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Representatives from a local Madison bar called capacity restrictions a “catch-22” at a Capitol-area neighborhood meeting Monday evening, adding the constraints are preventing the business from generating sufficient revenue.

The current 216-occupant capacity for Madison’s Downtown, located at 119 North King St., was set years ago when the location was a clothing store. However, when fire inspectors reexamined the site months ago, it was determined the site could operate with a maximum capacity of 340 occupants, according to the bar’s co-owner Andy Haker.

“We are not looking for anything crazy. We just want a comfortable business environment,” Haker said. “We do not want to pack them in like college kids do.”

The reason for the proposed increase in capacity is to encourage patrons who are currently forced to wait outside for a dining table to stay during the prescribed wait time and have a beverage or appetizer, said Haker’s father and ownership partner, Lynn Haker.

According to Madison’s alcohol policy coordinator Katherine Polminsky, increasing the number of occupants under the site’s current operations poses a serious issue.

Madison’s Downtown currently operates with 35 percent of revenues from food and 65 percent from alcohol. As required by law, this does not meet the mandatory minimum of a restaurant classification, which demands a 50/50 revenue split between alcohol and food, according to Ald. Mike Verveer, District 4.

“We have a dilemma because the Madison ordinance and alcohol density plan does not, by law, allow for increased capacity if you are an existing tavern in the downtown area — you have to be a restaurant,” Verveer said. “And you do not meet the definition of a restaurant today.”

However, the elder Haker said the only way to increase food sales and overall revenue is to increase capacity — thus the creation of a “catch-22.”

“There is not a magic switch that you flip to go from 10 to 60 percent overnight,” the elder Haker said. “We have increased food over time. We have hired a new chef, and our goal is to create a comfortable environment for our customers. The last thing we want to be known as is a place that is a trouble spot or is not run properly. I try to make this the best that we can.”

Despite the announcement that Madison’s Downtown does not meet requirements by law to increase capacity because it is not a restaurant, the owners still plan to request for the capacity restrictions to be lifted at a City Council meeting May 6, said the elder Haker.

In addition to the Madison’s Downtown discussion, Majestic Theater co-owners said at the meeting they would like to expand their hours of operation to stay competitive with neighboring bars while allowing occupants for non-ticketed events to move about the entire facility.

“Our bills are alarmingly high, and it is hard for us to stay afloat. As many of you know, this is a very competitive business. We want to offer whatever we can,” Gerding said. “You need to be able to have the same competitive advantage as everyone else does.”

Correction: Due to an editing error, this article erroneously cited the Capitol-area neighborhood meeting as a Capitol Neighborhoods meeting. We regret the error.