Palo Alto is backing away from a controversial proposal to require massage establishments to keep records of all their customers after several business owners and council members said Tuesday night that the new rule would go too far.

The city is in the midst of revising its massage ordinance to comply with recent changes in state law, which requires massage therapists to obtain licenses and restricts cities' abilities to regulate establishments. As part of the revision, the Palo Alto Police Department had also proposed including a clause requiring businesses to keep records of all customers, including their names, ages and contact information. The proposal would have required police to obtain a court order before it could access these records.

Police Lt. April Wagner said Tuesday that the point of the record-keeping requirement is to "assist in getting to the truth of allegations." She said the department has received about 10 complaints of criminal behavior at massage establishments over the past decade. But while these types of complaints are relatively rare, city officials are concerned that if Palo Alto doesn't adopt new laws, the city would attract seedy establishments of the sort that existed along El Camino Real in the 1970s.

Charles Cullen, the department's technical services director, told the committee that if the city doesn't revise its ordinance, it would have to repeal its existing one because the ordinance currently on the books does not comply with state law. Wagner noted that all of the cities around Palo Alto have ordinances in place requiring massage therapists to get licenses.

"If we're the one city that doesn't (have an ordinance) among a bunch of cities that do, it is sort of a green light for potentially illegitimate or improperly run businesses to do business in our town," Wagner said.

Wagner said that while sexual crimes are "very rare" at local massage establishments, they do happen.

But at their Tuesday meeting, members of the council's Policy and Services Committee voiced their opposition to the proposed ordinance and directed staff to go back to the drawing board and come back with a less burdensome proposal. Committee members agreed that the new ordinance should not include a record-keeping requirement and that it should contain exemptions for businesses that offer massages to fully clothed clients.

The exemption would apply to businesses like Happy Feet, which offers foot massages and body massages to fully clothed patrons. At prior meetings, David Bertelsen, owner of Happy Feet, argued that the proposed ordinance unfairly targets legitimate businesses.

"There's more opportunity for sexual assaults probably in this Chamber than there is in our business," Bertelsen told the committee Tuesday. "You have strangers on both sides of you most of the time. Not only do you have most of your clothes on, but you're covered with a towel over your abdomen and back areas."

Bertelsen said the problems that the police are trying to prevent -- prostitution and sexual crimes -- occur at the type of low-end establishments that haven't existed in Palo Alto for 15 years. Because of economic factors, such establishments are unlikely to return to Palo Alto any time soon, he said.

Barry Katz, a Happy Feet client who lives in the Ventura neighborhood, concurred and called the proposed ordinance "a very thoughtful solution to a problem that doesn't exist." The proposed ordinance, he said, would "make it onerously difficult for them (businesses like Happy Feet) to continue to do something no one is objecting to.

"It's working, and everybody likes it."

The committee agreed. Though members accepted Wagner's argument that the city should adopt a new massage ordinance, the ordinance should be "as light as possible," Councilman Larry Klein said. He called the record-keeping requirement "demeaning" and said that if the city ever has the kind of problems with massage parlors that it did in the 1970s, it could revise the law as needed.

"I think a lot of these provisions assume they're guilty," Klein said, referring to existing massage establishments. "I want to reverse it and make our ordinance as light as possible."

Klein's three colleagues on the committee, Chair Karen Holman and Councilmen Sid Espinosa and Greg Schmid, agreed. They voted to direct staff to return at a future meeting with several revisions, including removal of the record-keeping provision and exemptions for certain non-certified massage practitioners.