The Hankens, who own the neighboring sewing shop Top Stitch, say they have seen people urinating in the parking lot, leaving children alone in cars, publicly drinking and, once, a man reading a magazine in a car who appeared to be masturbating.

"These incidents have nothing to do with free speech, or free expression, which is the road people want to go down when we talk about porno," Jonathan Hanken says.

Urged on by people such as the Hankens, state lawmakers are considering putting a law before Oregon voters that would allow communities to zone sexually oriented business.

But Kathy Nevans, Castle's manager, says the Hankens are the only neighbors of her business who are bothered and she said their reports are false.

"We have not been having the problems they say we've been having," Nevans says.

Police say that they don't have evidence of the extent of criminal activity the Hankens describe. Nearby residents and other business owners say they haven't seen these problems either.

Even so, most neighbors say they resent the presence of the 18,000-square-foot sex shop.

"I haven't had problems, but it is constantly a source of discomfort," says Terry Lanuevo, whose condominium is nearby.

Castle Superstore -- with its assortment of lingerie, magazines, books, oils and sexual paraphernalia -- moved into a former grocery store on Progress Drive near Biddle Road last September.

City residents urged the Medford City Council to come up with a zoning ordinance to move the store away from a residential area. The city attorney and a panel of private attorneys advised against it and the council finally rejected the idea.

This past week, the Hankens joined a contingent from Medford and Portland that urged lawmakers in Salem to put a zoning bill before voters.

The Hankens, whose business window looks onto the Castle parking lot, testified that they have seen several incidents of criminal activity.

Medford police Lt. Tim George says police are not getting the "substantial amount of calls" the Hankens describe.

"If there are things that are occurring that aren't being reported, then we need to find out," George says.

George says the city has a nuisance ordinance to take care of businesses or residences that have chronic problems with criminal activity.

"So far there isn't the type of activity in that area that the nuisance ordinance could go into effect," George says.

Jonathan Hanken, who has owned the sewing shop since January 1998, says he never called police when the business next to his shop was a grocery store.

He says police are not seeing the activity that he and his wife see regularly.

"Much of the time, police get here after the perpetrator has left," he says.

The Hankens say the sex shop is hurting the shopping plaza in other ways. They say Castle customers park in their lot to patronize the sex business.

"The majority of their shoppers don't want their cars and license plates in that parking lot," Karen Hanken says. "So they park in my parking lot."

In a letter to the editor of the Oregonian published on Jan. 20, Karen Hanken wrote that the Biddle Center next to Castle was once a fully occupied retail center but is now "30 percent empty."

Lloyd Thompson, of Lloyd Thompson Co., who owns the Biddle Center, says only one business out of the 11 stores in his center is vacant -- and the vacancy isn't because of Castle.

"We haven't experienced any vacancies due to any part of that being around," Thompson says.

However, he says his center faces away from Castle. He also says he sympathizes with the Hankens.

"The city has the potential to rezone bars and different things like that," Thompson says. "What's the difference with this (Castle)?"

Marie Callender's Bakery & Restaurant opened at 1528 Biddle Road across the street from Castle after the sex business opened.

Eddy Stiffler, the restaurant general manager, says he hasn't seen anything occurring across the street.

"Since there is a street that separates us, we haven't had any problems whatsoever," Stiffler says.

Kinko's Copies -- another store close to Castle -- did not return phone calls to its corporate offices in Ventura, Calif.

The Hankens say property and business owners don't want to talk about possible problems.

A condominium complex is directly east of Castle, separated from the building and its parking lot by a wooden fence. Residents say they haven't seen any problems with the sex shop, but they still don't like the business.

"Just the fact that it is there is like a thorn in your side," Lanuevo says.

Resident Susan Quitt says she was one of the people calling for a city ordinance to zone adult businesses away from residential areas.

"I'd love to see them go out of business like probably everybody else."

Nevans defends her business, saying she wants to hear neighbors' complaints so she can help solve them.

She says her employees check the parking lot for litter every half hour.

"We have never found any condoms, magazines or newspapers," says Nevans, who wears a tie detailed with colorful pictures of condoms.

She says the Hankens are exaggerating and making up the problems.

The Hankens deny that. They point out that their business window opens onto Castle's parking lot and note that Nevans has a wall and frosted windows obstructing her view of the lot.