Tauranga nightclub Bahama Hut has been branded the city's No 1 problem licensed premises by police who have opposed an application to renew its liquor licence.

The hearing into the fate of the downtown nightclub entered its second day yesterday before the council's District Licensing Committee.

Lyger Investments Ltd has applied to renew the licence for the Bahama Hut located in Unit 1 of 18 Hamilton St. The nightclub's target market was 18 to 25-year-olds.

The committee heard how the southern side of Hamilton St between Willow St and The Strand was lined with bars and nightclubs that closed at 3am, each with their own demographic of patrons.

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The Western Bay area police response manager Senior Sergeant Phil Gillbanks described the Bahama Hut as ''Tauranga's No 1 problem licensed premises''.

Although there had been improvements to the nightclub in recent months by reducing the number of patrons, there was still a large problem with people coming out of the Bahama Hut, he said.

Lyger Investments director and Bahama Hut licensee Matt Gordon told the first day of the hearing that he totally disagreed with Gillbanks' assessment of it being the No 1 licensing problem.

''That may well be the prejudice among some police, but it is simply not borne out by Mr Warner's CCTV logs, or indeed by our experience of dealing with individual police officers.''

Gordon was referring to council security camera operator David Warner. Footage last year of a fight outside the nightclub in which a man was knocked unconscious was played to the committee.

Gordon said the Bahama Hut rarely featured in the logs.

''That fact, combined with the fact we have never previously had enforcement action taken against us, despite apparently being the pinnacle of problem premises ... goes to show that his view is completely unfounded in this respect.''

Gillbanks, under cross-examination by Lyger Investments lawyer Robert Davies, disagreed that there was nothing particularly special about the Bahama Hut in the sense it was only one of the licensed premises that contributed to 500 people spilling out on to Hamilton St at 3am.

He said there was an ongoing issue that could be controlled by the licensee in terms of the number of intoxicated patrons coming out on to the street.

''The issue for me is whether they have control.''

Davies put it to Gillbanks that there were hundreds of CCTV logs over a year, with the Bahama Hut mentioned a handful of times.

Gillbanks said he could not comment without seeing the logs. There had been an improvement since the nightclub was taken to task over patron numbers, followed by changes inside and outside the club, but the design was still hard to police.

He said if the licence was refused, the situation would improve. Gillbanks based this on his experience in the Manawatu where an area improved after a bar that caused issues had closed.

Davies put it to him that if intoxicated patrons were leaving the premises, why wasn't enforcement action taken against Bahama Hut.

Gillbanks said he could not answer that question. For him, Bahama Hut being the No 1 problem was around policing and staff resources and the number of people who had their last drinks at the nightclub.

''Talking with all Western Bay police, the Bahama Hut is the No 1 issue.''

He said that in some respects, it was because the younger patrons did not handle their alcohol. On a scale of one to 10 on alcohol-related issues, he put the nightclub at around eight or nine.

The hearing continues today.