The Honolulu Liquor Commission has delayed a decision over a license application for a new Denny’s restaurant in Waikiki due to community opposition.

Medhat A. Bechay, owner of Diamond Head Den Restaurant’s Inc., doing business as Denny’s, is seeking to obtain a standard bar license for the Denny’s that he is constructing at 2538 Kuhio Ave.

The 5,000-square-foot Denny’s, which sits on land owned by former First Hawaiian Bank CEO Don Horner, is expected to open by the second quarter. The $6 million project was approved by the Waikiki Neighborhood Board.

The category of license Bechay applied for allows businesses to serve alcohol from 6 a.m. to 2 a.m. daily and is common in the Waikiki resort district, which also has cabaret liquor licensees able to serve alcohol until 4 a.m. The Honolulu Liquor Commission was supposed to rule Thursday, but, in the wake of public protest, continued the public hearing to 4 p.m. Thursday at the commission offices at 711 Kapiolani Blvd.

More than 30 protesters showed up Thursday to testify and present the commission with a petition with more than 100 signatures, said Melissa Fenlik, who lives next door to the development. Fenlik said protesters oppose the site’s close proximity to Jefferson Elementary School, the Honolulu Zoo and several residential condominiums. They also fear late-night and early-­morning alcohol consumption would increase crime and loitering around the free-standing building, said opponent Margaret Murchie.

“We continued the matter to give the licensing investigator time to determine how many protests were valid — meaning they came from registered voters, owners/lessees within 500 feet of the proposed license holder,” said Anna Hirai, Honolulu Liquor Commission assistant administrator.

Hirai said laws don’t prohibit a liquor license within 500 feet of a school. However, Hirai said Denny’s proximity to Jefferson Elementary reduces the threshold for a statutorily mandated denial to 40 percent plus one of valid protesters versus the usual 50 percent plus one. Protesters have until Monday to meet that threshold; otherwise, Hirai said licensing will be at the commission’s discretion.

“We’re working on getting additional support,” Fenlik said. “We do not want a liquor license granted as close as two traffic lanes from where children play.” The petition can be found online at 808ne.ws/dennysliquor.

Bechay said Friday that he plans to ask the commission to restrict service to inside sales of beer and wine from 11:30 a.m. to 10 p.m. daily.

“I’ve always intended to restrict alcohol sales. As a family man with a wife and three kids, it’s important to me that we are a family restaurant that has a good relationship with our community,” said Bechay, who also owns a residence on Kuhio Avenue and Denny’s restaurants in Kunia and Kaneohe.

Bechay, who owns 16 Denny’s nationwide, including three with liquor licenses, said he doesn’t expect Waikiki alcohol sales to be a moneymaker. It’s for the convenience of guests, including the tourists who come from all over the world and might enjoy a glass of wine or beer with lunch or dinner, he said.

Horner said he chose to partner with Bechay on a low-rise project that didn’t block any views, although the lot’s zoning would have allowed a hotel, time-share or miniature strip mall.

“I selected Denny’s because it’s a family restaurant and I thought it would be an amenity for the community,” Horner said. “In my discussions with the Waikiki Neighborhood Board and in my environmental assessment, I always said that there was the possibility that they would potentially offer beer and wine with the meal, but not a bar.”

Waikiki Neighborhood Board Chairman Bob Finley said he expects Horner and Bechay will keep their pledges and doesn’t understand the controversy given that the application was for a standard Waikiki liquor license.

“If they said 4 a.m., I’d be concerned,” Finley said. “Denny’s is a responsible organization. I don’t think that they’ll turn it into a dive bar.”