Club owners and night owls are rejoicing.

The number of late-night permits issued to city hot spots soared 30 percent in 2004 -- a year after the city's Entertainment Commission took over entertainment permitting from the police department -- bringing more jobs, tax revenue and nocturnal fun-seekers to the city.

"In 2004, the commission gave out more late-night permits than the police had in the previous eight years," said Entertainment Commission member Terrance Alan. "For the first time in a long time, people are really investing in entertainment."

A late-night permit allows a club or restaurant to stay open past 2 a.m., when alcohol stops flowing. Of the 108 extended-hours permits in San Francisco, 25 have been granted since 2004. (A few are for new owners of existing clubs.) Locales all over the city have snagged them.

It's difficult to estimate how much revenue this generates for city businesses. However, attorney Mark Rennie, who represents more than 30 city nightclubs and bars, said, "If you increase the market 30 percent and nobody was crying the blues about too much competition, I think you could speculate business is up 30 percent."

Certainly, extra operating hours mean additional wages for bartenders, waiters, bands and DJs.

"Kelly's Mission Rock has 50 or 60 people on the payroll," said Entertainment Commission Executive Director Robert Davis of the waterfront club fighting to keep its permit after neighbor and police troubles. "They start at lunch and run through to late at night. There's the contributor to the tax rolls and overall economic vibrancy of San Francisco."

Rennie said the number of suburban folk coming in to the city is increasing. "I'm a 20-something-year-old, I can go out in Walnut Creek until 2 a.m.," he said. "Or I can come in and do a whole night in the city, have dinner, go to one place, then another after-hours, stay over with a friend and have breakfast in the city."

The Entertainment Commission formed at the will of voters in the summer of 2003, who decided an independent group -- with members from the nightlife industry, neighborhoods, urban planning, public health and law enforcement -- should issue entertainment permits. The commission conducts permit hearings and acts as a liaison between owners, the police and other city groups and tries to make businesses feel welcome. Davis said extended-hours permits give venues flexibility to respond to the changing tastes of patrons, who may like late-night DJ parties one year and live bands the next.

"The commission has a willingness to try to give business people as many options as possible," said Davis. "So, philosophically, there's a difference. The police were far more reluctant and felt it was a tax on their resources."

Previously, the San Francisco police department managed the permitting, complaints and enforcement of city clubs.

"In the 1980s and 1990s, kids from L.A would get on a plane and come to San Francisco because it was more exciting," Rennie said. "But as the police put the squeeze on the clubs, the reputation was that San Francisco got boring."

Steven Lee, general manager of the Glas Kat club in SoMa, is happy with the new system: "Although the police were trying to be fair, they were pretty weighted with the neighbors."

The SFPD is, in fact, glad to be rid of late-night permits, said San Francisco police permit officer Ed Anzore. Entertainment permitting was viewed as a headache, particularly the weekly hearings where neighborhood residents frequently unloaded their complaints.

"There are like 450 places of entertainment in the city," Anzore said. "That's 450 permits we don't have to deal with."

To prevent problems, the Entertainment Commission requires applicants to meet with residents before requesting permits.

Lee said proliferation of late night venues spreads a limited number of patrons more thinly.

To Rennie, it's a matter of degree. "You don't want to have three times more late-night permits because then everybody will die on the vine," he said. "But 30 to 50 percent creates something more interesting, more of a scene."