But even within the Warehouse District come restrictions. A former Christian nightclub-turned-church, 3 Degrees, is located just around the block at 113 N. Fifth St., and the owners don't want be neighbors.

The ministry objected to Hafiz's project, citing a city ordinance that precludes adult businesses from opening within 500 feet of religious institutions.

Hafiz fought back, arguing that 3 Degrees isn't really a church as defined by zoning codes. After all, back in 2003, the ministry had been granted a permit for extended hours because they were operating as a non-alcoholic nightclub, and in 2006 failed to prevent another strip club from opening within 500 feet of its location.

Earlier this month the city's Zoning Board of Adjustments sided with Hafiz, but 3 Degrees quickly appealed that decision, arguing that it had abandoned its for-profit nightclub model in 2008, and now hosts all the worship services and prayer circles that traditional churches offer.

The question is whether a congregation that rents space in a commercial building is in fact a church with veto power. On Thursday, the city's Zoning and Planning Committee heard arguments on both sides.

Nancy Aleksuk, a 3 Degrees pastor, said she and her husband chose the Warehouse District because they wanted to "take the gospel to places in our city that are typically underserved where church uses are concerned."

At the same time, her congregation didn't want to actually look at all the strip clubs and sex stores.

"It is uncomfortable for women to be confronted by that use," Aleksuk said. "A lot of cities have traditions of enforcing or having those spacing requirements, and we believe parents with young children that park along First Avenue and park along Second Avenue should be able to get to church without being confronted with sexually oriented use."

Former city council member Gary Schiff, lobbying on behalf of Hafiz, challenged that line of logic, pointing out that 3 Degrees deliberately chose to plant itself in a neighborhood dedicated to adult businesses.

"Constitutional protections cannot be summarily changed with a lease from somebody who is frankly gaming the system, moving into the only district where adult uses are allowed, and then seeking to repeal and repel those uses from their radius," Schiff said.

"The phrase of a clear path of women coming to the church ... there is no clear path. Anybody getting off that light rail, even blinders wouldn't help to avoid the fact that you're now in an adult oriented district."

Schiff argued that the zoning code should apply only to explicitly religious buildings -- not multi-tenant buildings where a group of religious people has rented a portion of the space. Such congregations could set up shop anywhere in the Warehouse District, and virtually eliminate any opportunity to open new adult businesses.

Ultimately the zoning committee unanimously approved 3 Degrees' appeal to be recognized as a church, since there are many examples of congregations that rent storefronts across Minneapolis, including the Minnesota Buddhist Center in Loring Park and Corner Church in the North Loop. Yet council members also acknowledged the difficulty of balancing the free speech rights of strip club owners and workers against the moral distaste of churches.

"It might bring to question whether or not we should have a spacing requirement for religious places of assembly from sex uses given the amount of space that sex uses are already allowed," said council member Lisa Goodman. "The amount is being constantly restricted, so to have a spacing requirement could prove to be problematic. That is probably a question for another day."