Ten years after former NYC Mayor Rudy Giuiliani decided to clean up New York by ridding it of sex shops and arresting street violators, sex shops have returned to Greenwich Village. How?

The former mayor's restrictions on the industry, passed in 1995 as a centerpiece of his quality-of-life campaign, proved toothless after numerous court challenges, and an intransigent industry has found a way to dodge nearly every regulation imposed upon it. While these stores still dot the western edges of Times Square, the Village, which has always prided itself on being a national symbol of tolerance, has become an example of how loopholes and weak language can undermine a once-celebrated law.

Residents and elected officials from the area estimate that 20 new sex-related stores have opened in the area in the past 18 months, and say that glaring neon confronts them along Christopher Street, Seventh Avenue South and Avenue of the Americas.

The loophole is one that allows stores with more than 60% of their merchandise in non-adult rated goods to operate outside "adult entertainment zones." Cops call this "sham compliance" because to fit into the exception, stores are filling the front with things like "Popeye cartoon videos dubbed in Spanish," instuctional golf and Ozzie and Harriet videos. In the back, are the thousands of adult dvds.

Bloomberg is sympathetic to the residents of the area who don't want the shops in their neighboorhood.