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Executive Director of the Crystal Kids Youth Centre, Miri Peterson, talks with kids as they play pool at the centre in Edmonton Alberta, April 4, 2013.JASON FRANSON/The Globe and Mail

The way Ha Yung Tso tells it, she simply wants to open a massage parlour – the above-board kind – in the shop below her family's apartment. But times are changing along her street.

Ms. Tso lives on Alberta Avenue, a gritty Edmonton strip undergoing something of a renaissance driven by a throng of community advocates. And many of those people say what Ms. Tso is proposing is instead, almost certainly, a body-rub joint – a sex shop just two doors down from Crystal Kids, a drop-in centre for at-risk youth.

Opponents, as such, are lining up against Ms. Tso, seeing her proposal as a symbol of a fading era of poverty, crime and prostitution in an Edmonton community fighting for its revival. "It doesn't make any sense that they would allow an establishment next to a vulnerable population," said Miri Peterson, executive director of Crystal Kids.

At a permit hearing Thursday, Ms. Peterson arrived with about two dozen supporters and more than 12,000 signatures gathered online, ready to battle the application. And next to the group sat Ms. Tso, a soft-spoken woman with broken English joined by just one person, a man named Simon Shum. But he didn't get a chance to speak.

A police officer, Detective David Schening, recognized Mr. Shum and arrested him under a charge of living off the avails of prostitution, as part of what the officer called an unrelated human-trafficking investigation. Later that day, an urban planner Ms. Tso had hired backed out of representing her.

All told, it buoyed the hopes of her opponents, who gleefully watched the arrest and don't buy Ms. Tso's argument. "To us, it looks like a sex shop and nothing else," said Bryan LaFleche, president of the board of Crystal Kids, concluding: "If it walks like a duck and it quacks – and it quacked pretty loud today – it's a duck."

Crystal Kids staff say they and the kids, ages 6 to 17, have been approached by prospective johns along Alberta Avenue, and last year the city struck up a program to chase johns away from the area.

"This isn't just some emotional thing that I woke up one day and said, 'this could happen.' It has happened," Ms. Peterson says. "And I've worked with the kids that have been victims of the sex trade. And I've actually had to help them cope with, and pick up the pieces of, both the physical harm to their bodies, psychological, mental well-being, all of that."

Among Ms. Tso's opponents is the local city councillor, Tony Caterina. The city has already rejected Ms. Tso's application. But she appealed, and now gets a hearing before the independent Subdivision and Development Appeal Board. Its members sit typically in groups of five, and are paid a small stipend.

But the board recently – against city wishes – tentatively approved a liquor-store application near a park and a community centre along Alberta Avenue. Mr. Caterina fears that could happen again and lead to an approval of Ms. Tso's project, and says it's time for the city to review what power this board has.

"They should know what direction the city wants to go," he said.

Thursday's hearing accomplished nothing. Given Mr. Shum's absence, the board granted Ms. Tso's request for a delay "in the interest of ensuring the appellant gets a fair assessment," chair Ralph Colistro told the hearing. It was delayed until May. The board is barred from speaking to the media. Ms. Tso, speaking briefly to reporters, said her business was "only massage, no [sex], 100 per cent." Asked why people say it's a body-rub parlour, she replied, "I don't know why. Upstairs, my family lives."

Body-rub parlours aren't illegal and cities are in a grey area when attempting to fight them. Edmonton has adopted new rules that, in effect, allow it to more closely monitor body-rub parlours by making them register as exactly that. Ms. Tso hasn't, though, applied to run one; if her project were approved, she'd face a penalty if the business ultimately offered sexual services.

But advocates hope it doesn't get that far. They'll return to the board in May to fight Ms. Tso's business. "You can [make a case] on an emotional appeal. You can do it on a financial appeal," Ms. Peterson said. "But either way, it's common sense."

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