COVINGTON — A proposed zone change to allow strip clubs and adult bookstores in a south Covington enterprise zone would kill the multimillion-dollar expansion plans of a second-generation family business that Covington recruited from Cincinnati.

        The city of Covington wants to rezone 66 acres along the north and south sides of Mary Laidley Drive to urban industrial technology, a new zone that would allow sexually oriented businesses among its permitted uses.

        Nearly half the proposed zone is owned by H&S Chemical Co., a former St. Bernard family business that was recruited by Covington officials six years ago with the help of financial incentives.

        “We were recruited to come here,” said Chuck Schneider, director of sales for H&S Chemical Co., whose products include sanitizers and disinfectants for institutions, odor control products and an antiseptic for hospital whirlpool baths for burn victims. “Now they're changing the rules on us. I just can't believe the city of Covington would do that.”

        During the past two years, H&S Chemical Co. has purchased 20 acres for its planned expansion, which calls for an initial investment of $2.5 million to $3 million.

        It would create up to a dozen high-tech jobs such as chemists and biologists and another dozen skilled labor jobs, Mr. Schneider said. If the initial expansion is successful, the company ultimately could be looking at a total investment of $10 million, he said.

        “We're looking at adding a 25,000-square-foot building with labs, offices, warehouse and manufacturing space,” said Dave Schneider, vice president of H&S Chemical Co. “If this area is rezoned, I can guarantee you that we will not build that building. We will not expand.”

        Last week, the Schneiders collected the signatures of representatives of 18 businesses from Interstate 275 to Mary Laidley Drive who say the zone change would be detrimental to them.

        Many of the businesses, which employ a total of 770 workers, argue the zone change would increase crime, decrease property values and drive away the small manufacturing businesses that Kentucky's enterprise zones were created to serve.

        In an Aug. 15 letter to Covington Mayor Butch Callery and the four city commissioners, Charles Schneider Sr., president of H&S Chemical Co., said that allowing sexually oriented businesses would be a breach of his company's contract with the Kentucky Enterprise Zone.

        Sons Chuck and Dave Schneider said they were upset that they had not yet heard from Covington officials.

        Covington City Solicitor Jay Fossett said the city will respond to the Schneiders' letter, which it received Tuesday. However, he said that he has advised Covington officials not to comment on the issue until Kenton County planners have heard it.

        “I don't think it's appropriate for us to comment on (the rezoning issue) until it's actually gone through the planning commission process,” Mr. Fossett said.

        At its regular monthly meeting on Sept. 5, the Kenton County & Municipal Planning and Zoning Commission will make a recommendation on the zone change to Covington City Commission, which ultimately has the final say.

        After business owners complained that the proposed zone was across the road from a public facility (Pioneer Park) in violation of county zoning regulations, the city eliminated four parcels closest to Ky. 17, including two lots occupied by Crone's Auto Body, the highway maintenance facility and a vacant lot fronting Ky. 17.

        And in another change, if the area is rezoned, the uses that are already there would continue to be permitted.

        For more than a year, Covington officials have wrestled with where to locate sex businesses.

        The U.S. Supreme Court has ruled that communities must provide zones for sexually oriented businesses, no matter how undesirable local residents and business owners may find them.

        A committee of Kenton and Campbell county officials is studying whether a multi-county community would comply with the Supreme Court ruling, giving officials more flexibility in finding locations that balance the First Amendment rights of sexually oriented businesses with community concerns.

        “They just want to put these adult businesses out in the southern end of the county, out of sight, out of mind,” said Barry Brake, project manager of JF Brake Interiors, an interior finish construction business on Mary Laidley Drive.

        Mr. Brake said allowing sex businesses in the Kentucky Enterprise Zone violates one of the main goals of the program, which is to stimulate light manufacturing and industrial businesses. He added he's also concerned about the potential for theft if sex businesses locate in the area, as well as the difficulty in renting to tenants.

        Kentucky State Sen. Jack Westwood, R-Crescent Springs, said that he has agreed to meet with the Schneiders next week to discuss the business owners' concerns.

        “I personally don't agree with the Supreme Court's ruling,” Sen. Westwood said. “I want to hear what the business people have to say and see if there's some way we can encourage the city to keep looking (for sites for adult businesses). We all need to put our heads together and see what we can do in light of the Supreme Court decision.”

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