Andrew Marcantonio, 38, applied to Brighton and Hove City Council for a licence to sell alcohol at Nowhere Man, in Upper North Street, Brighton.
Sussex Police initially lodged an objection but withdrew it after Mr Marcantonio agreed to a number of conditions were a licence to be granted.
He agreed to restrict the sale of alcohol to people seated at tables and served by waiting staff – and he agreed that the premises should offer substantial food at all times.
A council licensing panel – made up of three councillors – considered the application on Thursday.
If the panel approves it, Nowhere Man is expected to be permitted to sell alcohol from 9am to 10pm every day.
This would be earlier than the 11pm originally requested but it would mean that the hours complied with council licensing policy. There would be no off-sales.
After reading neighbours’ concerns about noise before the licensing panel hearing, Mr Marcantonio offered to close the rear patio area to customers at 5pm each day.
Neighbour Richard Taylor told the panel: “It’s a big courtyard and it’s very noisy. Our concern is every evening is going to be very noisy for us and that would be hugely detrimental.
“The front of the café has spill-over into the street which can be an issue for us.”
Mr Marcantonio’s solicitor Piers Warne said that when the back garden closed at 5pm, smokers would be sent to the front.
Mr Warne said: “Andrew has been there nine years or so and has built up a reputation across Brighton. He’s famous for his pancakes and bagels.
“He hosts community events including craft sessions, which are variously themed, drawing classes and events on a very small scale with local acts.
“Early doors there were some mistakes made with events that caused noise. Hands are held up. Customers used the outside area where music was playing.
“When environmental protection raised the issue, Andrew reacted and we’ve not had any complaints for six years.”
One of the panel members, Councillor Andrei Czolak, asked if there were plans to host “bottomless brunches”.
Mr Warne said that this was not the case because the café was small and did not want to attract large groups.
The proposals include selling wine by the glass or bottle, craft beers and some cocktails along with food.
The panel – councillors Czolak, Emma Daniel and Julie Cattell – retired to make their decision which should be made public within five working days.
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