City officials say the Queen Bee Vietnamese nightclub has failed to establish a restaurant as required by its operating permit.
The city threatened to revoke the Beach Boulevard nightclub's business permit in June but delayed action to give owners six months to begin restaurant operations.
A conditional use permit issued in January 1995 requires the nightclub to maintain a full-service restaurant. City officials say the requirement is intended to limit the number of bars in areas of the city.
Because a restaurant had not been established, the Planning Commission revoked the nightclub's conditional use permit in October 1996. But owner Larry Nguyen appealed the decision to the City Council, which has repeatedly delayed the revocation to give him time to establish a restaurant.
Nguyen could not be reached for comment.
The City Council is expected to make a final decision in January.