Jun 13, 2016
After years of being told by the city not to do it, Bring Your Own Bottle restaurants in Chicago can, in fact, charge customers a corkage fee, potentially opening up a new cost for diners.
WBEZ 91.5-FM reported Monday that for years the Department of Business Affairs and Consumer Protection had been enforcing a rule against BYOBs charging corkage fees without a liquor license — only to recently discover there was no such city ordinance.
“Unfortunately, we had it wrong on our website in a couple of places,” allowed Business Affairs spokeswoman Mika Stambaugh.
WBEZ reported that the city wasn’t issuing fines, but had been dissuading BYOBs without a liquor license from charging corkage fees.
On one level, the distinction between BYOBs and liquor-license restaurants made common sense. A high-end restaurant might allow a customer to bring in a specialty wine for a certain meal — but charge $50 or $75 for the privilege, and for the lost income on the restaurant’s own wine offerings. BYOBs that didn’t offer liquor had less to lose and less solid footing to stand on in staking a claim to corkage fees.
Now, in vowing to no longer enforce the non-existent ordinance, the city has suddenly thrown open the door to BYOBs charging a corkage fee — typically a nominal charge added for opening a bottle of wine or beer at the table, in an attempt to recoup some of the money lost in unsold drinks.
“It’s super-clear,” Stambaugh said. The law allows corkage fees at any BYOBs, without restrictions, so “there is no issue here.”
Aldermen have tended to agree, defending BYOBs against regulation under the idea that “if it ain’t broke, don’t fix it.” Two years ago, the City Council passed new restrictions on businesses like nail salons and barbershops that allow BYOB, but specifically exempted restaurants.
“I think it’s been working so far. People understand they can be charged to bring something into the premises,” said Ald. George Cardenas (12th) after a City Council committee meeting Tuesday. “I see it as a service to the patron. I would leave it as such. We tend to overregulate every little thing. I just don’t think it’s necessary.”
Others on the Council feel a little certainty is required.
“I think it needs to be clarified,” said Ald. Harry Osterman (48th), whose ward includes the popular Cookies and Carnitas, 5757 N. Broadway.
“BYOBs have helped communities,” Osterman added, and often serve as a stepping stone in new restaurants establishing themselves. “They start as BYOBs. They’re successful for a couple years, and then ultimately they’ll apply for their own liquor license,” he said — a course followed by Ethiopian Diamond, 6120 N. Broadway, to name just one.
The city should be “making sure the business entities know what the laws are,” Osterman said. “All they want is some certainty with city and state regulations.”
Ald. Ariel Reboyras (30th) agreed.
“I would think that the Council should take a vote on it and determine what exactly is behind it,” he said. “What is the law?”
Aldermen could find themselves taking on other BYOB issues as well. Ald. Tom Tunney (44th), owner of the Ann Sather restaurants, recently admitted on the Council floor he thought BYOBs were subject to having mandatory dram-shop insurance, only to be told by the Law Department that no such law exists.
While acknowledging some past confusion, Stambaugh pointed to stories showing corkage fees were granted as being legal and cheering restaurants that didn’t impose the fees. She was adamant that the current BYOB laws are sufficient and don’t need to be updated, but aldermen may decide otherwise in the weeks ahead, depending on how the sudden release of corkage fees plays out with diners and restaurateurs.
(H/T wbez.org)
Jun 7, 2016
After more than a year of design work, buildout and construction, one of Chicago’s hottest restaurant openings, has finally come to fruition.
SVN Restaurant Resource Group’s Jim Martin and Marcus Sullivan represented both Honey’s and the landlord at 1111 W Lake. The contemporary American restaurant concept was the brain child behind several industry veterans, including Virgil Abloh (Kanye West’s create director), who defines the restaurant as, “European elegance meets American swagger.”
Situated in Chicago’s booming West Loop / Fulton Market, the 100-seat restaurant is divided between a dining room and separate bar as well as a private dining room with its own bar that formerly resided in New York City’s The Harrison.
The space features stone flooring across a sleek lounge area, a custom bar taking up much of its east side. Guest must pass through to get to the more sophisticated dining area, which plays on the combo of leather and lace, with black leather booths and lace curtains. White tablecloths provide a nod to fine dining, while oak hitches filled with stemware and freshly cut flowers give a warm, almost “apartment-like” vibe to the interior.
The kitchen, helmed by executive chef and partner, Charles Welch, will rely heavily on a wood-fired hearth to cook rotisserie chickens, whole fish and assorted vegetables. A Limited drink menu, comprised of just five rotating beverages, is designed to allow the bartenders to focus on service.
Honey’s is open Monday through Saturday from 5 p.m. to midnight, with food served until 10 p.m. on Monday through Thursday and 11 p.m. on Friday and Saturday.
(H/T chicago.eater.com)
Jun 6, 2016
The president of Koval Distillery likes to think that each bottle of whiskey she makes is a Chicago flag of sorts, proudly made in the city and planted in thirsty locales all over the world.
“Distilled in Chicago” is printed on each label and is important to the brand. But Sonat Birnecker Hart fears the city’s review of its industrial corridors could make it tougher for craft beverage companies like hers to find the necessary room to grow in Chicago.
For the past four years, Ravenswood-based Koval has searched for a larger facility, but has struggled to find affordable manufacturing space in areas that also will draw enough tourists to pack a tasting room.
“We’re romantics. We want to stay in the city. But ultimately, we’re bursting at the seams and we’re going to have to do something,” Hart said.
Koval’s challenge is a familiar one among brewers and distillers, which have proliferated in Chicago in recent years even as traditional manufacturing has continued to decline. Those who run these companies say they bring needed jobs and tourism to the city. The trick is finding affordable manufacturing space that doesn’t conflict with neighbors, but is still close to hot neighborhoods and public transportation.
Planned manufacturing districts, encompassed by the very industrial corridors districts that are under review by the city, have been the answer for many. Since 1988 these zoning districts, which prohibit residential development, have provided breweries, distilleries and other companies room to expand without the challenges of fitting into a neighborhood full of homeowners. But depending on the outcome of the city’s review, some manufacturing districts could be changed to include other uses — and some might vanish altogether.
“It’s outlived its usefulness,” said Ald. Brian Hopkins, 2nd, of the Clybourn manufacturing district. “We need to be open to all possibilities.”
Hopkins, who represents the area that includes the Clybourn district, believes it’s time for that particular zoning district to be “decommissioned.”
The Goose Island brewery, which has been in the Clybourn district since 1988, would be protected if the zoning regulations were to change, Hopkins said.
Today, there are about 180 craft breweries in Illinois, about 80 of which are in Chicago, said Justin Maynard, executive director of the Illinois Craft Brewers Guild. Just four years ago, there were only about 20 craft breweries in the state with roughly half of them in the city.
Goose Island, now owned by Anheuser-Busch InBev, was Chicago’s first craft brewery.
At the time, Goose Island founder John Hall said he didn’t know much about the advantage of the planned manufacturing districts, or PMDs, but quickly came to realize their benefits. He was able to invest in the site without worrying about conflicts with residential developments popping up next door, he said. Goose Island even brewed a beer called PMD Mild, a nod to its industrial setting.
Still, Hall said it makes sense to evaluate whether the zoning districts could be better utilized.
“With today’s economic situation, it’s obvious the city needs more tax revenue. It’s time for a review, but you can understand the value of them,” said Hall, who’s no longer involved with the daily operation of Goose Island.
The North Branch corridor, to be followed by the Pilsen and Little Village corridors, is first on deck for the city’s review of its 26 industrial corridors, which encompass the 15 planned manufacturing districts. North Branch meetings begin next week; the meeting schedule is available on the city website.
Zoning changes will be initiated by property owners and developers and subject to City Council approval, said Peter Strazzabosco, deputy commissioner for the city Department of Planning and Development, in an email. The planning department will develop “framework plans” with potential land use changes based on each corridor’s “individual attributes, market trends and extensive community input,” he said.
“While an affordable location is a fundamental concern for virtually any business, there is no known shortage of available space for brewing and ancillary sales activities in any zoning district where they are permitted,” Strazzabosco said.
Breweries and distilleries conduct business in zoning districts other than the PMDs, Strazzabosco said. And one of the main objectives of the city’s review is to support investment in industrial areas, including for breweries and distilleries, while also addressing the needs of traditional manufacturers, he said.
Some say the city should have acted sooner to support industry. Steve DeBretto, executive director of the Industrial Council of Nearwest Chicago, said “piecemeal” zoning changes and general lack of support from City Hall in recent years have threatened the availability of manufacturing space.
“There’s been no uniform plan or message regarding PMDs. They’re starting to talk about it now, but the unfortunate reality on the ground is that it’s fueled (real estate) speculation, absent a comprehensive plan,” Debretto said.
The former Finkl steel plant site is central to the debate of whether manufacturing districts protect industry or inhibit needed change. When A. Finkl & Sons moved to a larger facility on the Far South Side in 2014, it left more than 20 acres in the North Branch industrial corridor ripe for redevelopment. A brownfield redevelopment plan for a 34-acre swath of land in the North Branch corridor, which included the Finkl site, included several possible scenarios for an “urban innovation district.”
According to the plan completed in December 2015, such a district could include research and development offices, tech offices, and a brewery and distillery, all while creating as many as 5,500 jobs.
But Mike Holzer, executive director of North Branch Works, the nonprofit community development corporation that commissioned the redevelopment plan, said city representatives told him in an April 1 meeting that they’d like to consider allowing other uses, including residential, in the North Branch corridor.
“It’s feeling like this is already a done deal. So we’re looking at getting what we need, as opposed to what we want. And what we need is to hold the line on residential and big-box retail and create the innovation district,” Holzer said.
Like Koval, many of the city’s largest and fastest-growing craft breweries consider Chicago to be crucial to their identities. Revolution Brewing’s portfolio includes beers like Fist City, marketed as a Chicago pale ale, and Rev Pils, a Chicago pilsner.
Josh Deth, founder of Revolution Brewing, said he didn’t seek out a planned manufacturing district for his recently expanded 90,000-square-foot brewery, but the building was affordable and available precisely because it was in the Kennedy district. And the brewery’s truck traffic isn’t bothering any neighbors, he said.
“It’s nice because you feel like it was intended for you and you belong there and you don’t have to fight with the neighbors,” Deth said.
In April 2014, Lagunitas Brewing Co. began production in its 300,000-square-foot brewery in the Douglas Park neighborhood — also in a planned manufacturing district.
Each week, “thousands” of people visit the brewery every week for tastings and tours, via trains and tour buses, bringing economic activity to neighboring Pilsen, said Lagunitas spokeswoman Karen Hamilton.
“I think anytime you have an area that’s struggling, the more people you can bring in, the better,” Hamilton said, speaking generally on the economic benefit of craft breweries.
Like Minds Brewing, a much smaller operation with a 10,000-square-foot brewery in the West Town neighborhood, is also within a planned manufacturing district, the increasingly bustling Kinzie corridor that extends west from the Loop.
Zach Houlahan, co-owner of Like Minds, which also has a brewery in Milwaukee, said he could see some benefit to allowing other zoning uses. Additional residences in the area would mean more people drinking Like Minds beer, which would support a taproom the brewery is planning to build, he said.
“We assumed with the proximity to public transit, the United Center and downtown, that this area would sooner or later pop off,” Houlahan said.
Of course, craft breweries and distilleries are but one small piece of a complicated puzzle. Larger market forces are work: High-end office, residential and retail developments are branching out from the Loop, compressing areas previously designated for manufacturing and other business uses.
Brian Ripp, a commercial real estate broker at Strauss Realty specializing in industrial property, said there are still plenty of properties zoned for manufacturing in Chicago that could work for breweries and distilleries. Planned manufacturing districts and their restricted zoning are antiquated, Ripp said, and “their day has come and gone.”
“The city can’t continue to support what’s become these industrial ghettos,” Ripp said.
For now, Koval’s still looking for its new home. Having outgrown its current Ravenswood facilities, Koval hopes a new location will include a 40,000-square-foot distillery and tasting room. Though Chicago’s distilleries are far fewer than its breweries, Hart believes the potential is there to capture tourism in the same spirit as the Kentucky Bourbon Trail, a Kentucky Distillers’ Association program that promotes the bourbon industry in Kentucky.
The planned manufacturing districts don’t have to be preserved exactly as they are, Hart said, but she hopes the city will find a way to preserve its long tradition of supporting industry for this new wave of craft beverage makers.
“Chicago is a manufacturing town. We make things. The City of Big Shoulders isn’t necessarily the city of laptops. And while that may be the future, a lot of towns make that their future. Chicago’s always been great because it has everything,” Hart said.
(H/T chicagotribune.com)
Jun 3, 2016
1. Oriole
It’s multicourse and pricey, but the food is divine—and you can wear jeans.
661 W. Walnut St., 312-877-5339
2. Duck Duck Goat
Admit it: You are intensely curious about goat fried rice.
857 W. Fulton Market, 312-902-3825
3. Roister
The Alinea Group goes casual. Still, for reservations, you know the drill.
CRITIC’S NOTES: The name, I’m told, has something to do with revelry. And despite the grim chefs in Andrew Brochu’s open kitchen, there’s more merriment around the room than at your average house party. —Jeff Ruby
951 W. Fulton Market
4. Imperial Lamian
This place ain’t cheap, but it ain’t in Chinatown, either.
6 W. Hubbard St., 312-595-9440
5. Smack Shack
Where grownups brag about wearing a bib to eat seafood.
CRITIC’S NOTES: This place is so Minnesota. The seafood is cleaned and cracked for you and set on very tidy silver trays so that the juices fall through and don’t touch your fingers. —Peter Gianopulos
326 N. Morgan St., 312-973-1336
6. SteakBar
Can a 9,000-square-foot nightcrawler sprawled over four levels feel intimate? Yes, says partner Matt Menna.
CRITIC’S NOTES: Opening night at this multi-level bar and anti-steakhouse summed up what to expect, when a server playfully warned a guest holding a Bloody Mary oyster shooter: “Careful, there’s vodka in there,” and the guest replied, “Good.” That was my favorite moment. —Maggie Hennessy
1500 N. Wells St., 773-966-0404
7. Americano 2211
Cliché be damned: This charming café transports you directly to Europe.
CRITIC’S NOTES: There are few times in life when I haven’t felt compelled to ask for more bread. Seeing Americano’s spicy, soppable shakshuka arrive alongside four fat griddled slices from the house loaf wasn’t one of ’em. —MH
2211 W. North Ave., 773-360-8757
8. Millie’s Supper Club
Think Northwoods of Wisconsin with relish trays, prime rib, and grasshopper cocktails.
CRITIC’S NOTES: Deep storefront done up to with moose heads and beer labels and such. Beautiful long bar and plenty of people are hanging out. Check your rifle and hunting hat at the door. —Penny Pollack
2438 N. Lincoln Ave., 773-857-2000
9. Artango Steakhouse
“Dip” here could mean chimichurri sauce or a tango lesson.
4767 N. Lincoln Ave., 872-208-7441
(H/T chicagomag.com)
May 27, 2016
What’s my business worth? It’s a question any restaurant owner asks—and why not? Everyone wants to know how much his or her home is worth, right?
Unlike real estate, a business is worth the income it generates multiplied by a factor of usually two to three times the income.
Two parts determine the value of a business: income and multiple.
Income: In small business, the important number is working owner cash flow, sometimes called seller’s discretionary cash flow (SDCF). In a nutshell, this is the amount of money a working owner puts in his pocket before paying himself a dime.
A tax return with a detailed profit statement next to it is the best source for this number. A good accountant ought to be able to identify the “add-backs” to obtain the true SDCF.
Multiple: Determining this number requires thought and involves some subjectivity. But there is a science behind deriving a solid multiple.
In small business, the multiples range from 1 to 3. Five factors affect the multiple. Scoring each factor between 1 and 6 gives one a rational multiple that’s defendable.
1. Lease and location: The longer the lease, the higher the score. The higher the rent in terms of percentage of sales, the lower the factor. The stronger the location the higher the factor. Long lease with rent factor in the 6% range, score it a 6.
2. Condition of facility and equipment: The better the condition the higher the factor. A restaurant in great condition gets a 6.
3. Revenue growth: Flat revenue growth scores a 3, while declining scores a 1. Revenue increasing year-over-year at a good growth rate of 10 percent or more scores a 6.
4. Cost management: If the restaurant is keeping its costs in line with industry standards year after year, give it a 6. If costs are significantly higher, give it a 1.
5. Regional risks and desirability: This factor tends to fluctuate around the nation. Rural areas tend to get lower scores, while larger popular metro areas get higher numbers. California tends to have the highest factors in the nation, driving multiples closer to 3 on most of the business sales. For example, in Phoenix the summer variability creates greater risks for the restaurant owner, lowering the multiple, while in California the great weather causes less variability in sales.
Add the results of the factors together and divide this result by 6. The box below shows what multiple should be used:
For example, if the SDCF is $100,000 and the factor is 3.0, it derives a multiple of between 1.51 and 2.0; hence, then the value is about $150,000.
Each restaurant’s value is unique and a professional should do a proper valuation analysis, analyzing each of these factors to determine what your restaurant is worth.
(H/T restaurant-hospitality.com)
