LINCOLN — A downtown Omaha nightclub that’s already in trouble with the City Council — as well as its landlord — got a stern warning from a state liquor board Wednesday: Pay your bills or lose your liquor license.

Club Karma, which has been the target of complaints by downtown neighbors about loud music, fights and drunken behavior, was ordered by the Nebraska Liquor Control Commission to pay its delinquent liquor bills within 30 days or its license will be canceled.

The club’s owner, Paul Hyde, didn’t attend the liquor board’s meeting Wednesday, but later, when reached by The World-Herald, said he’s planning to pay what he owes in liquor bills and seek a “better suited” site for his nightclub, now located at 1421 Farnam St.

“We do not want to stay in that building between the issues with the neighbors and the issues with the building itself,” Hyde said.

The club was ordered evicted from its location on Oct. 2. Court files indicated that the owner of the building, Bread Pudding, first filed an eviction request on Aug. 21, claiming that Club Karma owed more than $27,000 in back rent. That figure had grown to more than $40,000 when the landlord filed a second eviction request on Sept. 19.

Last month, the Omaha City Council took the rare step of ordering Club Karma to reapply for its liquor license, an expensive voyage through government red tape that often persuades a bar owner to close up shop.

Hyde said Wednesday that he plans to reapply for his liquor license, though it would be at another location in the downtown-Old Market area. He said Club Karma has been closed in recent weeks because of water damage caused by a leaky roof. The last Facebook post for the business was Sept. 26.

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Christopher Rau, a representative of a liquor wholesaler, told the Liquor Control Commission that the nightclub had quit paying its bills in July and owed his company, Southern Glazer’s, more than $14,000 for cases of liquor.

Hyde said Wednesday that someone had stolen his checkbook, which prompted a change in bank accounts that interrupted the automatic payment of his liquor bills. He said he’d already arranged with a collection firm to begin paying off his liquor bill. Hyde said he had a conflict Wednesday that prevented him from attending the liquor board’s meeting in Lincoln and explaining his plans.

Hyde also owes the City of Omaha more than $10,000 in unpaid city restaurant taxes, according to the City Finance Department. The tax is charged on food and drink purchases, but Hyde said Wednesday that he’s contesting his bill because he thinks he’s been mistakenly billed for taxes for food purchases when Club Karma has no food service.

City Treasurer Donna Waller said she is unaware of any protest lodged by Hyde, adding that he’s been asked to meet with city officials more than once to explain why he was delinquent and he didn’t show up. Part of his debt to the city has been turned over to a collection agency, she said.

“We’re not trying to put these people out of business ... but fair is fair,” Waller said.

Club Karma has been open less than a year. According to Hyde, it caters to 20-somethings seeking a dance club. Neighbors, though, complained that the music was so loud it rattled windows on nearby apartments and condominiums.

In August, the Liquor Control Commission ordered Club Karma representatives to appear before it to discuss a disturbance that occurred at the club on June 26 and to answer an allegation that a patron left the club with an open liquor container. Then, on Sept. 10, the Omaha City Council voted 7-0 to require the club to reapply for its liquor license after hearing several complaints from neighbors.

Omaha police have filed at least five “tavern reports” about the club concerning disturbances and serving liquor after hours. Hyde maintained that problems with noise and disturbances were eliminated after he changed dance promoters this summer.

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Reporter - Regional/state issues

Paul covers state government and affiliated issues. He specializes in tax and transportation issues, following the governor and the state prison system. Follow him on Twitter @PaulHammelOWH. Phone: 402-473-9584.

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