Restaurant groups setting extra places

If Chicago's dining scene feels a bit more crowded, that's because it is.

Each of the city's five major multithemed restaurant developers opened new spots in the past three months thanks in part to consumer demand and landlords clamoring for tenants with solid track records.

One Off Hospitality Ltd. kicked off the current expansion round in December with Italian-themed Nico Osteria. Hogsalt Hospitality followed with barbecue joint Green Street Smoked Meats on Feb. 4. Boka Restaurant Group LLC reopened new-American-cuisine Boka the same week Rockit Ranch Productions Inc. introduced Bottlefork, also a contemporary American restaurant. Lettuce Entertain You Enterprises Inc. ended the month with its revamped and renamed Paris Club Bistro & Bar.

“All the best (sites) with well-financed landlords are gravitating toward these guys,” says Timothy Rasmussen, an associate adviser at Sperry Van Ness LLC, a Chicago-based commercial real estate broker. “These (groups) are the trendsetters that other people are looking to for ideas.”

Nationally, the number of restaurants has expanded at an annual rate of less than 1 percent since 2008, according to NPD Group Inc., a Chicago-based consumer research firm. Last year, Chicago gained 0.7 percent more restaurants—that's 20,039 in all—mirroring the national trend.

According to industry analysts, it takes at least $1 million to open the kind of restaurant that privately owned One Off, Boka, Hogsalt and Lettuce Entertain You focus on; the companies are gearing up to open a total of at least 10 more places in the next 16 months.

HOGSALT HOSPITALITY

Brendan Sodikoff, 35, would like a slower expansion pace, but right now the CEO of Hogsalt Hospitality has a strategic reason for opening at least four new spots this year in the West Loop, Wicker Park and Gold Coast.

“There is a lot of growth happening right now in Chicago,” he says. “We're growing with it to position ourselves in specific areas over the next few decades.”

Hogsalt is the youngest among Chicago-based restaurant developers; it started in 2010 with Gilt Bar. Now Mr. Sodikoff has six restaurants and nearly 400 employees.

“He is certainly the blonde on the Navy base,” says Leslie Karr, senior managing director of commercial real estate firm Newmark Midwest Region LLC in Chicago. “I have restaurant spaces that I would sell a living relative to get him into.”

Mr. Sodikoff says a closer inspection will show that not everything glitters in Hogsalt's portfolio.

“I think we've had lots of failures,” he says, referencing Dillman's, which was forced to drop “Deli” from its name after customers expected a Jewish deli. Now he's converting half the space into an Italian spot.

ROCKIT RANCH PRODUCTIONS INC.

Rockit Ranch Productions' three co-founders had an expensive problem on their hands last year when an electrical fire closed their newest restaurant, Dragon Ranch Moonshine & BBQ, six months after opening. Before the group could get the River North spot open again, Lettuce Entertain You opened its own barbecue joint, Bub City, right next door.

Rockit Ranch turned to Michelin-starred chef Kevin Hickey for help. Mr. Hickey left his 18-year post at the Four Seasons Hotel Chicago to become a partner at Bottlefork, which opened last month in the Dragon Ranch spot. It marked the first time Rockit Ranch, which started in 2004 in River North, brought in an outsider to help develop a restaurant.

There's nothing in the works for the next two years, says Brad Young, 46, Rockit Ranch's chairman, but the company, which has six properties and 620 employees, is considering branching out to other cities.

ONE OFF HOSPITALITY GROUP LTD.

The group behind Nico Osteria and Blackbird, which has one Michelin star, will have its biggest growth this year, though most of the additions won't be restaurants.

The success of Publican Quality Meats, part sandwich shop and part butcher, forced One Off Hospitality to build an off-site bakery to better accommodate its bread needs and create more space for its in-house sausage production, says managing partner Donnie Madia, 56. Both operations are in the basement of Publican Quality Meats. Meanwhile, the company is building a bigger kitchen and a commissary next door to Big Star, its whiskey bar and taqueria hybrid in Wicker Park, to meet growing demand and to supply One Off's catering business.

“2014 is sort of a soul-searching year for us,” says Paul Kahan, 51, executive chef and partner.

A 40-seat Mexican spot next to Big Star is the only new restaurant planned for this year. Nico Osteria, in the Gold Coast, was named one of GQ magazine's “must dine” spots and is a semi-finalist for a James Beard Foundation Best New Restaurant award.