Toad’s Place may relocate this spring to the vacant Palace Theater on College Street, according to two unconfirmed reports.

Recent construction at the long-dormant theater, as well as the impending 90-day liquor license suspension that Toad’s faces, have sparked rumors among local business owners and city residents about whether Toad’s is planning a move to the Palace. It remains unclear if such a relocation would be permanent, just for the length of the club’s shut-down, or if the nightclub would ultimately keep both locations. Toad’s has occupied its current building at 300 York St. since its opening in 1975.

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Employees at several College Street businesses near the Palace said they have recently heard rumors that Toad’s may move into the theater, which has been vacant since 2000, but many said they had heard a number of similar rumors involving other tenants and that nothing has ever come to fruition. None said they had heard any specifics about the nightclub’s prospective move, although many reported seeing construction crews working at the theater in the recent months.

Toad’s owner Brian Phelps could not be reached for comment Wednesday.

The New Haven Register, citing unnamed sources, reported Wednesday that Toad’s will move to the Palace when the club’s 90-day liquor license suspension takes effect in May. Last week, the New Haven Advocate reported sightings of construction workers and Toad’s employees entering and leaving the former performing arts center.

Around midday Wednesday, no construction workers appeared to be present at the Palace, although the theater’s front door was left partially open and new construction supplies could be seen inside the building. The theater’s lobby, though dark and empty, appeared to be recently gutted and undergoing a renovation.

Officials from College Street, LLC — the developer of the Palace site, as well as the Chapel Square Mall and several other city properties — did not return phone messages Wednesday.

For downtown businesses, Toad’s could bring more late-night street traffic to an area that already benefits from the nearby Shubert Theater, Criterion Cinemas and the bars and clubs of the Crown Street entertainment district. Yunus Tomasadi, who works at King Falafel on College Street, said his restaurant already stays open as late as 4 a.m. to serve patrons from nearby bars and clubs, and that Toad’s would fit right in with the other entertainment options in the area.

Tomasadi’s customers have mentioned hearing rumors that a new tenant was moving into the Palace — located between Chapel and Crown streets, about half a block from Old Campus — and construction has been visible at the site for weeks, he said.

“I said, ‘Oh man, what’s happening here?’” Tomasadi said. “We’d love to have Toad’s here.”

A move by Toad’s could have the opposite effect on York Street shops, for which the nightclub provides a steady stream of passersby on most evenings.

George Koutroumanis, co-owner of Yorkside Pizza & Restaurant on York Street, said he had heard talk several months ago that Toad’s was looking into holding concerts at the Palace Theater site. He said he was not sure if the club was planning to relocate there or would simply open a second location in the Elm City. Regardless, having Toad’s as a neighbor is good for business, Koutroumanis said, given his restaurant’s proximity to the popular venue.

“When they have a nice show, usually an older show, people will come in for dinner,” he said. “And at an all-age show, sometimes parents will drop off the kids and come in for dinner. Having them next door is a plus.”

Mike Kochis, the store manager of Ashley’s Ice Cream on York St., said while Toad’s does not usually generate much business for the ice cream shop — because “beer and ice cream generally don’t mix” — impatient clubbers stuck in long lines at the nightclub sometimes patronize Ashley’s while waiting.

Because the club has carved such a niche with its intimate York Street location, the Palace might be better suited to serve as a second Toad’s location for larger concerts, said Scott Healy ’97, executive director of the Town Green Special Services District. The 2,000-seat Palace needs renovations so extensive that any private company would be hard-pressed to make such a project financially viable without outside help, he said. But it would be an ideal venue for acts that have grown too large for Toad’s, like indie rock groups that have boomed in popularity in recent years, Healy said.

“I really don’t think he’s abandoning one site to move to another,” he said. “They’re two totally different venues, and they’ll both have a different vibe … one would not replace the other.”

In a compromise struck with the Connecticut Liquor Control Commission in November, Toad’s will close for 90 days beginning May 6 and will also pay a fine of $90,000 as a result of a 2005 police raid that found 87 underage patrons in possession of alcohol at the club. Because the closure only affects the York Street location, Toad’s is free to open at another site during the span of that suspension. In November, Phelps said closing for the summer would cost Toad’s a total of about $200,000 in fines and lost profits.