According to the California Department of Alcoholic Beverage Control, investigators are looking into whether there are any liquor license violations at nightclubs Hyde Lounge and Industry.
Regulators say they want to see food records for the nightclubs.
Both Hollywood hotspots are owned by Sam Nazarain, a man Newsweek magazine once dubbed "the King of Los Angeles Nightlife." If a club is hip and filled with celebrities, it's likely owned by Nazarain. As CEO of SBE Entertainment Group, Nazarian runs luxury hotels, restaurants and nightclubs.
The Wall Street Journal reports that his restaurants and nightclubs make at least $100 million a year. When NBC LA recently visited Industry on La Cienega Boulevard, we were told bottles start at $395 and the club had a $2,000 minimum that night.
Despite the club atmosphere, as far as ABC is concerned, Industry is licensed as a restaurant. As is Hyde Lounge. They have type 47 liquor licenses, meaning, "You have to make substantial sales of food versus alcohol," says ABC Assistant Director Joseph Cruz.
According to ABC, a venue with a type 47 liquor license has to offer a menu, serve food and allow minors.
NBCLA producers went to Hyde Lounge on Sunset Boulevard three times and couldn't get food, even though according to its liquor license, it's a restaurant.
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Our producer was also frisked at Hyde -- how often does that happen when you got out to eat?
At Industry, the menu is taped to a door on what looks like the coat checkroom. They offer a small selection of mini burgers.
If Industry is a restaurant, why were we charged $100 to get in?
According to city records obtained by NBC LA, Industry's conditional-use permit prohibits it from being "used solely as a dance hall."
"No portion … shall be deemed … private," as in a VIP section. Also, according to the permit, Industry must operate as a "bona fide restaurant" with an "assortment of foods" and "loitering is prohibited."
Neighbor Heather Paterson says the nightclub has changed the neighborhood.
"A couple of people called the police Saturday night because of gunshots and it was a round," Paterson said.
City Councilman Paul Koretz says he is also upset. Industry and Hyde are in his district.
He's called for an investigation based on NBC LA's report.
"We're going to be sure the city comes down on them and enforces it, and requires them to serve food and operate as a restaurant," Koretz said.
Sam Nazarian refused NBC LA's request for an interview for this story. According to his office, "they don't comment on pending investigations."
