“Hey, I was wondering if you could help me figure something out. I was really flattered by your invite the other day, but I’m not interested in dating right now. I enjoy your friendship and I don’t want to jeopardize it. Is there a way we can comfortably set boundaries without ruining that?”
IMO this way you let them know you’re interested in maintaining a relationship but at a friendship level. You demonstrate that you care about their feelings while clearly establishing the need for specific boundaries.
I’ve been pronouncing it all-e-glucky