A year before the pandemic hit, Chicago developer R2 announced a partnership with Hogsalt Hospitality, owners of Au Cheval, Bavette's and other Chicago restaurants. They planned to develop a 3.5-acre shipyard site on Goose Island, open a restaurant and bar and create dining opportunities off the Chicago River. In 2019, Hogsalt founder Brendan Sodikoff told Eater that it was “the most exciting project I've ever had the pleasure of working on.”
Five years later, those plans never materialized — near the former home of Kendall College along Halsted. On Monday, Crain's Report broke the news — R2 and Hogsalt have broken up. Last year, the development company sold the northwest portion of the project site to car dealer Joe Perello for $4.8 million.
Sodikoff told Eater he loved the project but they faced zoning challenges that prevented permits for outdoor dining, a key component of the project: “We worked with the city for a few years but didn't find any traction and everything stopped during Covid,” Sodikoff texts. .
Goose Island is one of 15 areas in Chicago established as a Planned Industrial District, or PMD. PMDs were created in the 1980s to protect blue-collar manufacturing jobs. The Chicago City Council made exceptions within PMDs for outdoor dining during the pandemic to help restaurants survive when the policy suspended indoor dining.
Contrary to what Sodikoff claimed, a representative from the city of Chicago pointed to a zoning change made in October 2021 to four PMDs, including Goose Island. This has lifted entertainment restrictions and will allow outdoor dining.
Sodikov did not point to a single moment when the collaboration with R2 faltered. “Projects stumble without progress,” he adds, writing that he has not actively worked on the Goose Island project in years.
R2 has had a successful partnership in building the Salt Shed, the music venue near Division Street and Elston Avenue. Goose Island Beer Co. will open. Next month is a new brewpub in the Salt Shed, a relocation of its original Clybourn brewery. However, PMDs in the region remained intact.
The hope was that the new development could turn Goose Island into more of an entertainment district, but instead, Crain's reports, developers will look at creating industrial, warehouse and office space that could house photography studios, fitness centers or retailers that need on-site storage. Or production space
Sodikoff says the project's demise is not a referendum on the city's restaurants: “Dining in Chicago is very strong,” he says. “This city loves to win and dine.”
He adds that restaurants face challenges including rising construction costs, rent increases to accommodate those increases, and policy changes. His current priority is to focus on reinvesting in existing restaurants and spending more time with his teams, but he also says he wants to continue investing in the city when opportunities arise.
“This does not mean there is no new development, but it certainly pushes the risks to an uncomfortable level,” Sodikoff adds. “Many great entrepreneurs are developing the majority of their new businesses in other states.”
Updated April 11, 2024, with context on zoning changes that would allow outdoor dining.
