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Chicago faces wage, menu, tax issues as city welcomes NRA confab

CHICAGO National Restaurant Association show to town this week, operators here were upbeat about its robust restaurant market despite concerns that several emerging business challenges could affect the local hospitality industry. —As this city welcomed the

A new Cook County sales tax scheduled to go into effect July 1 will bring the tax on restaurant meals to 11.5 percent in the downtown area, the highest of any major U.S. city. —As this city welcomed the

Some operators fear the tax, which includes a 1.25-percent levy to support the McCormick Place convention complex, could eventually scare away meeting business and keep increasingly budget-conscious consumers from dining out as often. —As this city welcomed the

“Long-term, it could hurt Chicago, especially conventions,” said Grant DePorter, chief executive of HC Restaurant Group, operator of the Harry Caray’s restaurants. —As this city welcomed the

“It’s a big negative for the restaurant industry and other businesses,” said Jay Stieber of Chicago-based Lettuce Entertain You Enterprises, who heads the Illinois Restaurant Association’s government affairs committee. —As this city welcomed the

In addition to the county tax, Stieber and other IRA officials are monitoring a state proposal, which has passed the House, to eliminate the training wage for teenage workers, currently 50 cents an hour below the minimum wage. If that measure passes, restaurateurs are less likely to hire teens because of the greater amount of training they require, Stieber said. —As this city welcomed the

The IRA also opposes a Chicago calorie-labeling ordinance, first introduced early last year, that is pending in the City Council’s health committee. That proposal, similar to the one in effect in New York, would apply to local branches of chains that have at least 15 outlets nationwide. —As this city welcomed the

Meanwhile, two Chicago ordinances favored by the IRA are pending in the City Council that would repeal the local ban on sales of foiegras, but no immediate council action was expected. —As this city welcomed the

The four-month-old statewide workplace smoking ban apparently has not adversely affected restaurant business in the city, despite concerns that it would. —As this city welcomed the

Smokers are honoring the ban, including a provision that extends the ban to outdoor smoking within 15 feet of building entrances, said John Colletti, controller of the six-unit Gibsons Steakhouse group. —As this city welcomed the

Although Gibsons initially was opposed to the ban, its restaurants have not lost any business from smoker defection, Colletti said. —As this city welcomed the

“We had a great first quarter,” he said. “I see a lot of people smoking outside. We are still selling cigars, but I don’t know where they smoke them.” —As this city welcomed the

While rapturous about Chicago’s generally booming restaurant and hospitality economy, Jerry Roper, president and chief executive of the Chicagoland Chamber of Commerce, sees one downside associated with the growing number of local restaurants: a possible labor shortage. —As this city welcomed the

The sparsity of workers, partially related to the unresolved issue of immigration reform, “could become a major concern” in Chicago, he warned. —As this city welcomed the

Still, he said, “we are viewed as a strong marketplace for restaurants, plus a strong convention town and corporate marketplace that gives restaurants an edge that secondary cities do not have.” —As this city welcomed the

Indeed, Chicago is enjoying a growing reputation for having world-class dining and economic prosperity, along with growth in downtown-area residents, hotels and out-of-town visitors. —As this city welcomed the

Visitations mushroomed to 44.2 million in 2006, the most recent year tallied, from 40.2 million in 2005, said Meghan Risch, spokeswoman for the Chicago Convention & Tourism Bureau. —As this city welcomed the

International business and leisure travelers are increasing, with more than 1 million visiting in 2006 and that number rising in 2007, though those figures have not been tallied officially yet, she said. —As this city welcomed the

The local hotel room inventory is projected to grow by 3,000 by the end of 2009, for a total of 30,000 rooms within five miles of McCormick Place. However, some hotel projects have been delayed by troubles in securing financing, Risch said. —As this city welcomed the

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