Krave Massive Shock Shutter: Kelly Murphy's Shady Past Now in the Spotlight

Krave Massive, relentlessly touted by owner Kelly Murphy as the "largest gay nightclub in the world," abruptly shuttered at Downtown's Neonopolis on Friday right before a busy Labor Day weekend and the start of Las Vegas Pride. Minority partner, Zappos head Tony Hsieh's Downtown Project, is in negotiations to take complete ownership of the venture. As the full, currently vague details begin to surface, the shady past and indiscretions of Murphy, including prison time and numerous accusations of financial impropriety, are once again resurfacing and the failure comes as little surprise to the impresario's many detractors.

In a statement to the Las Vegas Review Journal, the Downtown Project announced "the State of Nevada closed Krave due to permitting issues." Krave Massive's only official response via Facebook was characteristically upbeat and evasive. "Krave is pleased to announce that we have entered into a tentative agreement to be acquired by a new owner! While the final terms are concluded, we have decided that during this transition to a bigger and better Krave, we will not be open this weekend." The exact State permit violations that precipitated the shutdown have yet to be declared. Drink & Drag, Murphy's adjacent bowling and drag queen highlighted club, is currently unaffected by this closure.

Krave Massive debuted on June 15, having long missed its scheduled December 2012 debut date and opened lacking many of the promised assets that would have allowed it to truly lay claim to the title of "world's largest gay nightclub."

Murphy shuttered the original Krave nightclub at the Strip's Miracle Mile Shops last October. Plans for his 80,000-square-foot takeover of the former Galaxy 11 multiplex movie theater at Neonopolis included the huge main club room, a hip-hop room, a Country and Western room, a Latin room including tiered seating, an EDM room, Indigo Lounge, their member's only VIP space, a comedy lounge, a nightly show called Extravaganza to be produced by Murphy and a performance called Boots N Boys, similar in style to Chippendales. Plans for a magic show had been jettisoned earlier in the development process and a proposed outdoor pool was still on the wish list.

Two movie theaters were held back from the demolition to project LGBT-themed films, but no pornography. On opening night only the main dance floor and three bars were finished. Social media reviews criticized the club for not validating parking despite promoting the perk on their Website and the practice of charging differing prices for the same drink at each of the bars.

Hsieh's investment was issued via his FatMD IG LLC, an LLC name connected to his other investments in Downtown's forthcoming Banger Brewing and Michael Morton's Project Lion wine bar at the MGM Grand. In July a representative for the Downtown Project classified their relationship with Krave, as "a passive investor." The total financial extent of their investment has not been revealed, but Hsieh is listed as a "Manager" for the project.

Krave had also entered into a partnership with Caesars Entertainment to provide room packages and shuttle service from Caesars properties to Fremont Street. Krave operated a temporary club at the Rio's Crown Theater and Nightclub and at the Hard Rock Hotel while waiting to open at Neonopolis.

Also in the spotlight following this shutter, Mayor Carolyn Goodman, a passionate advocate for the project and a motivating force for fast-tracking all permits and permissions.

None of these parties appeared concerned by dramatic incidents from Murphy's past, all available via public record. Krave filed for bankruptcy protection in 2010 with liabilities of $3.5 million. Murphy was able to buy back the Krave assets at the fire sale price of $150,000 when they went up for auction to pay off some of the bankruptcy debt.

Astonishingly, Murphy's documented crime has gone unreported in Las Vegas. In August 1994 Murphy pleaded guilty to bank fraud in San Antonio after being caught using his 7-year-old son's Social Security number to obtain three bank loans totaling $73,500. He was released from jail in December 1995.

Despite a felony conviction Murphy has been able to secure Nevada State liquor licenses for his enterprises via his LLC, legally purchasing dormant licenses and transferring ownership. For Drink & Drag, Murphy bought the license from Drejo Enterprises LLC, who operated Tom Peter's Gaming Bar. For Krave Massive he purchased a shuttered Lone Star Steakhouse and Saloon license for $35,000, half the cost of purchasing a new license from the City. Despite the bargain price, at the time of Krave Massive's opening in JUne, Murphy still had not paid the former owners for the transfer. The club was allowed to premiere under a temporary license, utilizing the Lone Star name. A hearing for the scheduled extension of the temporary liquor license now in Murphy's name is coincidentally set for Wednesday, Sept. 4.

Refusing to lay low, numerous complaints of Murphy bypassing approved liquor vendors and purchasing liquor at retailers and discount supermarkets have been reported to the State taxation offices as late as June of this year. Sources tell Eater Vegas this was a long rumored practice at the former Strip location.

The club estimated they would be receiving 2,000 to 3,000 customers a night. Social media reviews suggest the actual customer number was far lower. Krave was renting the space from Neonopolis landlord Rohit Joshi for $30,000 a month, a minor burden for the new bosses, the well-healed Downtown Project, who nevertheless have no previous experience running a nightclub on this scale.

While the shutdown does does not affect Drink & Drag, still in limbo is Murphy's other current project, Boys Lounge, long destined for 4640 Paradise Road. That project is still being promoted with an ever optimistic summer opening.
· State Closes Troubled Krave Massive [LVRJ]
· All Coverage of Krave Massive [~ELV~]