I feel your pain on not wanting to upset the owner and such… but the owner hasn’t SEEN the problems has he? Either way, you still have responsibility’s as the instructor…
Basically, if you can’t fix him NOW, and I mean NOW, you MUST get rid of him somehow… Let me put it this way… If I was one of your students, I would possibly leave because the above was going on. I would not stand by and watch that as a STUDENT. I would fix it, get it fixed or leave. That sounds harsh, but would you not? How about if you were a student and your sister wanted to train there? Would you recommend it?
Basically, as I understand it, your gym is not a safe and friendly place to train while he is there. Your gym MUST be that, that's your job to make it so. Sorry to be harsh, but I’ve been in bad gyms before. It’s my humble opinion you MUST take action based on the things you’ve listed…
Best of luck brother.