Las Vegas Sun

October 24, 2014

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Joe Downtown:

Joe Downtown: Shuttered Krave Massive nightclub lacked sales tax permit, official says

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Steve Marcus

Las Vegas Mayor Carolyn Goodman tours the main dance floor of Krave Massive gay nightclub with owner Kelly Murphy in the Neonopolis Mall in downtown Las Vegas Thursday, Aug. 8, 2013. The nightclub opened in June.

Krave Massive Under Construction

A rug representing the gay and lesbian community is on display during the construction of a dance club inside Krave Massive, the world's largest gay club, featuring a Top 40 Club, Hip Hop Club, Country Saloon, Men's Revue Show and more in the reconstructed theater space at Neonopolis in downtown Las Vegas, March 7, 2013. Launch slideshow »

A state official said downtown Las Vegas’ Krave Massive nightclub, which vowed a year ago to become the largest gay nightclub in the country, was closed a week ago because it did not possess a sales tax permit.

Taxpayer confidentiality laws, however, prevent state officials from detailing reasons why the club was without a permit, said Chris Nielsen, director of the Nevada Taxation Department.

Nielsen said the permit “is required to operate.” He added the state is “currently working with them to resolve any outstanding issues.”

A Downtown Project source said the issue boils down to the nightclub’s “lack of funds,” but did not offer further explanation.

The Sun unsuccessfully tried several times today to reach Kelly Murphy, Krave Massive owner. The Los Angeles-based public relations firm that worked with Krave last summer, when Murphy announced his move former theater space inside Neonopolis, hasn’t worked with Krave since May, a spokesman for the firm said.

Krave Entertainment has had previous financial problems.

In 2010, it filed for bankruptcy protection, facing some $3.5 million owed to almost 200 creditors, including roughly $500,000 to the Nevada Department of Taxation and $200,000 to the Internal Revenue Service.

Bankruptcy court documents show one offer to those two entities totaled $150,000 — $140,000 to the IRS and $10,000 to the state — pending the sale of Krave’s assets for $150,000.

In October 2010, the sale of assets for $150,000 to Murphy and a partner was approved by a federal bankruptcy judge.

Nevada’s Secretary of State documents show that FatMD KRAVE IG LLC incorporated in January 2013, with DTP (Downtown Project) Small Business LLC listed as managing member.

Downtown Project has said that it was a minority partner with Krave.

That may soon change, however, as Downtown Project has been in negotiations for a week to obtain 100 percent ownership of the nightclub. As of this afternoon, Downtown Project spokespeople said the negotiations had not yet concluded.

Anjeanette Damon contributed to this report.

Joe Schoenmann doesn’t just cover downtown; he lives and works there. Schoenmann is Greenspun Media Group’s embedded downtown journalist, working from an office in the Emergency Arts building.

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