2005/06/15 Council Agenda Packet

App. B / Adult Businesses police officers testified that they believed the sexually ori- ented businesses caused neighborhood problems, particu- larly the increase in prostitution and other crime rates. Property values were suffering, since the presence of high crime rates made the area lees desirable to people who would have the ability and inclination to improve their homes. The Working Group made some inquiry to determine to what extent smaller cities outside the'Mn Cities Metropoli- tan area suffered adverse impacts of sexually oriented busi- nesses. The Working Group was informed by the chiefs of police of Northfield and Owatonna that neither city had adult bookstores or similar sexually oriented businesses. Police chiefs in Rochester and Winona stated that sexually oriented businesses in their communities operate in nonresi- dential areae. In addition, there is no "concentration" prob- lem. In Rochester, there are two facilities in a shopping mall and a single bookstore in a depressed commercial business neighborhood. The Winona store is located in a downtown business area. The police chiefs stated that they had no evidence of increased crime rates in the area adjacent to these facilities. They had no information as to the effect which these businesses might have on local property values. Information presented to the Working Group indicates that community impacts of sexually oriented businesses are primarily a function of two variables, proximity to residen- tial areae and concentration. Property values are directly affected within a small radius of the location of a sexually oriented business. Concentration may compound depression of property values and may lead to an increase in crime sufficient to change the quality of life and perceived desir- ability of property in a neighborhood. The evidence suggests that the impacts of sexually ori- ented businesses are exacerbated when they are located near each other. Police officers testified to the Working Group that `rice breeds vice." When sexually oriented businesses have multiple uses (i.e., theater, bookstore, nude dancing, peep 390 Minnesota Attorney General's Report / App. BC booths), one building can have the impact of several separate c businesses. The Working Group heard testimony that con centration of sexually oriented businesses creates a "war zone" which serves as a magnet for people from other areas o who "know" where to find prostitutes and sexual entertain- C4 went. The presence of bare in the immediate vicinity of sexually oriented businesses also compounds impacts upon the neighborhood. The Attorney General's Working Group believes that regu- latory strategies designed to reduce the concentration of sexually oriented businesses, insulate residential areas from them, and reduce the likelihood of associated criminal activ- ity would constitute a rational response to evidence of the impacts which these businesses have upon local communi- ties. Sexually Oriented Businesses and Organized Crime Infiltration of organized crime into sexually oriented busi- nesses reinforces the need for prosecution of obscenity and requires specific regulatory or law enforcement tools. The Working Group attempted to assess both the present and potential relationship between organized crime and sexually oriented businesses. The Working Group heard testimony from a witness who had been prosecuting obscenity cases for the past thirteen years that many sexually oriented businesses have out-of- town absentee owners. If the manager of a local business is prosecuted on an obscenity charge, his testimony may make it possible to pierce the corporate veil and identify the true owners. The Working Group heard testimony that an organized crime entity may operate somewhat like a franchisor. In order to stay in business, the local manager of a sexually oriented business may have to pay fees to organized crime. The makers and wholesalers of pornographic m^f-rials are