Legends, the UK's largest exclusively gay hotel, is reopening this month after a £3 million makeover and will now be able to serve drinks all day, every day.
Brighton and Hove City Council agreed to grant the licence at a meeting yesterday.
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Residents complained that allowing 24-hour drinking and music would not give them any respite from noise and the council agreed to impose a number of conditions to limit disturbance.
Legends in Marine Parade, Brighton, will reopen in early November.
The venue will boast a bigger ground-floor bar with a terrace, providing a "club atmosphere" into the early hours. Cabaret and karaoke events will also be held three or four times a week.
A new dance venue is being launched in the basement, which will host DJs. The hotel will join a handful of 24-hour bars in Brighton, which are allowed to serve alcohol all day.
Licensee Anthony Chapman told The Argus on Tuesday a strict door policy would be in place after 10.30pm, allowing only hotel guests and members of the public vetted by the management to enter.
Residents wrote to the council complaining the extended hours would create late-night noise and more crime in the area.
Paul Davies, concierge of the Van Alen apartment block next door to the hotel, asked the council to turn down the venue's request.
He said: "Legends is adjacent to residential properties making the granting of a daily, 24-hour licence completely incompatible on grounds of noise and social harmony.
Courtesy of the Argus

