SAN ANTONIO -- A northwest side neighborhood was surprised to learn about a new neighbor at their children's school -- an adult club.

San Antonio residents are starting to see them near homes, schools and churches, and putting them there is legal, officials said.

On Friday night, defenders said they went undercover to expose flaws in the laws. They said they went to West Avenue's Club Babylon, billed as a bikini dance club.

The club is a "Bring Your Own Beverage" and not licensed as a sexually oriented business, so certain body parts must stay covered.

But on hidden camera, KSAT said it found topless dancers, which is a violation of city code.

"I basically wear lingerie just like this, and all I do is just dance," said Babylon dancer Samantha Garcia.

Garcia, 18, admitted some girls do go topless.

"There's some of them that take their tops off, but I don't," she said.

The manager said that when it happens the girls are punished.

"They have done it before. We send them home," Club Babylon manager Manuel Alvarado said. "We follow Texas rules -- Texas laws."

The city has already shut the club down once for illegal nudity, city officials said.

"We did do an investigation, and we did find out that they were operating, indeed, as a sexually oriented business," said Rod Sanchez, the Director pf Development Services.

The club is in the same area as three churches: Gethsemane Lutheran, Restoration Community and El Centro Cristiano; an Educare Child Care Center, and a Head Start program. West Avenue Elementary School is also right down the street, and each day kids walk past the club on the way to and from school.

"I think it's bad. I would like to shut it down," parent Melissa Quirino said.

"It's just appalling that this strip club is here. It's just -- I'm very shocked," parent Maricela Ochoa said.

Perhaps most shocking is that with no liquor license and no sexually oriented business license, that kind of club can open almost anywhere.

"As long as those body parts are covered, they are technically not a sexually oriented business," Sanchez said.

The club is open 24 hours a day.

Because the city can't possibly make sure the proper body parts are covered all the time, neighbors of Club Babylon would simply like clubs like this to be classified as sexually oriented businesses, which would require a change in the definition and a vote by the city council.