Hogsalt and Developer R2 Nix Goose Island Entertainment Complex

A year before the pandemic, Chicago developer R2 announced a partnership with Hogsalt Hospitality, the owners of Au Cheval, Bavette’s, and other Chicago restaurants. They planned to develop a 3.5-acre boatyard site on Goose Island, opening a restaurant and bar and creating dining opportunities off the Chicago River. Back in 2019, Hogsalt founder Brendan Sodikoff told Eater that it was “the most exciting project I’ve had the pleasure to work on.”

Five years later, those plans — next near Kendall College’s former home along Halsted — have never materialized. On Monday, a Crain’s report made the news public — R2 and Hogsalt have broken up. Last year, the development firm sold the northwest portion of the project site to car dealer Joe Perillo for $4.8 million.

Sodikoff tells Eater that he loved the project but they ran into challenges with zoning that prevented permits for outdoor dining, a key component of the project: “We worked with the city for a few years but never found traction and it all ground to a halt during COVID,” Sodikoff texts.

Goose Island is one of 15 areas in Chicago established as a planned manufacturing district, or PMD. PMDs were created in the ‘80s to protect blue-collar manufacturing jobs. Chicago’s city council made exceptions within PMDs for outdoor dining during the pandemic to help restaurants survive when policy suspended indoor dining.

Contrary to what Sodikoff claimed, a rep from the city of Chicago pointed out a change in zoning made in October 2021 to four PMDs, including Goose Island’s. This lifted entertainment restrictions and would allow for outdoor dining.

Sodikoff didn’t point to a single moment when the collaboration with R2 snarled, “projects fizzle without progress,” he adds, writing that he hasn’t actively worked on the Goose Island project for years.

R2 has found success partnering on the construction of the Salt Shed, the music venue near Division Street and Elston Avenue. Goose Island Beer Co. will next month open a new brewpub at the Salt Shed, a relocation of its original Clybourn brewery. However, the area’s PMD zoning has remained intact.

The hope was new development could turn Goose Island into more of an entertainment district, but instead, Crain’s reports developers will look into creating industrial, warehouse, and office spaces that could house photography studios, fitness centers, or retailers that need on-site storage or space for production.

Sodikoff says the project’s demise isn’t a referendum on the city’s restaurants: “Chicago dining is very strong,” he texts. “This city loves to wine and dine.”

He adds that restaurants do face challenges including rising construction costs, increasing rents to accommodate those spikes, and policy changes. His present priority is to focus on reinvesting in existing restaurants and spending more time with his teams, but he also says he’d like to continue to invest in the city when opportunities present themselves.

“It doesn’t mean no new development but it certainly pushes the risk to an uncomfortable level,” Sodikoff adds. “Many wonderful entrepreneurs are developing the majority of their new business in other states.”

Updated April 11, 2024, with context about zoning changes that would allow outdoor dining.