The previous owners of the store in the block of shops at 701 Kingsway, near Fraser Street, had been renting videos, including adult ones, under a valid video rental business licence.
In 2009, a new owner, Anthony Perry, transformed the store into an adult entertainment shop, which sold pornographic videos, sex toys and coin-operated "peep shows."
In March 2010, a city inspector concluded the Fantasy Factory, as an adult entertainment store, did not have the correct development permit under Vancouver city bylaws.
Officials with the city's development services department told Perry the store would not be successful in seeking a permit, as several qualities — including floor layout and use of blacked-out windows — would not conform to zoning bylaws.
In July 2010, Perry submitted plans to drop the adult video rental and peep show portion of his business, alter the interior layout and put displays in the window space in order to conform to the city's rules.
But because the building's location and configuration didn't comply with zoning regulations — and because of petitions and a neighbourhood survey that came back opposed to the store — the city decided it couldn't allow the permit to go through.
When the city ordered Perry to close the shop in September 2010, he disputed the decision.
'Army and Navy of sex stores'
He argued at least 17 other stores in Vancouver, including major drug store chain London Drugs, were operating as adult retail stores without the proper licences.
He said the city was ignoring the non-compliance of a number of high-end shops and discriminating against his shop alone, which he described in an affidavit as the "Army and Navy of sex stores."
As a result of the court proceedings, a city planner confirmed a number of the 17 stores Perry named and displayed and sold "sexual paraphernalia" without holding the development permit required to do so.
The city's director of licences and inspections said he would arrange for city staff to meet with the 17 businesses and, if necessary, would attempt to bring them into compliance with the regulations.
B.C. Supreme Court Justice Peter Voith ruled he did not find the city was engaging in discriminatory behaviour.
He said the city registered its intention to go after the other non-complying stores, and it can choose how and when to do so within its own discretion.
Voith said Perry's store may simply be the first store against which the city brought the adult store licensing enforcement action.
He said it would be impossible for Perry to make Fantasy Factory comply with the area's zoning bylaw due to the physical configuration of the building, and last Friday ordered Perry to shut down the store within 90 days.
Meanwhile, London Drugs says it will continue to sell sex toys, including vibrators, at all of its locations.
"We, London Drugs, sell health and wellness products, sexual health and wellness," said London Drugs' vice president of pharmacy John Tse.
"When we met with the city, we showed them what our standards were .… They were fully comfortable with what we were doing. When we showed the city the display with the packaging of the products, they were comfortable with it."