District bar and nightclub owners on Thursday endorsed Mayor Vincent C. Gray’s proposal to extend alcohol sales by one hour, saying the extension would help them cater to new residents while boosting the city’s hospitality industry.

At a D.C. Council hearing on city alcohol laws, representatives from the nightlife industry said Gray’s plan to allow bars to serve alcohol until 3 a.m. on weekdays and 4 a.m. on weekends also would make city streets safer by staggering when patrons hit the streets near last call.

“We live in a city that doesn’t work 8 a.m. to 5 p.m.,” said Skip Colburn, executive director of the DC Nightlife Association. “People who work 8 a.m. to 5 p.m. can go out from 7 p.m. to 11 p.m., but many people in the military, many people in the corporate world, many people in government, cannot. We have a 24-hour city and a 24-hour world.”

But Council member Jim Graham (D-Ward 1), who oversees District alcohol issues, expressed numerous concerns with Gray’s proposal, which officials estimate would raise an estimated $5 million in the fiscal 2013 budget. Graham said he worried that an extra hour of drinking would extend the time “people are singing, car doors are slamming, and there is laughter and singing” in District neighborhoods.

Noting that alcohol sales in the Maryland and Virginia suburbs stop at 2 a.m., Graham said he also feared that the District would become a “magnet” for suburbanites.

“You’re right, it’s an urban environment,” Graham told several bar owners, including David Karim, the owner of Policy and Lost Society on 14th Street NW. “But I think it’s reasonable to expect it’s quiet, especially at 3 a.m.”

Gray (D) has pitched his plan as a way to enhance nightlife downtown, including at the Hamilton, a new 37,000-square-foot bar and restaurant that is open 24 hours a day.

On Monday, Police Chief Cathy L. Lanier endorsed the extended hours, saying it “won’t be any problem” for city police. A working group appointed by Graham to study alcohol issues said Thursday it had deadlocked in a 9 to 9 vote on whether to back the mayor’s proposal.

Fred Moosally, director of the Alcoholic Beverage Regulation Administration, testified Thursday that there are already 11 days this year when District bars are allowed to be open till 3 a.m. on nights before a federal holiday. Moosally said his agency is not taking a position on Gray’s proposal, but said his agents already work until 3 a.m. on weekdays and 4 a.m. on weekends.

“ABRA is in a position to implement the provision if it’s passed,” said Moosally, adding that he did not know of any spikes in noise complaints or violence on nights when bars are open later.

Council member Marion Barry (D-Ward 8) also told the committee he “strongly supports” Gray’s proposal, noting that hospitality services is the second-largest industry in the District behind government. “We should do all we can to let it grow. Let people have a good time,” said Barry, who said he would even support allowing the bars to stay open till dawn. “If people want to drink, they are going to drink.”

But the outcome of the debate could hinge on whether existing voluntary agreements between neighborhood associations and bars remain in place if the mayor’s proposal is approved.

Many of those agreements already stipulate that bars have to stop serving alcohol at midnight, 1 a.m. or 2 a.m. Graham questioned whether those agreements would automatically be extended under the mayor’s proposal.

On Tuesday, Gray suggested in an interview that he would be open to considering special areas, such as the K Street nightlife corridor or other industrial or commercial areas, where the extended hours could be tested away from residential areas.

Colburn said that bar owners probably would accept “a middle ground” solution.

D.C. Council Chairman Kwame R. Brown (D) said he plans to make sure Gray’s proposal “is fully vetted” before the council votes on the budget in late May. Graham said he would hold another hearing in a few weeks.