State closes troubled Krave Massive

Krave Massive, a downtown Las Vegas nightclub with a short but troubled history, was closed by the state for an undisclosed permitting problem, and its minority owners are negotiating to take over operations.

The nightclub, which received a $50,000 grant from the city to help offset permitting costs, opened in June after months of delays that included complaints from employees and vendors who were paid with bad checks.

During the delays, owner Kelly Murphy landed the Downtown Project, a privately funded urban renewal program backed by Zappos CEO Tony Hsieh, as a minority partner in the club.

The deal helped revive construction, and the club opened in June, although vendors continued to complain that Murphy was evasive and failed to make proper payments for work done.

Now the Downtown Project appears to be taking a stronger role in the operation by entering negotiations to take over operations from Murphy.

“The State of Nevada closed Krave due to permitting issues,” the Downtown Project said in a statement. “We are currently in negotiations to become the operating entity of the business.”

Downtown Project did not say when the club might reopen or what would happen to the employees in the meantime.

Where that leaves Murphy is unclear. He did not respond to a request for comment.

An agenda item for a Las Vegas City Council meeting scheduled Wednesday shows Krave’s owners were seeking to operate under a tavern license previously used for Lone Star Steakhouse & Saloon at 3131 N. Rainbow Blvd.

The staff had recommended approval of the move pending the owners’ appearance for a background check within 30 days, a review by the City Council in six months and other conditions.

Emails from the city indicate that in late June, two weeks after Krave opened downtown, Murphy had failed to complete the purchase of the Lone Star license.

An email from an attorney for the license owner to a city licensing official said that Murphy, through his company Phantom Entertainment, had made only a partial payment for the license as of June 28.

Attorney Melissa Waite said in the email Lone Star was hopeful Murphy would close the deal.

“Our primary concern is that my client preserve full value of the asset, and not jeopardize the status of the liquor license,” he added.

Jim Difiore, a former city business licensing official who is a consultant for Krave, did not respond to a call or email seeking comment. Neither did Mayor Carolyn Goodman, who steadfastly promoted the project.

Goodman personally helped Murphy navigate the process to apply for city grants despite concerns from staff members who questioned the viability of the business.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-383-0285. Follow him on Twitter @BenSpillman702.