A gunfight outside a north-side hookah bar which sent two people to hospital on New Year's Day and has renewed calls from neighbours who want the place shut down.

People in the Alberta Avenue area say they've complained about the hookah bar for months.

From the outside, the bar on 111th Avenue and 93rd Street looks more like an abandoned building.

Hookah bar

From the outside, especially at night, the bar on 111th Avenue and 93rd Street looks like an abandoned building. (CBC)

"It's a bar that looks shady," said Cris Basualdo with the Alberta Avenue Community League. "It doesn't have any signage, it has blacked out windows, and we were concerned it could turn into something really bad."

Around 4:30 a.m. on New Year's Day, police were called to a shooting at the Eclipse Lounge and Hookah Bar. Police said about 50 people were at the bar at the time, and when officers arrived the scene was chaos.

Staff at the nearby Royal Alexandra Hospital soon reported two men had been dropped off with gunshot wounds.

The bar has a permit to sell tobacco and hookah products but was denied a licence to operate as a bar.

Basualdo said she has complained to the city since September about the business, which she said operates as an illegal hookah bar and attracts shady characters.

"This wouldn't happen in other areas in the city," she said. "I firmly believe that if something like this was operating illegally on Whyte Avenue or on 124th Street, any other area of the city … it wouldn't have gone on this long."

The city and police say they're currently working to determine the appropriate course of action.

"The follow up that is necessary around checking to make sure that the use aligns with the development permit and the business license still has to occur," said Peter Ohm with the city's sustainable development department. "And we're going to be informed by the activities by the investigation of police."

Det. Ryan Ferry said in a statement the police department's hospitality unit has conducted uniformed walk-throughs of the venue.

"They have been granted a business licence permitting retail sales and tobacco sales," Ferry said. "And we have been going through the process of determining if they are operating in accordance with the requirements of that licence."

No fines have been levied against the owner, Ferry said.

Basualdo said she hopes the city finds a solution before there's more violence.