Section 27-611 of the Unified Zoning Regulations regulates where Sexually Oriented Businesses (SOBs) may locate within the City of Billings. The existing regulations are intended to diminish the negative secondary effects of SOBs throughout the city. In June 2008, a deficiency in the existing regulations allowed an SOB without a liquor license to locate in the Central Business District zone at 222 North Broadway. This location is within 1,000 feet of a school, a park, three churches and the Parmly Billings Public Library. In June, 2008, Section 27-611 did not regulate commercial establishments that offer or provide live adult nude or semi-nude performances on a regular basis. The City does prohibit this activity only where alcoholic beverages are served (Section 3-304 BMCC). The City Zoning Commission conducted a public hearing on this amendment on October 6, 2009, and is forwarding a recommendation of approval on a 3-0 vote.

The City Zoning Commission held a public hearing on the proposed text amendment on October 6, 2009. No members of the public spoke at the Zoning Commission Public Hearing. The City Zoning Commission is forwarding a recommendation of approval.  The Council may:

• Approve the ordinance changes as recommended by the Zoning Commission;
• Postpone action on the ordinance amendments to seek additional information prior to the Dec. 23, 2009, deadline; or
• Not approve the ordinance changes, which would make the City vulnerable to the opening of simillar clubs in the future.

There should be no direct financial impact to the City as a result of the new zoning regulation.

On June 23, 2008, the City Council adopted an interim ordinance to eliminate this deficiency until a permanent ordinance could be drafted and submitted to the Zoning Commission and City Council for review and public hearings. Montana state law allows cities to adopt interim zoning as a matter of urgency without the review of the City Zoning Commission or the publication of several legal ads in advance of the City Council public hearing. Interim zoning regulations may only be in effect for six (6) months from the date of enactment unless extended by the City Council.

The City Zoning Commission conducted a public hearing on Zone Change #850, on October 7, 2008, and recommended approval of the adoption of amendments to the regulations. Subsequently, the City Council held a hearing on October 27, 2008, on the first reading of the ordinance. Testimony provided at the first reading indicated that two existing adult book stores would be negatively affected by the proposed changes. On November 10, 2008, the City Council voted to indefinitely postpone the 2nd reading of the ordinance and remanded the ordinance for further revisions to the Planning Division. On December 8, 2008, the City Council extended the interim zoning ordinance for 1 year and this interim ordinance will expire on December 23, 2009.

Cities throughout the state and nationally are allowed to regulate SOBs within their jurisdictions so long as the regulation does not infringe on the rights of individuals guaranteed by state law or by the U.S. Constitution. There are numerous and lengthy court decisions surrounding the local regulation of SOBs and, in particular, live entertainment that features nude or semi-nude dancing. The courts have consistently held that any local ordinance regulating live nude entertainment must not unduly impair the exercise of First Amendment rights. A city may, through zoning, provide for adequate separation from areas that are incompatible with SOBs, such as residential neighborhoods, parks, libraries, churches and schools. A city may not prohibit SOBs from locating within its jurisdiction either through excessive separation distances or through outright prohibition in the code.

Section 27-611 was drafted and adopted in April 1992, and minor amendments have occurred since that time. The original regulations allowed SOBs in 4 zoning districts including Central Business District (CBD), Highway Commercial (HC), Controlled Industrial (CI) and Heavy Industrial (HI) so long as those locations could meet minimum separation distances to incompatible uses. The revised ordinance retains these 4 zoning districts as districts where SOBs may be allowed. If an incompatible use has located within a required separation distance from an existing SOB this does not require the business to move from its location. For example, if a daycare center opened adjacent to Broadway Books on Midland Road, the regulations do not require Broadway Books to move from that location. Similarly, the skate park across the street from the Ball Book Store on S. 26th Street does not require the book store to move out of that location since the skate park was developed after Ball Book Store was established.

Other revisions in the ordinance include clarification of uses requiring separation to include trails, cemeteries, any Planned Development zone not separated from an SOB location by an interstate highway, Agriculture Open-Space zones, and any Community Residential Facility (group home). The ordinance adds Adult Cabarets where live nude or semi-nude entertainment is offered on a regular basis as a regulated SOB and defines those terms. Existing locations in the city may remain and the proposed ordinance should have no material affect on those businesses. Any new SOB must comply with the new ordinance. The new amortization period that was included in the 2008 draft ordinance has been removed from the 2009 draft because the proposed ordinance does not create any nonconforming SOB locations. The Planning Division worked with the City Attorney to ensure the revised ordinance addressed the issues of most concern to the City Council and allowed existing businesses to retain their locations. The City Attorney has reviewed the proposed ordinance for conformance with existing state law and court decisions.

The Zoning Commission conducted a public hearing on October 6, 2009. Greg Krueger, Development Director of the Downtown Business Partnership, spoke in favor of the proposed zone change. He stated that in 2008 a business took advantage of a loophole in the code and opened an Adult Cabaret in the downtown area. Mr. Krueger is in favor of closing this loophole so the downtown area and other commercial areas around Billings do not have to deal with this issue again. No members of the public spoke at the Zoning Commission hearing. On September 18, 2009, the Planning Division staff notified by mail interested parties including all current adult businesses within the city limits. No written testimony was received by the Planning Division.