MURRIETA -- For the last two weeks, city officials have been walking a fine line: trying to determine where a business owner's constitutional rights end and a city's right to regulate businesses within its borders begins.

The business driving the debate is Dream Box, which opened March 1 at the corner of Madison Avenue and Pear Street in a generally industrial area of town. The store, which is two doors down from a children's party place, sells sex toys, adult videos, lingerie, spiked-heeled shoes and elaborate water pipes, also known as hookahs and bongs.

It's the first such store in Murrieta, a city that has about 10 times as many churches as bars and prides itself on its conservative family values.

City Councilman Rick Gibbs said he thinks Dream Box will have a hard time succeeding in Murrieta.

"Obviously (the owner) is a businessman and no matter what business you are in, you open where you think there is a need," Gibbs said. "However, I would venture the community's spirit seems to be one where an adult business would have a hard time succeeding."

Two days after Dream Box opened, the city issued an order to close it -- but two weeks later, the store remains open and officials have acknowledged that they didn't have the power to close it without a court order.

The city's ordinance states that an "adult business" is defined as a store that has "a significant or substantial portion" of adult-themed items. Dream Box owner Sam Kim contends his store does not fit that definition because less than 15 percent of the floor space is used for adult items.

The bulk of the items in the store include clothing, shoes and water pipes, which are legal because they can also be used to smoke tobacco, Kim said.

For the last two weeks, Kim and city officials have been debating exactly what constitutes an adult business in Murrieta, officials said. It's the city's contention that Dream Box does not belong there -- under any circumstances, because of its proximity to children's activities, Murrieta City Attorney John Harper said.

Regulating adult businesses

Cities cannot ban adult businesses outright. Adult uses are protected by the First Amendment and federal and state courts have upheld the right of such businesses to operate.

"The U.S. Supreme Court has upheld that they are a protected form of speech," said Irvine attorney Marco Martinez, a member of League of California Cities Task Force on Adult Businesses.

However, cities can impose regulations to address the business' secondary effects, such as crime, Martinez said. Those regulations can impose restrictions on when the business is open, where it is located and how it operates, he said.

Kim said he opened his store in Murrieta rather than Temecula because Temecula has a more restrictive adult business ordinance.

Temecula's ordinance restricts where an adult business can open and includes many other regulations, including how signs and merchandise can be displayed, specific rules for lighting, a requirement for separate bathrooms for men and women, special landscaping standards and required security cameras.

Temecula Mayor Ron Roberts thinks the regulations have been effective.

"I think it's restrictive -- and they check before they try to come in," he said. "When they find out what the ordinance is, they probably go elsewhere."

The closest thing to an adult store in Temecula is Spencer's Gifts in The Promenade mall, which carries some adult items among other types of merchandise. City officials have not been shy about fining the store for items that are displayed where minors can see them.

Harper said Murrieta's ordinance restricts where adult businesses can be located, and Dream Box is in the proper zone for an adult business -- but it is too close to a children's play area. The ordinance says an adult business must be 1,000 feet from churches, schools, homes, parks and other places frequented by children.

The problem in this case is Kim's contention that his business is not an adult business, and therefore, does not have to move, he said.

Concerned that Murrieta's law may need to be reviewed, Gibbs asked the council to consider a 45-day moratorium on the opening of adult businesses at its next meeting. The council meets at 7 p.m. Tuesday at City Hall, 26442 Beckman Court.

The council is also scheduled to discuss in closed session the city's strategy for negotiating with Kim. Harper said the discussion is closed because of the potential for litigation.

He acknowledged that because it is now an existing business, Dream Box would not be affected by any changes the city might make to its code. If Kim refuses to close the business on his own, the city would have to ask a court to rule on whether the city ordinance applies.

Related crime

But it's not just the "adult" side of Dream Box that has city officials concerned. They are also wary of the water pipes -- often used to smoke marijuana and hashish -- and the people who would buy them.

"Obviously, if they are selling water pipes, they are marketing to that type of clientele that is into illicit drugs," Murrieta police Sgt. Dennis Vrooman said. Vrooman heads up the Special Enforcement Team, which follows up on drug complaints and investigations. "Who else would buy those pipes except for drug users?"

Councilman Doug McAllister said the presence of water pipes for sale at Dream Box just underscores the city's concerns about the business.

"The bottom line is, you know what those are used for," McAllister said.

Meanwhile, there are children nearby who should not be exposed to the merchandise the store is selling, he said.

However, police say that because the pipes can also be used to smoke tobacco, they are technically not drug paraphernalia and the city cannot regulate their sale.

Because Dream Box is the first adult-oriented business in Murrieta, Vrooman said, the city isn't sure what impact it might have on crime. Other cities in the area have had similar adult stores for years, however.

Escondido, a city of 141,000 about 32 miles south, has an adult novelty business, F Street Bookstore. F Street sells adult merchandise similar to that in Dream Box -- but no water pipes -- and has been open for about 20 years.

Police in Escondido said the store does not appear to have a significant effect on crime.

"We do walk-throughs of the businesses -- we do that to a lot of businesses -- but F Street doesn't seem to have an impact on the crime rate," Escondido police Lt. Dave Mankin said.

Encinitas wins fight

Murrieta officials say Kim misrepresented Dream Box's business license application, an argument that proved successful for another San Diego County city in court when it sought to close an adult business. Dream Box's application states the store will sell men's and women's clothing and gift items, and makes no mention of adult items or pipes.

The discrepancy "appears to be a fraudulent attempt to avoid city scrutiny" of the store's true business, Deputy City Manager Chris Paxton wrote in the March 3 letter demanding the business be closed.

A San Diego County Superior Court Judge upheld that same argument when she closed an F Street store in Encinitas in June. Judge Lisa Guy-Schall permanently barred F Street from selling sexually oriented merchandise at the Encinitas store because the company misrepresented its merchandise on the business license application it filed with the city.

She also found that F Street opened in an area of Encinitas where adult businesses are prohibited -- 24 feet from the nearest home and 575 feet from a preschool.

But F Street's attorney, Andrzej Zmurkiewicz challenged Guy-Schall's ruling in September to the 4th District Court of Appeal. The appeal is still pending.

Contact staff writer Laura Mitchell at (951) 676-4315, Ext. 2621, or lmitchell@californian.com.