(A)   Purpose, findings and conclusions.
      (1)   Purpose. The purpose of this section is to provide the opportunity for operation and establishment of sexually-oriented establishments while providing controls that limit negative impacts of sexually-oriented establishments on residential and commercial areas, and protect the general health, safety and welfare of the citizens of the city.
      (2)   Findings of the City Council. The City Council makes the following findings regarding the effect that sexually-oriented establishments have on the character of the city’s neighborhoods. In making these findings, the City Council accepts the recommendations of a staff committee that has studied the experiences of other cities across the country where sexually-oriented establishments have located.
         (a)   The nature of sexually-oriented establishments is such that they are recognized as having adverse secondary characteristics, particularly when they are accessible to minors and located near residential property or related residential uses such as schools, day care centers, libraries or parks.
         (b)   The concentration of sexually-oriented establishments has an adverse effect upon the use and enjoyment of adjacent areas.
         (c)   The nature of sexually-oriented establishments requires that they not be allowed within certain zoning districts and that they are subject to special licensing provisions.
         (d)   Special regulation of sexually-oriented establishments is necessary to ensure that their adverse secondary effects will not contribute to or enhance criminal activity in the area of those uses, nor will they contribute to the blighting or downgrading of the surrounding property and lessening of its value.
      (3)   Conclusions of the City Council. In order to minimize any harmful effects that sexually- oriented establishments may cause on adjacent properties and to protect the health, safety and welfare of its citizens, the City Council adopts the following regulations and restrictions, recognizing that it has a great interest in the present and future character of the city’s residential and commercial neighborhoods. Adoption of these regulations is not intended to unreasonably restrict the opportunity of sexually-oriented establishments to locate in the city.
      (4)   Consistency with Minn. Stat. § 617.242, as it may be amended from time to time. This section is to be read in conjunction with Minn. Stat. § 617.242, as it may be amended from time to time, which regulates adult entertainment establishments. To the extent that Minn. Stat. § 617.242, as it may be amended from time to time, applies to portions or facets of the business that are not regulated by this section, the statute shall apply. To the extent that the provisions or regulations of the statute and this section are inconsistent, the more restrictive provision or regulation shall apply.
   (B)   Licenses. All establishments, operating or intending to operate a sexually-oriented establishment, as defined in § 153.457, must apply for and obtain a license pursuant to Chapter 110. The license application must be submitted to the City Council at least 60 days before the licensee desires to begin operation of the business.
      (1)   Applications. In addition to the application requirements of § 110.03, the application must contain the following:
         (a)   A sketch or diagram showing the configuration of the premises, including a statement of total floor space occupied by the business. The sketch or diagram must be professionally prepared and be drawn to a designated scale with marked dimensions of the interior of the premises;
         (b)   The address and legal description of the property to be used;
         (c)   The names, addresses, phone numbers and dates of birth of the owner, lessee, if any, as well as the operator or manager;
         (d)   The names and addresses of all creditors of the applicant, owner, lessee or manager regarding credit that has been extended for the purposes of constructing, equipping, maintaining, operating, furnishing or acquiring the premises, personal effects, equipment or anything incident to the establishment, maintenance and operation of the business; or
         (e)   Complete and accurate documentation establishing the interest of the applicant and any other person who has an interest in the premises upon which the building is proposed to be located or the furnishings of it, personal property or the operation or maintenance of it. Documentation must be in the form of a lease, deed, contract for deed, mortgage deed, mortgage credit arrangement, loan agreements, security agreements or any other documents establishing the interest of the applicant or any other person in the operation, acquisition or maintenance of the business.
      (2)   Investigations. An investigation is required pursuant to § 110.03(C)(5).
      (3)   Management. If there is a manager in charge of the sexually-oriented establishment or if the named manager in charge of a licensed business changes, the licensee must comply with § 110.09.
      (4)   Requalification. An applicant who has been convicted of an offense enumerated in division (D)(2)(g) below may qualify for a sexually-oriented establishment license only when the time period required by division (D)(2)(g) below.
   (C)   Inspections. An inspection is required pursuant to § 110.11 prior to approval of the license.
   (D)   Denial, suspension and revocation of license.
      (1)   In addition to the grounds enumerated in § 110.12, the City Council may deny, suspend or revoke a license if a licensee or an employee of the licensee has:
         (a)   Engaged in the use or sale of alcoholic beverages or controlled substances while on the sexually-oriented establishment premises other than at an adult hotel or motel;
         (b)   Permitted gambling by any person on the sexually-oriented establishment premises;
         (c)   Demonstrated an inability to operate or manage a sexually-oriented establishment in a peaceful and law abiding manner, thus necessitating action by law enforcement officers;
         (d)   Allowed prostitution on the premises; or
         (e)   Allowed any act of sexual intercourse, sodomy, oral copulation or masturbation to occur in or on the licensed premises. This division (D)(1) shall not apply if the act occurred in an adult hotel or motel, unless the act occurred in a public place or within public view.
      (2)   In addition to the grounds enumerated in § 110.12, the City Council shall deny an application if the applicant:
         (a)   Is overdue in a payment to the city, county or state for taxes, fees, fines or penalties assessed against the applicant or imposed upon the applicant in relation to a sexually-oriented establishment, or if the state prohibits the issuance of such a license because of assessed taxes, fees, fines or penalties;
         (b)   Has been convicted of a violation of a provision of this section;
         (c)   Holds a liquor license under §§ 112.01 through 112.06;
         (d)   In the judgment of the city is not the real party in interest or beneficial owner of the business operated under the license;
         (e)   In the case of an individual, is not a resident of the metropolitan area; in the case of a partnership, the managing partner is not a resident of the metropolitan area; or in the case of a corporation, the manager is not a resident of the metropolitan area. The required residency must be established at the time the license is issued and maintained throughout the existence of the license and all renewals of the license. The time for establishing residency within the metropolitan area may, for good cause, be extended by the licensing authority. For the purposes of this section, the METROPOLITAN AREA means the seven county metropolitan area as defined by Minn. Stat. § 473.121(2), as it may be amended from time to time.
         (f)   The premises to be used for the sexually-oriented establishment have not been approved by the health official, Fire Department, Zoning Administrator and the Building Official as being in compliance with applicable laws and ordinances; or
         (g)   An applicant has been convicted of a crime involving or arising from any of the following offenses within the past five years:
            1.   Any sex crimes as defined by Minn. Stat. §§ 609.293 through 609.352, as they may be amended from time to time, inclusive or as defined by any ordinance or statute in conformity therewith;
            2.   Any crime in Minn. Stat. §§ 609.746 through 609.749, 609.79, 609.795, 518.01, 609.224, 609.2242, as they may be amended from time to time or related statutes dealing with sexual assault, sexual conduct, harassment, obscenity or domestic abuse or as defined by any ordinance or statute in conformity therewith; or
            3.   Any obscenity crime as defined by Minn. Stat. §§ 617.23 through 617.299, as they may be amended from time to time inclusive, or as defined by any ordinance or statute in conformity therewith.
      (3)   The fact that a conviction is being appealed has no effect on the disqualification of the applicant.
   (E)   Places ineligible.
      (1)   No license may be issued for any of the following locations: a place of business that is currently licensed as a tattoo establishment, pawnshop, massage therapy business, reflexology business, check cashing or currency exchange business or any establishment that sells alcoholic beverages.
      (2)   No sexually-oriented establishment may exceed 2,500 square feet in gross floor area.
   (F)   Restrictions and regulations. A sexually-oriented establishment is subject to the restrictions and regulations in this section.
      (1)   No owner, manager or employee may allow sexually-oriented materials, as defined in §§ 153.455 through 153.459, or entertainment to be visible or perceivable in any manner, including aurally, at any time from outside the business.
      (2)   Age restrictions:
         (a)   No owner, manager or employee may allow a person under the age of 18 to enter the business. The licensee shall require proof of age from all persons entering the premises. Proof of age may be established only by: a valid driver’s license or identification card issued by the state, another state or a province of Canada; a valid military identification card issued by the United States Department of Defense; or by a valid passport, all of which shall include a photograph and the date of birth of the person to be identified;
         (b)   No owner, manager or employee may allow a person under the age of 18 to have access to sexually-oriented materials, whether by sight, purchase, touch or another means; and
         (c)   No owner or manager may employ a person under the age of 18 on the licensed premises.
      (3)   No owner, manager or employee may allow a patron, employee or other person on the premises to physically contact, in public view, a specified anatomical area, as defined in §§ 153.455 through 153.459, of himself or herself, or of another person, except that a live performer may touch himself or herself.
      (4)   A live performer must remain at all times a minimum distance of ten feet from the members of the audience, and must perform on a platform intended for that purpose, which must be raised at least two feet from the level of the floor on which the audience is located. No performer may solicit or accept money, a tip or other item from a member of the audience. No member of the audience may give to or cause to be given to any performer money, a tip or any other item.
      (5)   No sexually-oriented establishment may have booths, stalls, partitioned portions of a room or individual rooms, except as follows:
         (a)   Restroom stalls and restrooms are allowed, so long as neither the restroom stalls or the restroom itself are no larger than reasonably necessary to serve their respective purposes, no other activities are provided or allowed in the restroom stalls or restrooms, and there are no chairs, benches or reclining surfaces in the restroom stalls or restrooms; and
         (b)   Storage rooms and private offices are allowed, provided, however, that the storage rooms and offices are used solely for operating the business and no persons, other than the owner, manager and employee, are allowed in them.
      (6)   A licensee shall not allow any partition between a subdivision, portion or part of the licensed premises having any aperture which is designed or constructed to facilitate sexual intercourse, sodomy or fondling or other erotic touching of human genitals, pubic region or pubic hair, buttocks or female breast between persons on either side of the partition.
      (7)   Hours restrictions:
         (a)   A licensed sexually-oriented establishment shall not be open for business to the public:
            1.   Before 10:00 a.m. or after 10:00 p.m. on the days of Monday through Saturday; or
            2.   On a Sunday or legal holiday.
         (b)   In no event shall any person other than the licensee’s bonafide employees be in the licensed premises:
            1.   More than 75 minutes before 10:00 a.m. or after 10:00 p.m. on the days of Monday through Saturday; or
            2.   On a Sunday or legal holiday.
      (8)   All license holders shall be required to install or possess digital video security at the licensed location. The Police Department shall confirm that the device has been installed prior to approval of the license.
   (G)   Exceptions. This section does not regulate the following:
      (1)   Material with significant literary content or social commentary;
      (2)   A business where sexually-oriented materials are sold, bartered, distributed, leased, furnished or otherwise provided for off site use or entertainment, if the sexually-oriented material on each item is blocked from view by an opaque cover as required by Minn. Stat. § 617.293, as it may be amended from time to time, and each item is in an area accessible only by an employee of the business;
      (3)   A person or organization exempted under Minn. Stat. § 617.295, as it may be amended from time to time (i.e., schools, churches, medical clinics, government agencies);
      (4)   Activity under Minn. Stat. § 617.202, as it may be amended from time to time (sale of articles related to disease);
      (5)   Displaying of works of art showing specified anatomical areas, as defined in §§ 153.455 through 153.459, so long as no sexually-oriented materials are for sale and the business does not have a liquor license; or
      (6)   Movies rated G, PG, PG 13, NC 17 or R.