CITY HALL — The Parlor restaurant and bar on Wilshire Boulevard will have to close at midnight on weekends and is barred from allowing drinking games under a set of restrictions approved by the City Council Tuesday night.

In a unanimous decision, the five council members who attended the meeting voted to reject The Parlor’s appeal of an earlier decision by the Planning Commission aimed at getting the establishment to conduct business more like a restaurant rather than as a sports bar.

Located at 1519 Wilshire Blvd., The Parlor has drawn criticism from residents who say it attracts rowdy late-night crowds to their once-quiet neighborhood.

City Hall became involved after the bar’s owners renovated their space in 2008, adding a second-story bar area. Officials said the expansion meant The Parlor needed a special conditional use permit in order to continue operations. The Parlor’s application for the permit gave City Hall an opportunity to increase its oversight of the business — and led to the appeal before the council Tuesday night.

While the council voted to restrict The Parlor’s operating hours by requiring the business to close by 11 p.m. during the week and by 12 a.m. on Friday and Saturday, the council also made one significant concession to the bar’s operators, voting to allow a maximum occupancy of 175 customers, instead of 135, the number the Planning Commission had proposed.

Residents who have slammed The Parlor for allegedly operating like a night club instead of a restaurant said they were pleased with the council’s decision, but said it’s unclear if the new restrictions will have the intended result.

“We feel as though it was really a victory,” said Diane Krakower, a Santa Monica resident who lives near The Parlor.

But she added: “I don’t believe that it’s over. The Parlor’s history is that they just continue to argue this.”

Sherman Stacey, a lawyer for The Parlor’s owners, said he wasn’t sure whether his clients would pursue further legal action, but added, “I don’t think any options have been withdrawn.”

In testimony before the council Tuesday night, Stacey and Chris Harding, the attorney for The Parlor’s landlord, took the position that City Hall doesn’t have the authority to require The Parlor to obtain a CUP, invoking the business’ grandfathered right to sell liquor.

So far the City Attorney’s office has disputed that claim, though on Wednesday Stacey said he was still waiting for City Hall attorneys to take a definitive position on the issue.

Under The Parlor’s theory that the CUP isn’t required, the bar’s owners would be able to stay open until 2 a.m. every night while admitting 168 customers.

In an e-mail to concerned residents on Wednesday, City Councilman Kevin McKeown acknowledged it’s possible the dispute could end up before a judge.

“The Parlor will have to decide within a fairly brief time whether to accept the conditions or take to a court their claim that they didn’t need city permits in the first place,” he said. “[Tuesday] was the crucial turning point, but it may take weeks or even months to fully implement the restrictions.”

In an interview Wednesday Harding said The Parlor’s owners have three months to decide whether to accept the CUP conditions, with the option of asking for a 30-day extension.

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