The D.C. Board of Zoning Adjustment, in a ruling that could give city neighborhoods legal ammunition to move against sexually oriented businesses, has upheld an order revoking the occupancy certificate of the Californian Steak House, a 14th Street nightspot featuring naked dancers.

The unanimous ruling by the five-member BZA marks the first time the board has moved to revoke a certificate of occupancy because of sexually oriented activity, according to Steven Sher, executive director of the D.C. Zoning Secretariat.

The decision, reached Wednesday, will not be formal until the board publishes a written order, which may take several months. But Norman M. Glasgow Jr., the lawyer who initiated the action against the steak house, said yesterday the ruling has "far-reaching impact" on similar sexually provocative shows in other nightclubs.

The BZA "has made it clear that those businesses where activity takes place for the purpose of sexual stimulation or arousal, even though there is no actual touching by either patron or performer, can constitute a sexually oriented business" that is in most cases prohibited, Glasgow said.

Long-established businesses, such as those on the 14th Street strip, would be unaffected by the BZA ruling, Glasgow said. But any which started sexually oriented shows since the 1977 passage of zoning laws governing sexual activities could possibly be closed, he added.

The ruling was welcome news to neighborhood groups that had joined in asking the BZA to uphold the revocation. Community groups expressed concern that if the Californian Steak House was successful in its appeal of the March 24 revocation, they would be unable to stop similar establishments from beginning operation in their neighborhoods.

"We are very happy with the decision because it nails down the law," said Thomas Lodge, spokesman for the Logan Circle Community Association. "We can now look at a business anywhere in the city and be able to know that we can go through a legal process to deal with it."

The Californian Steak House's lawyer, Larry C. Williams Sr., said yesterday he believes his clients, Abdolali Mehraz and Kourosh Movahedi, will appeal the decision. He also said the restaurant would seek a restraining order if and when the city tried to close the business at 831 14th St. NW.

The Californian case was initiated by Jeffrey N. Cohen, one of the city's most active real estate developers, who owns the building housing the restaurant and who plans to develop offices on the site. Cohen, unsuccessful in numerous efforts to evict the tenant, complained to zoning officials that sex shows violate 1977 zoning regulations.

The regulations prohibit sexually oriented businesses throughout the city, except in high-density zones such as downtown. The 1977 rules also say that such businesses must apply for special exceptions to conduct sexually oriented activity. No such exceptions have been granted since 1977.

The Californian Steak House, which formerly was a restaurant and started naked-dancing shows several years ago, attempted to convince the BZA that unclothed women dancers are not sexually arousing--unless they actually touched patrons. If naked dancing alone is not sexually oriented, Williams argued, it is therefore not prohibited.

Neighborhood groups feared that if the restaurant's definition of sexual activity was upheld, then topless dancing would be allowed throughout the city, Lodge said. "These places are popping up periodically," he said, "and the great danger is that the definition of 'sexually oriented business' would enable them to operate outside the law."

The BZA ruled that the steak house "was, in fact, a sexually oriented establishment" and therefore was operating illegally since it has only a certificate to run a restaurant, Sher said.

In appealing the decision, Williams said he plans to argue that the definition of sexual activity in the law is unconstitutionally vague. graphics/photo: Restaurant on 14th Street that features nude dancers may have occupancy certificate revoked.