The owners of Allusions Inc., a business Salt Lake officials term a "sex-talk" studio, have agreed not to open a business within city limits.

The business filed a U.S. District Court lawsuit against the city in February, after three business license applications were denied. "Three strikes and you're out," said Assistant City Attorney Bruce Baird.Stephen Cook, attorney for Allusions Inc., said the business is a "communications salon," and that sex talk and self-gratification

are protected by the U.S. Constitution's guarantees of freedom of speech and expression.

He said the lawsuit has been dropped, but he considers the city's new sexually oriented business ordinance "blatantly illegal." He plans a future court challenge of the entire ordinance.

Cook, who calls himself a civil rights attorney specializing in representing adult businesses, said an artist painting a nude model would be in violation of the city's ordinance. "The Mona Lisa was a professional model. If the current City Council would have been in charge of Venice during the Renaissance, we would have lost several priceless treasures of art."

Baird said Allusions officials agreed to drop the lawsuit and promised not to do business in the city, while the city agreed to pay a $500 settlement for nuisance value.

"We don't admit guilt. We're just paying them to go away.

"The city doesn't not want them to operate. The city wants all businesses to operate to comply with our laws. And this business wasn't prepared to do so."

Baird said the business applied in September to operate at a location that wasn't within the zone set aside for adult businesses. Since then the city has adopted a new, more restricted sexually oriented business zoning and licensing ordinance. It was officially adopted April 5.

Cook said building owners within the city's zone who had space to rent wouldn't agree to do business with Allusions.

Cook said the zone set aside by the city for adult businesses is limited to unwanted properties. "They offer you railroad tracks, blank fields, industrial areas and ghettos. Customers will not go to those areas because they are afraid they are going to get mugged," Cook said.

In addition, the ordinance forbids people who take payment for dates or socializing to touch. Although it was intended to regulate escort services, Cook said it could also apply to baby sitters and paid companions for the elderly.

"A hospital that sends out home nurses could be considered an adult business under the ordinance," Cook said.

But Baird said all the sections in the city's ordinance have been upheld in separate cases by the U.S. Supreme Court, and he is confident the ordinance will be upheld as constitutional in its entirety.