought a motion to amend the

original Complaint in light of the passage of new

amendments to Minn. Stat. §394.21, Subd. 1a and Minn.

Stat. §462.357, Subd. 1c concerning zoning ordinances

and prohibitions on amortization by counties and local

municipalities.

Now, having duly considered the arguments of

counsel, the documents and proceedings herein, together

with the applicable law, this Court ORDERS:

The Defendant’s motion for summary judgment

on Count II of the Plaintiff's Complaint is DENIED.

An evidentiary hearing shall be scheduled on the sole

issue of whether Benton County has provided for

reasonable alternative avenues of cmmunication for

adult use Businesses.

The Defendant’s motion for summary judgment

on Count III of the Plaintiff's Complaint is GRANTED.

Ds;

The Plaintiff's motion to amend the original

Complaint in light of recently enacted Amendments to

Minn. Stat. § 394.21 and Minn. Stat. § 462.357 is

DENIED.

The attached memorandum constitutes the Findings of

Fact, Conclusions of Law, Order and Judgment of the

Court.

MEMORANDUM

Findings of Fact

Kismet Investors, Inc., the Plaintiff herein, is a 302A

corporation incorporated in December of 1996 under

Minnesota law. It has operated the business known as

“King’s on the Lake” in Benton County, Minnesota

since January 2, 1997. The business features live, nude

dance or cabaret entertainment and is currently doing

business as “The King’s Inn.” The business itself has

operated since September of 1993 under different

ownership. At that time, Benton County, the Defendant

herein, had a conditional use permit requirement for all

recreational uses, which included adult use facilities.

This previous ordinance was challenged by Plaintiffs

predecessors in interest and was both temporarily and

permanently‘enjoined by the United States

District Court in the District of Minnesota. See Mga

Susu, Inc. v. County of Benton, 853 F.Supp. 1147

(D.Minn. 1994) and Bukaka, Inc. v. County of Benton,

852 F. Supp. 807 (D. Minn.1993).

A sz

In June of 1993, Benton County was considering

whether, and in what form to adopt a new adult use

zoning ordinance. A scheduled discussion of the

potential regulation of adult use businesses was planned

and held on June 24, 1993 by the Benton County

Planning and Zoning Commission (Commission).

Assistant Benton County Attorney, Robert Raupp and

Planning and Zoning Administrator, Lynn Machula

presented information on the topic. Mr. Raupp

distributed a one-page outline on various legal aspects

of the regulation of adult use businesses. The outline

indicated that any zoning restrictions by Benton County

must be: 1) content-neutral; 2) time, place and manner

restrictions; 3) designed to serve a substantial

government interest; and 4) cannot unreasonably limit

alternative avenues of communication. As part of the

process of consideration of other ordinances and study

of possible secondary negative effects of adult use

businesses, a copy of the City of St. Cloud, Minnesota

adult use ordinance was also distributed to

the Commission. On July 22, 1993, Benton County

identified adult use facilities as continued topic of

discussion as it analyzed land use regulations and

ordinances. No adult use facilities were operating in

Benton County at this time. In September of 1993, the

Plaintiff's predecessor in interest, Bukaka, Inc., began

operation of an adult use business featuring nude dance

entertainment at the property which is the subject of the

instant case. A former ordinance in Benton County

A 52

N53

required all adult use facilities to obtain conditional use

permits. This ordinance was challenged and enjoined in

Mga Susu, Inc. v. County of Benton. 853 F. Supp. 1147

(D. Minn. 1994) and Bukaka, Inc. v. County of Benton,

852 F.Supp. 807 (D. Minn. 1993).

On November 18, 1993, Benton County Planning

and Zoning Commission continued discussion on adult

use land regulations, specifically addressing information

regarding concerns and activities of other municipalities

and their adult use establishments. Benton County

considered numerous other municipalities’ studies of

negative secondary effects of adult use businesses and

was aware of valid land use regulations which had been—

passed based upon the secondary effects analysis. The

Commission unanimously passes a resolution for the

County Attorney’s office to further research a possible

adult use ordinance and submit potential ordinance

language which was proper and enforceable.

On December 9, 1993, Mr. Raupp presented an update

on the status of the investigation of studies and

ordinances from other jurisdictions regarding adult use

land regulations. Mr. Raupp reported that he had

requested studies on adult use establishments for the

Commission to consider for this type of land use

activity. A neighborhood task force also presented

concerns to the Commission regarding negative

secondary effects of nude dancing establishments.

On December 28, 1993, Benton County published notice

of its intent to amend the County Development Code

A. SY

regarding adult use activities and to adopt an interim

ordinance. The notice scheduled both a Commission

meeting and a County Board meeting on the interim

ordinance. As required under Minnesota law, Benton

County published notice of open hearings on the interim

ordinance for public attendance on January 13™ and 18”

of 1994.

On January 13, 1994, a public hearing was held by the

Benton County Planning and Zoning Commission which

considered and took public comment upon an interim

ordinance regulating adult use facilities. The interim

ordinance prevented the construction or operation of

new adult use facilities. The interim ordinance

prevented the construction or operation of new adult use

facilities and had no impact on existing adult use

facilities. Two citizens spoke in favor of the interim

ordinance. No representative of the Plaintiff or

Plaintiff's predecessor in interest attended the hearing.

No person spoke against the interim ordinance.

On January 18, 1994, the Benton County Board

of Commissioners held a meeting and adopted an

interim ordinance (#236) to protect the planning process

concerning adult use facilities. No person from the

public spoke against the interim ordinance. Neither the

Plaintiff, nor the Plaintiff's predecessor in interest spoke

against the ordinance. The interim ordinance was

scheduled to expire on July 31, 1994 due to time

constraints imposed by the Minnesota Legislature.

On January 27, 1994, the Commission held a

work session meeting to continue to examine the need

A.54

N.ss

for adult use land regulations. The Commission

considered court interpretations of the rights of freedom

of expression under the First Amendment of the United

States Constitution and negative effects of adult use

facilities. The Commission looked at adult use

ordinances from St. Cloud, Minnesota; Ramsey,

Minnesota; Boston, Massachusetts; and Detroit,

Michigan. The Commission also discussed the

reasonable length of An amortization period based upon

the recoupment of capital investment. On February 24,

1994, the Commission held a meeting and discussed

issues regarding an adult use ordinance. The issues

included: First Amendment protection of speech and

expression, offering alternative avenues of

communication for adult use facilities, setback distances

from protected zoned area, property values and

marketability, crime Statistics, coordination with the

Benton County Plan, and regulation of negative

secondary effects as the focus of any regulation.

On March 24, 1994, the Commission held a

work session which provided published notice and was

open to the public. Discussed were property values

histories in Anoka and Morrison Counties, Minnesota.

On May 26, 1994, the Commission held a

publicly noticed meeting in which it Considered

adopting a proposed resolution. The proposed resolution

Stated:

Whereas, the Benton County Planning

Commission is concerned about the possible adverse

secondary effects of Sexually Oriented Businesses on

A. 55 a

adjacent properties, and;

Whereas, the Benton County Planning Commission,

upon review of studies Conducted by the cities of

Phoenix, Arizona; Indianapolis, Indiana and Austin,

Texas is aware of an increase in overall crime rates in

areas near Sexually Oriented Businesses, and:

Whereas, the Benton County Planning Commission

wished to minimize the impact of traffic

congestion, glare and noise generated by the normal

operation of Sexually Oriented Businesses on adjacent

properties, and:

Whereas, the Benton County Planning Commission

seeks to minimize any potential negative impact on the

value and marketability of land adjacent to Sexually

Oriented Businesses, and;

Whereas, the Benton County Planning Commission

hopes to provide space for location of Sexually Oriented

Businesses in appropriately zoned districts in the

County, (emphasis added) (Benton County Planning

Commission, Minutes from Planning Session on May

26, 1994). The Planning Commission approved the

proposed resolution with the only modification being

replacement of the word “hopes’ with the word

“intends.”

The Commission resolved that concerns existed

regarding negative secondary effects

oust « $6

AST

related to adult uses of property and that it wished to

minimize the impact of traffic on the area,

glare and noise from any adult use establishments and

intended to protect property values and marketability

from any potential negative secondary effects of adult

use facilities. On June 23, 1994, the Commission held

another publicly noticed open work session on a

proposed adult use ordinance. It discussed specific

language from the City of Ramsey in Anoka

County, Minnesota, separate distances, amortization

periods and enforcement of zoning ordinances.

On June 28, 1994, Benton County published

notice of a final public hearing where both

the Commission and the Benton County had an intent to

amend the Benton County Development Code regarding

adult use establishments in Benton County. The notice

included Specific language of a proposed ordinance for

consideration and request for public input.

On July 14, 1994, the Commission had its final meeting

for consideration of the adult use Amendment. No one

at the meeting spoke in Opposition to the amendment. A

motion to approve the amendment passes on a

unanimous vote. Neither the Plaintiff not the Plaintiffs

predecessor in interest attended this or any other

Commission meeting concerning the regulation of adult

use facilities. :

On July 19, 1994, the Benton County Board held a

publicly noticed and regularly scheduled meeting. Ms.

4) Sg

Machula presented proposed amendments to the County

Development Code regarding adult use. The Board

voted unanimously to adopt the amendments, which

became Benton County Ordinance 242. The

preamble of the ordinance states the Commission

studied and reviewed various reports relating to the

secondary effects of adult uses, including reports from

St. Paul, MN; the Office of the Minnesota Attorney

General; Indianapolis, IN; Rochester, MN; Los Angeles,

CA; Phoenix, AR; Adams County, CO; Amarillo, TX;

and Austin, TX. The preamble specifically noted the

Amarillo, TX report which found increased traffic, noise

and glare from adult uses and the St. Paul, Austin, Los

Angeles and Indianapolis reports which found a

potentially negative impact on property values adjacent

to adult uses. The preamble expressly states an intent to

allow adult uses in the County in appropriately zoned

areas.

The adopted ordinance provides for an amortization

period as expressed in Benton County Development

Code 7.10.3. It states that nonconforming uses must

cease at the end of Approximately found year:

Adult uses established prior to the enactment of Benton

County Ordinance 235 shall be permitted and regulated

as nonconforming uses until July 31, 1998 at which time

such uses shall become unlawful. The ordinance also

provides a 500 foot setback requirement of adult use

facilities from esidentially-zoned areas. Benton County

Development Code, 7.10.2 states:

“No adult use shall be alt within five hundred (500)

feet of: Any area zoned R-1, R-2, or R-3.” [residential

areas].

“Adult use facilities are allowed to

operated in B, B-2, I-1 and IJ-2 zones.”

The Plaintiff purchased the business knows as

The King’s Inn in January of 1997 and subsequently

purchased the real property, which is the subject of this

action, one year later in 1998 for approximately

$250,000 by contract for deed. At the time of the

purchase of the real property by the Plaintiff, the Benton

County Adult Used Ordinance #242 had been in istence

for approximately 3 14 years and compliance with the

setback provisions of the ordinance required the adult

used to cease within approximately six (6) months from

the date of the real property purchase. Plaintiffs current

business is lawfully in a B zoned area, however, it is

within 500 feet of a residentially-zoned area and is

located approximately 150 feet from the nearest

residence. This makes the Plaintiff's business a

nonconforming use and is the subject of the instant case.

The amortization period of the ordinance allowed the ~

Plaintiff to operated The King’s Inn as an

adult use business until July 31, 1998.

On July 22, 1998, Plaintiff applied for a variance

from the Board to continue operations after the end for

the amortization period. The application was received

by the Board approximately nine (9) days prior to the

4.Go

end of the amortization period. Hearings on the request

for a variance were held by the Board on August 20,

1998 and September 17, 1998. The board members

made a physical, on-site inspection of the property prior

to the August 20, 1998 hearing.

On August 20, 1998, the Board held a public

hearing for consideration of the Plaintiff's request. The

Plaintiff presented information from a planning review

performed by the Plaintiff's consultant, R. Bruce

McLaughlin. Plaintiff presented information regarding

the cost of improvements which were made to the

property and claimed it would suffer hardship if the

variance request was not granted. The Board decided to

table the request to the next scheduled Board meeting,

study and examine the information provided to it and

schedule a second on-site inspection of the property.

The Board inspected the property a second time

before the September 17, 1998 meeting to reconsider the

pplication for a variance from the Plaintiff.

The Board met on September 17, 1998 to

consider the variance application of the Plaintiff. A

public hearing was again held and the hearing was

recorded. The Board heard from several members of the

public concerning the granting of the variance for

continued operation of the adult business. At the

conclusion of the meeting, the Board denied the

requested variance and on October 15, 1998 issued

written findings on the separate factors required for

A. 6/

granting the variance. The Board specifically found that

the Plaintiff proposed to continue to operated an adult

use facility after the conclusion of the amortization

period. They also found:

(a) the proposed use is adult use, and is not

_ prohibited in the business

district in which it is located;

a) the variance would not be in

harmony with the general purposes

and intent of the Ordinance;

b) the Plaintiff had not demonstrated a

hardship;

c) the concerns of the Plaintiff were

solely economic:

d) the property could be put to an

alternative reasonable use; the Plaintiff failed to

demonstrated a plight that is due to circumstances

unique to the property;

e) the Plaintiff purchased the property

with constructive knowledge of the Ordinance;

f) the variance, if granted, would alter

the family neighborhood character of the locality.

The Plaintiff subsequently brought a four (4) count

complaint against the Defendant. The parties agreed to

bifurcate the issues and have the Court address the first

count which challenged the validity of the Benton

County Board of Adjustment’s denial of the variance

request.

In Findings of Fact, Conclusions of Law, Order for

Judgment and Judgment, this Court affirmed the Board’s

A.o2

denial of the variance request as a valid exercise of its

power and denied Plaintiff's requested relief for a

temporary restraining order and a temporary injunction

against enforcement of Benton County Development

Code, Ordinance #242. See Kismet Investors, Inc.

v. County of Benton, File No. 05-C5-98-001240,

Findings of Fact, Conclusions of Law, Order for

Judgment and Judgment, dated Apnil 2, 1999.

The Defendant now moves the Court for an order

directing the entry of summary Judgment in its favor and

against the Plaintiff, Kismet Investor, Inc., in accordance

with Rule 56 of the Minnesota Rules of Civil Procedure

on Counts II, III, and IV of the Plaintiff's Complaint.

DISCUSSION AND CONCLUSIONS OF LAW

Summary judgment “shall be rendered forthwith

if the pleadings, depositions, answers to interrogatories,

and admissions on file, together with the affidavits, if

any, show that there is no genuine issue as to any

material fact and that either party is entitled to a

judgment as a matter of law.” Minn. R. Ciy. P. 56.03.

The party moving for summary judgment must

demonstrate that no genuine issue of material fact

exists. Thiele v. Stich, 425 N.W.2d 580, 583 (Minn.

1988).

The evidence must be 322. the light most-favorable to

the non-moving party. Offerdahl v. University of Minnesota,

426 N.W. 2d 425, 427 (Minn. 1988). The non-moving party

may not rest on mere averments or denials of the adverse

party's pleading but must present specific facts showing that

there is a genuine issue for trial. See Minn. R. Civ. Proc.

56.05. The mere existence of a scintilla of evidence in

support of the plaintiff's position will be insufficient, there

must be evidence on which the jury could reasonably find for

the plaintiff. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

252, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). After the

moving party makes out a prima facie case, the non-moving

party must come forward with facts that raise a genuine issue

for trial. Thiele, 425 N.>W. 2d at 583 (citing Celotex Corp.

v. Catrett, 477 U.S. 317, 324 (1986).

The court does niot resolve or decide issues of fact,

but only determines whether there are issues of material fact

to be tried. Nord v. Herreid, 305 N.W. 2d 337, 339 (Minn.

1981). Ifa plaintiff cannot support each essential element of

his or her claim, summary judgment must be granted because

a complete failure of proof regarding an essential element

necessarily renders all other facts immaterial. See Nicolle

Restoration, Inc v. City of St. Paul, 533 N.W. 2d 845, 848

(Minn. 1995) (citing Celotex, 477 U.S. at 322-23). Summary

judgment should not be granted if reasonable persons, after

reviewing the evidence, might reach different conclusions.

Jonathan v. Kvaal, 403 N.W. 2d 256, 259 (Minn. Ct. App.

1989). Speculation or general assertions, and promises to

produce evidence at trial are not sufficient to create a genuine

issue of material fact for trial. Bob Useldinger & Sons, Imc.

v. Hangsleben, 505 N.W. 2d 323, 328 (Minn. 1993)

(speculation); Erickson v. General United Life Ins. Co. 256

N.W. 2d 255, 259 (Minn. 1977) (general assertions).

I. Constitutionality of Benton County Adult use

Ordinance.

In Minnesota, the constitutionality of municipal

ordinances is presumed, including adult use

ordinances, and the burden of proving otherwise rests

on the party attacking its validity. City of Ramsey v.

Holmberg, 548 N.W. 2d 302, 305 (Minn. Ct. App.

1996) (citing City of St.Paul v. Dalsin, 245 minn.

325, 329, 71 N.W. 2d 855, 858 (1955)).

Establishments which offer nude dancing or nude

cabaret may be entitled to First Amendment

protection as a form of expression. See Koppinger v.

City of Fairmont, 311 Minn. 186, 248 N.W. 2d 708,

715 (Minn. 1976); California v. LaRue 409 U.S. 109,

118, 93 S. Ct. 390, 397, 34 L. Ed. 2d 342 (1972). In

order to survive First Amendment scrutiny, such

regulations must be content-neutral, “designed to

serve a substantial governmental interest” and cannot

unreasonably limit alternative avenues of

communication. City of Ramsey, 548 N.W. 2d at 305

(quoting Renton, 475 U.S. at 46, 106 S. Ct. at 928).

Where an ordinance does not ban adult uses

completely, but merely limits the areas in which they

may operate, it is properly analyzed as a time, place

and manner regulation. City of Ramsey, 548 N.W. 2d

at 305. See City of Renton v. Playtime Theaters,

Inc., 475 U.S. 41, 46,106 S. Ct. 925, 928, 89 L. Ed.

2d 29 (1986).

Since Benton County Ordinance No. 242 does not

ban adult use facilities in the County completely and attempts

to limit the areas in which they may operate, the regulation is

a time, place and manner regulation and is controlled by and

properly analyzed under the test in City of Renton v. Playtime

Theaters.

In applying the Renton rest, the first task is to

determine whether the ordinance is “content-neutral.” JLO

Investments, Inc. v. City of Rochester, 25 F. 3d 1413, 1416

(8" Cir. 1994). The term “content-neutral” is a term of art.

ALS

The fundamental principle that underlies the Court’s concern

with “content-based” speech regulations is that “government

may not grant the use of a forum to people whose views it

finds acceptable, but deny use to those wishing to express less

favored or more controversial views.” City of Renton, 475

U.S. at 48-49. (Quoting Police Dept. of Chicago v. Mosley,

408 U.S. 92, 95-96 S. Ct. 2286, 2289-90, 33 L. Ed. 2d 212

(1972)). “A regulation the serves purposes unrelated to the

content of expression is deemed neutral, even if it has an

incidental effect on some speakers or messages but not

others.” Ward v. Rock against Racism, 491 U.S. 781, 791,

109 S. Ct. 2746, 2754, 105 L. Ed. 2d 661 (1989). Local

governments may restrict adult businesses in order to curb

their unwanted “secondary effects.” City of Ramsey v.

Holmberg, 548 N.W. 2d 302, 360 (Minn. Ct. App. 1996)

(citing City of Renton at 49, 106 S. Ct. at 929-30. If the

county’s ordinance serves a purpose unrelated to the

expressive content of the sexually-oriented businesses the

county wants to regulate, the ordinance is deemed neutral,

even though the ordinance may affect those businesses

incidentally. Holmberg v. City of Ramsey, 12 F. 3d at 143

(citing Ward, 491 U.S. at 791, 109 S. Ct. at 2453). The

county may draw distinctions between entertainment

establishments and adult entertainment establishments

“without violating the government’s paramount obligation of

neutrality in its regulation of protected communication.” See

City of Renton, 475 U.S. at 49, 106 S. Ct. at 930 (quoting

Young v. American Mini-theaters, Inc., 427 U.S. 50, 70, 96

S. Ct. 2440, 2452, 49 L. Ed. 2d 310 (1976). The Supreme

Court noted in American Mini-Theaters, that “[i]t is the [e]

secondary effect which these zoning ordinances attempt to

avoid, not the dissemination of ‘offensive’ speech.” Id

(quoting American Mini-Theaters at 71, n. 34, 96 S. Ct. at

2453, n. 34). In JLQ, the Eighth Circuit has stated:

...even if a time, place and manner ordinances

regulates only businesses selling sexually explicitly materials,

the ordinance is eos. 2 if its purpose is to lessen

undesirable secondary effects attributable to those businesses,

such as increased crime, lower property values, or

deteriorating residential neighborhoods.

ILO Investments, 25 F. 3d at 1416. See Holmberg,

12 F. 3d at 143; Doe v. City of Minneapolis, 898 F. 2d 612,

617 (8* Cir. 1990)

In the above-entitled matter, Benton County sought

to regulate adult use facilities without reference to the

content of the regulated speech (nude dance entertainment).

The ordinance seeks to limit the locations of sexually-oriented

adult use businesses from within 500 feet of protected areas.

Benton County Development Code 7.10.2 expressly state

that: “(A) Adult Uses shall be permitted in areas zoned B, B-

2, I-1 and I-2...” (Emphasis added). The ordinance by its

terms is designed to lessen the adverse secondary effects of

sexually -oriented businesses, i.e. adult uses. Such adverse

secondary effects which the commission found, based upon

review anc study of various reports were increased rates of

crime resulting from adult use businesses, negative impact on

surrounding neighborhoods; greater perpetration of crime on

children and other vulnerable persons; traffic, glare and noise

from adult use businesses; and the negative impact on the

value and marketability of adjacent properties. The ordinance

was not designed to suppress the expression of unpopular or

offensive communication or conduct.

Therefore, Benton County Ordinance 242 does not

involve an impermissible time, place and manner restriction

based on the content of expression. It is “content-neutral: in

its purpose to lessen unwanted negative secondary effects

attributable to adult uses businesses such as increased crime,

lessened quality of life for nearby residential neighborhoods

and possible lower property values and marketability in the

surrounding area. The ordinance survives attack on the first

test from City of Renton, as it is a content-neutral ordinance.

N.67

The second pat of the test in Renton is to determine

whether the regulation serves a substantial government

interest. Regulations reasonably designed to curb unwanted

secondary effects of sexually oriented businesses serve a

substantial governmental interest. JLO Investments, 25 F. 3d

at 140, 143 (8 Cir. 1993). In order for Benton County to

prove that its ordinance is narrowly tailored to the

government interest, it must prove that adult uses cause

negative secondary effects. See City of Crystal v. Fantasy

House, Inc., 569 NW. 2f 225, 229 (Minn. Ct. App. 1997). In

determining whether the secondary effects of adult businesses

justify regulation, a city is not required to conduct its own

study, but may rely on the studies and experiences of other

cities, “so long as whatever evidence the [county] relies upon

is reasonably believe to be relevant to the problem that the

[county] addresses.” City of Ramsey, 548 N.W. 2d at 306

(quoting City of Renton, 475 U.S. at 51-52, 106 S. Ct. at

931) (emphasis added).

The Plaintiff argues that Benton County relied upon

studies which “were drafted with preconceived notion{s] of

coming up with evidence to justify restrictions upon adult

entertainment,” that such secondary effects were unlikely to

occur in rural Benton County and that little too adverse

secondary effects have occurred in connection to the

plaintiff’ s business.

As the courts have addressed numerous times in JLO

Investments, Inc. v. City of Crystal, City of Ramsey and City

of Renton, “that is simply not the law.” JLO Investments,

Inc., 25 F. 3d at 1418. “{T]he requirement of narrow

tailoring is satisfied ‘so long as the ...regulation promotes a

substantial government interest that would be achieved less

effectively absent the regulation.” Id (citing Ward, 491 U.S.

at 799, 109 S. Ct. at 2758 (quoting United States v.

Albertini, 482 U.S. 675, 689, 105 S. Ct.2897, 2906, 86 L.

Ed. 2d 536 (1985))). A county only needs to prove that the

ordinance targets businesses, “reasonably believed to produce

A.GZ

NO & ,

at least some of the unwanted secondary effects...” City of

Crystal, 569 N.W. 2d at 230 (quoting JLQ Investments, Inc.,

25 F. 3d at 1418).

Under Renton, Benton County dses not need to prove

that the King’s Inn would have the same negative secondary

effects on its surroundings as other adult use businesses

studies in St. Paul, MN; the Office of the Minnesota Attorney

General; Indianapolis, IN; Rochester, MN; Los Angeles, CA;

Phoenix, AR; Adams County, CO; Amarillo, TX; and Austin,

TX. It is enough that Benton County Ordinance 242 affects

only categories of businesses reasonably believed to produce

at least some of the unwanted secondary effects. As stated in

City of Renton, “the city must be allowed a reasonable

opportunity to experiment with solutions to admittedly

serious problems.” City of Renton, 475 U.S. at 52, 106 S.

Ct. at 931 (quoting American Mini-Theaters, 427 U.S. at 71,

96 S. Ct. at 2453, 49 L. Ed. 2d 310) (plurality opinion).

Therefore, as stated in City of Crystal, the question becomes:

did Benton County reasonably believe that the studies relied

upon were relevant to restricting adult use facilities?

Benton County relied upon numerous studies which

viewed adult use and sexually-oriented businesses, both

within Minnesota and outside of it and in both rural and urban

settings. Those studies identified specific adverse secondary

effects attributable to adult use businesses and it is reasonable

for Benton County to have relied upon them in establishing

their ordinance. The studies examined reasonably similar

businesses which provided the commission and the Benton

County Board sufficient information to enact the ordinance.

This satisfies the second part of the Renton test. Any

businesses effected by the ordinance are those the county

reasonably believe cause adverse secondary effects.

The plaintiff argues that the studies were flawed and

has resented evidence and affidavits to show that the studies

liking adverse secondary effects to the King’s Inn specifically

are not credible.

—A.68

N64

The law is whether + County reasonable believe

the studies were relevant to the problems addressed by the

ordinance at the time it enacted the ordinance. The county

enacted the ordinance on the strength of thorough research,

documented studies, public hearings and considered

deliberations. As the new studies and evidence were not

before the commission or the Benton County Board at the

time of the enactment of the ordinance, they were not part of

the commissioners or the Board members deliberations.

When the county passed the ordinance, it had evidence before

it that adult use businesses like the plaintiff's produced

unwanted negative secondary effects in the surrounding

community. The plaintiffs argument fails to raise a genuine

issue of fact as to whether Benton County reasonably

believed that the businesses to which the ordinance applies

produce at least some of the negative secondary effect shown

in the studies which were considered. See City of Ramsey v.

Holmberg, 548 N.W. 2d 302, 306 (Minn. Ct. App. 1996).

The third part of the Renton test is to determine

whether Benton County ordinance, which restricts free

speech in order to control the negative secondary effects of

adult use businesses, provides reasonable alternative avenues

of communication for the exercise of that First Amendment

right.

In making this determination, the First Amendment

requires Benton County to refrain from effectively denying

the plaintiff a reasonable opportunity to operate or open an

adult use facility within the county. See City of Renton, 475

U.S. at 54, 106 S. Ct. at 932. The Supreme Court has stated

this does not means “that the First Amendment compels the

government to ensure that adult theaters, or any other kinds

of speech-related businesses for that matter, will be able to

ontsin sites at bargain prices.” American Mini-Theaters, Inc.,

427 US. at 71, n. 35, 96 S. Ct. at 2453, n. 35 (plurality

opinion).

In the above-entitled action, the Defendants assert

4\20

that there are over 2400 acres available for commercial and

industrial uses in Benton County. Of these, they claim that

there are dozens of commercial and industrial sites within the

county where a locating adult use business would not run

afoul of setbacks. The Plaintiff asserts that virtually all of the

industrial zones available for adult uses could be eliminated

since generic commercial uses are excluded from the entire

industrial zone. It also asserts that virtually all of the

available land is unplatted and rural in nature. This could

allow the Defendants to indefinitely delay acting to permit a

subdivision and grants the county unfettered discretion in

placing conditions upon the approval of subdivision

development.

In light of the parties’ assertions regarding land

availability, a genuine issue of material fact exists as to

whether reasonable alternative avenues of communication are

provided for adult use businesses. This precludes the court

from granting summary judgment to Defendant and requires

that an evidentiary hearing be held to make a determination

on the issue.

In summary, Benton County ordinance No. 242 is

content-neutral and is narrowly tailored to serve a substantial

governmental interest. A fact issue exists as to whether the

ordinance provides reasonable alternative avenues of

communication for adult use facilities.

i Amortization Period Reasonableness

As stated, Benton County ordinance provides a four

(4) years amortization period for nonconforming adult

uses to comply with the zoning ordinance. Benton

County Code 7.10.3 states:

Adult uses established prior to the enactment of

Benton County Ordinance No. 235 shall be permitted and

regulated as nonconforming uses until July 31, 1998, at which

time such uses shall become unlawful, unless they conform to

the requirements of Sec. 7.10.22.

Minn. Stat. Sec. 394.21 grants counties the authority

to carry on their planning and zoning activities. The statute

states: “Except most populous counties. For the purpose of

promoting the health, safety, morals and general welfare of

the community any county in the state having less than

300,000 population according to the 1950 federal census is

authorized to carry on county planning and zoning activities.”

Minn. Stat. Sec. 394.21, Subd. 1 998). Minn. Stat. Sec.

394.36 provides counties with the power to regulate

nonconforming uses. It states:

Nonconformities.

Subdivision 1. Continuous or it ends. Any nonconformity

including the lawful use or occupation of land or premises

existing at the time of the adoption of an official control

hereunder may be continued, except as regulated, terminated

or acquired by the board as provided in subdivision 2 or 3...

Subd. 2. Regulation. The board may by ordinance adopt

such regulations not contrary to law as it deems desirable or

necessary to classify, regulate and control, reduce the number

or extent of and provide for the gradual elimination of

Nonconformities and occupancies, including requiring

Nonconformities to conform with the official controls of the

county or terminate within a reasonable time as specified in

the official controls...(emphasis added).

Amortization periods have been upheld by both state

and deferral courts as long as they are reasonable. See

Naegele Outdoor Advertising Co. of Minn. v. Village of

Minnetonka, 281 Minn. 492, 162 N.W. 2d 206 (Minn. 1968);

Alexander v. City of Minneapolis, 928 F. 2d 278 (8* Cir.

1991); Holmberg v. City of Ramsey, 12 F. 3d 140 (8 Cir.

A. 7 lemme

1993). In Naegele, the Minnesota Supreme Court noted:

“In order to make this power to create

exclusively residential districts effective,

municipalities must have the power to prohibit

the construction of future nonconforming uses

and to require the removal of old ones. The

continued presence of preexisting

nonconforming commercial uses within these

residential districts may reasonably be found

to vitiate the effectiveness of the entire

comprehensive municipal plan... The

legislature, in giving municipalities broad land-

use-planning powers, could not have intended

to render them ineffective by denying the

municipalities the power to eliminate

preexisting nonconforming uses. Thus, even

though the enabling nonconforming uses, such

a power is necessarily implied from the broad

grant of power to establish and implement a

comprehensive municipal plan.

Naegele Outdoor Advertising, 281 Minn. at 504, 162

N.W. 2d at 215. -

In Minnesota, amortization periods of two (2) and

three (3) years have been upheld. See Naegele Outdoor

Advertising, 281 Minn. 492, 162 N.W. 2d 206 (Minn. 1968)

(three year amortization period reasonable) and AVR, Inc. v.

City of St. Louis Park, 585 N.W. 2d 411 (Minn. Ct. App.

1998) (two year amortization period reasonable).

In light of the foregoing, the four (4) year

amortization period enacted by the Benton County Planning

and Zoning Commission and Benton County Board is

reasonable and constitutional as authorized under Minnesota

state law.

The plaintiff has subsequently moved the county for

al gt ti icine

amend its complaint to assert a claim under the newly

adopted Minnesota law which prohibits amortization

ordinances from being adopted or enforced by counties or

municipalities within the state. Minn. Stat. Sec. 394.21 was

amended by adding a subdivision to read:

Subd. la. Amortization Prohibited. Except as

otherwise provided in this subdivision, a

county, regardless of population, under this

chapter or under a special or local law, must

not enact, amend, or enforce an ordinance

proving for the elimination or termination of a

use by amortization which use was lawful at

the time of its inception. This subdivision

does not apply to adults-only bookstores,

adults-only theaters, or similar adults-only

businesses, as defined by ordinance (emphasis

added).

Minn. Stat. Sec. 394.21, Subd. 1a (1999).

The statute was recently enacted and signed into law

on April 23, 1999 and provides clear and unambiguous

language which excepts adult use businesses from the

prohibited amortization. In light of the fact that the language

States that adult-only businesses are those defined by

ordinance and the Plaintiff has stipulated that the King’s Inn

is an adult use businesses under the definition of the

ordinance, the Plaintiff's business is an exception to the

recently amended statute. Therefore, the Plaintiff's motion to

amend its complaint to assert a claim under the amended

statute is denied.

Ill. Taking

The plaintiff concedes in its argument that under Myron

v. City of Plymouth, 562 N.W. 2d 21 (Minn.Ct. App.

A7Y

1997) (aff'd without opinion, 581 N,W. 2d 815 (Minn.

1998), one who purchases property subject to zoning

restrictions cannot argue that the pre-existing

regulations constitute a constitutional taking. It does

asset that under the Minnesota Constitution, private

property shall not be taken, destroyed or damaged for

public use without just compensation therefor, first paid

or secured (emphasis added). MINN CONST., Art I,

Sec. 13. The Plaintiff claims its property has been

damaged because its value as an adult use facility has

been diminished considerably by the zoning ordinance

and setback requirement. Plaintiff contends the building

is “useless” for any other purpose than nude dance

entertainment without large expenditures.

It would be inconsistent to interpret the takings clause

of the Minnesota Constitution to allow relief to one for damage

to property where they purchased said property with knowledge

that it is encumbered by zoning regulations and not to allow

compensation for the taking of that same property which is

equally so encumbered. In order to establish an unconstitutional

taking a landowner must demonstrate he has been deprived,

through governmental action or inaction, of all the reasonable

uses of its land. Heller v. Wolner, 269 N.W. 2d 31 (Minn.

1978); Czech v. City of Blaine, 253 N.W. 3d 272 (Min. 1977).

The simple assertion that Plaintiff's building is more

valuable as a nude dance establishment facility than any other

use has been determined to be without merit. “[I]t is too

fundamental for citation or authorities that rezoning, which is

otherwise valid, does not give rise to an action for damages

because the land in question may be more valuable for some

other purpose.” Holeway v. City of Pipestone, 269 N.W. 2d

28, 30 (Minn. 1978) (quoting Almquist v. Town of Marshan,

—— 308 Minn. 52, 69, 245 NPY. 2d 819, 828 (Minn. 1976).

Therefore, the Plaintiffs claim for an unconstitutional

taking or damaging of property is rejected by the court under

A?s -Ag2

the United States and the Minnesota Constitution. As stated in

Myron and applied to this case, “[plaintiff] knew [it] was taking

a “gamble” when [it] purchased the property. The price

presumably reflected the zoning restriction, and [plaintiff]

therefore, may not now claim that the [County] has taken

property rights from [it] without just compensation.” Myron v.

City of Plymouth, 562 N.W. 2d 21, 24 (Minn. Ct. App. 1997).

Order for Judgment

The Defendant’s motion for summary judgment on

Count II of the Plaintiff's complaint is DENIED. An

evidentiary hearing will be scheduled on the sole issue of

whether Benton County has provided for reasonable alternative

avenues of communication for adult use businesses. The

Defendant’s motion for summary judgment on Count III of the

Plaintiff's complaint is GRANTED. J

The Defendant’s motion for summary judgment on

Count IV of the Plaintiff's complaint is GRANTED.

The Plaintiff's motion to amend the original complaint

in light of recently enacted amendments to Minn. Stat. Sec.

394.21 and Minn. Stat. Sec. 462.357 is DENIED.

Dated this 7” day of July, 1999

/s/

James W. Hoolihan

District Judge

Let Judgment be Entered Accordingly,

I hereby certify that the foregoing constitutes the judgment of

this court.

Dated: 7/1/99 A 33

TIMOTHY R. ROBERTS.

Court Administrator.

/s/

Deputy Court Administrator

A,34

STATE OF MINNESOTA BENTON COUNTY

COUNTY OF BENTON BOARD OF ADJUSTMENT

In the matter of the Variance Request of:

KISMET INVESTORS, INC. File No. 9800403

WHEREAS, Kismet Investors, Inc, d/b/a King’s Inn,

applied for a variance from Sec. 7.10.3(A) of the Benton County

Development Code; and

WHEREAS, public hearings regarding said application

were held on August 20" and September 17, 1998; and

WHEREAS, upon consideration of all the evidence,

documents and testimony presented herein, the Board of

Adjustments makes the following:

FINDINGS

1. That the proposed use is an adult use, and is not

prohibited in the business district in which it is located. 7

2. That the requested variance would not be in harmony

with the general purposes and intent of the Benton County

A, 85

Development Code, which provides for the gradual elimination of

nonconforming uses and structures.

( 3. That the applicant has not demonstrated a hardship

within the meaning of the Benton County Development Code and

Minn. Stat. Sec. 394.27.

4. That the concerns expressed by the applicant are solely

economic in nature.

5. That the property in question could be put to the

reasonable use if used under the conditions allowed by the

Development Code. The property and existing building have, prior

to the applicant’s purchase, been used as a restaurant and resort,

and could be used in a similar manner again.

6. That the applicant has failed to demonstrate a plight that

is due to circumstances unique to the property.

7.. That the applicant purchased the property after the adult

use provisions of the Benton County Development Code were ;

enacted and, therefore, had constructive knowledge of those

provisions when the property was purchased.

A. 86

8. That the variance , if granted, would alter the family

neighborhood character of the locality.

Based upon the foregoing, the Board of Adjustments finds

that the applicant has failed to demonstrate that it qualifies for a

variance pursuant to M.S. Sec. 394.27 and Sec. 11.5.1 of the

Benton County Development Code, and the applicant’s variance

request is hereby DENIED.

/s/

Bruce Binnie, Chair

Subscribed and sworn

to before me this 15"

day of Oct., 1998.

/s/

Notary Public

aA.8Lo

ADULT USE ORDINANCE

Benton County, Minnesota

Ordinance #

WHEREAS, the Benton County Planning Commission is

concerned about the possible adverse secondary effects of sexually

oriented businesses on adjacent properties; and,

WHEREAS, the Benton County Planning Commission has

reviewed and studied the following reports relating to Sexually

Oxented Businesses, also referred to herein as Adults Uses:

Adult Entertainment , a 40-Acre Study, St. Paul, Mn,

Department of Planning and Economic Development (1987,

Supplemented 1988), EL —

Attorney General, State of Minnesota (1989); Adult Entertainment

Businesses in Indianapolis, Indiana (1984); Adult Entertainment

Perspectives, Rochester/Olmsted, MN, Consolidated Planning

Department (1988); Study of the Effects of the Concentration of

Adult Business Study, Planning Department, wade of Phoenix, AZ

Oriented Business in Austin, TX; (1986), all of which are hereafter

collectively referred to as “Reports” and,

WHEREAS, the Planning Commission finds, based upon

the Reports, that Sexually Oriented Businesses have an impact on

the neighborhoods surrounding them which is distinct from the

impact caused by other commercial uses; and

WHEREAS, the Benton County Planning Commission

finds, based upon the Reports completed by the cities of Phoenix,

Indianapolis, and Austin, that the rate of overall crime is greater in

areas near Sexually Oriented Businesses; and

WHEREAS, because of the increased potential for criminal

behavior in areas near sexually oriented business, the Planning

Commission seeks to separate such businesses from areas in which

children and other persons who are particularly vulnerable to crime

may be expected to frequent; and

WHEREAS, the Benton County Planning Commission,

after review of the report completed for the city of Amarillo, TX,

finds that sexually oriented businesses can result in traffic, glare

and noise, in excess of that created by other businesses by virtue of

their hours of operation; and

WHEREAS, the Benton County Planning Commission

wishes to minimize the negative impact of traffic, glare and noise

on adjacent properties; and

WHEREAS, the Planning Commission finds, based

upon

the Reports completed for the cities of St. Paul, Austin, Los

Angeles, and Indianapolis, that sexually oriented businesses have

potentially negative impact on the value and marketability of

properties adjacent to those businesses; and

WHEREAS, the Benton County Planning Commission

seeks to minimize any potential negative impact on the value of

land adjacent to sexually oriented businesses; and

WHEREAS, the Reports conclude the adverse impacts

which sexually oriented businesses have on surrounding areas

diminish as the distance from the sexually oriented businesses

increases; and

WHEREAS, the Benton County Planning Commission

intends to provide space for location of sexually oriented

businesses in appropriately zoned districts in the county; and

WHEREAS, on June 28, 1994, a notice of public heating

and intent to amend development code was published in the

newspaper and mailed to the governing bodies of all towns and

municipalities located within Benton County; and

WHEREAS, on July 14, 1994, the Planning Commission

held a public hearing thereon and recommended that the following

amendment be enacted; now

THEREFORE, BE IT RESOLVED that the Benton

County Planning Commission recommends that the following test

be added as Sec. 7.10 of the Benton County Development Code,

Ordinance No. 185:

7.10

ADULT USES

7.10.1 For the purposes of this section, the following definitions

shall apply:

Adult uses: Adult uses include adult bookstores, adult motion

picture theaters, adult mini-motion picture theaters, adult massage

parlors, adult steam room/bathhouse facilities, adult enterprises,

businesses or places open to some or all members of the public at

or in which there is an emphasis on the presentation, display,

depiction or description of “specified sexual activities” or

“specified anatomical areas” which are capable of being seen by

members of the public.

Adult bookstore: _a building or portion of a building used for

the barter, rental or sale of items consisting of printed matter,

pictures, slides, records, audiotape, videotape, or motion picture

film if a substantial or significant portion of such items are

distinguished or characterized by an emphasis on the depiction or

description of “specified sexual activities’ or “specified anatomical

areas” or the barter, rental or sale or instruments, devices, or

paraphernalia that are designed for use in connection with specified

\ sexual activities, “substantial or significant portion of items,” for

purposes of this ordinance, shall mean more than fifteen (15)

percent of usable floor area.

Adult cabaret: A building or portion of a building used for

providing dancing or other live entertainment, if such building or

portion of a building excludes minors by virtue of age, or if such

dancing or other live entertainment is distinguished or

characterized by an emphasis on the presentation, display,

depiction or description of “specified sexual activities” or

“specified anatomical areas.”

Adult conversation/rap parlor: A conversation/rap parlor which

excludes minors by reason of age, or which provides the service of

_ engaging in or listening to conversation, talk, or discussion, if such

service is distinguished or characterized by an emphasis on

“specified sexual activities” or “specified anatomical areas.”

Adult health/sports club: A health/sports club which excludes

minors by reason of age, or if such club is distinguished or

characterized by an emphasis on “specified sexual activities’ or

“specified anatomical areas”

Adult massage parlor: A massage parlor which restricts minors

by reason of age, or which provides the service of “massage” if

such service if distinguished or chara

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