City leaders are oblivious to the fact Chicago’s restaurant industry is on the brink of collapse, endangering the city’s economy, revenues, and character
Think back to the last time you were seated at a restaurant in Chicago. Perhaps it was a first date, nervously sharing pasta at a cozy Italian spot in Bridgeport. Maybe it was Grandpa’s 80th birthday, family raising a glass. Possibly it was the night you finally closed that business deal — or when life had set you back and friends reminded you how much you matter. The warmth of a familiar waiter who knows your name — these are the ties that root us in community. Restaurants are more than haute cuisine and craft cocktails.
Restaurants are part of the stages of our lives, the backdrop of our best memories. They are part of Chicago’s soul. This soul, however, is now facing a grave threat. Chicago is home to over 9,000 restaurants employing over 150,000. Together, they generate at least $10 billion in annual sales and fuel tax revenue that supports city services, schools, and transit. Restaurants are not a side dish to Chicago’s economy — they are part of its centerpiece. Yet too many have shuttered, and countless others are struggling to survive.
The perfect storm
First came the pandemic. Chicago’s COVID-19 shutdowns dragged on for over 15 months — among the longest in the nation. Diners endured contradictory rules — masks on when standing, off when sitting — that conditioned many to stay home. At one point, officials even encouraged the absurd idea of plastic igloos on frozen streets, a symbol of policy divorced from reality. Then came soaring costs: Beef, bacon, eggs, cheese, vegetables — all climbing fast. Just as the industry staggered back, wage mandates piled on, with no carveouts for small operators already gasping for air. Instead of relief, Chicago delivered more pressure.
Demand destruction
The collapse of demand has been brutal. Public safety concerns keep suburban families and tourists away. The central business district has hollowed out — office vacancy tops 26 percent of inventory in 2025, with Class B and aging stock especially empty. Office absorption is deeply negative: In Q2 2025, over 1.3 million square feet more space was vacated than leased. Fewer workers downtown mean fewer lunches — and fewer expense-account dinners that once drove margins.
Business travel has slumped too. Michigan Avenue — the Magnificent Mile — is scarred with vacancies. Retail vacancy on the city’s high street stands at 31 percent, with Loop storefronts near one in three. These are generationally record-breaking rates, draining the restaurants that relied on foot traffic.
When office towers and retail lose value, property tax burdens shift to residents. Families paying more at home have less left to dine out. Every link in the chain drags restaurants further under.
More unfunded mandates added to a confiscatory tax structure
Ending the tipped wage has compounded the crisis. No one disputes restaurant employees are unflagging workers and deserve equitable compensation — they do. Nonetheless, the sudden jump in costs has been catastrophic for Chicago's operators. Within a year, the Employment Policies Institute reported 5,200 jobs lost and 100 restaurant closures. Closures are accelerating, and independent restaurants are suffering most.
Aggravating matters, Chicago’s restaurants are overtaxed and under-supported.
Consider a meal in Chicago carries an effective tax of 11.75 percent:
- 6.25 percent — State of Illinois
- 1.75 percent — Cook County
- 1.25 percent — City of Chicago
- 1 percent — Regional Transit Authority
- 0.50 percent — Chicago “Restaurant Tax”
- 1 percent — Metropolitan Pier & Exposition Authority
In sum, restaurants hand over $1 billion in sales related taxes annually, based on $10 billion in sales citywide. In many instances, government takes more than owners themselves. How long will that revenue flow if the businesses generating it drown?
The commercial property tax burden
Added to the sales related taxes is the property tax, which is another silent killer. In Cook County, commercial property is assessed at more than double the rate of residential property. A restaurant property pays more than twice what a residential condominium owner of equal value does. With property taxes heavily supporting local school funding, and restaurant properties sending no kids to schools, this is yet a further windfall for government and local schools.
A call to action
If government is going to lean so heavily on restaurants, it owes them a path to survival. A real task force — with actual operators, not just bureaucrats — should drive reforms. Any attempt to reform should include:
- Labor flexibility: Phase in wage increases with targeted tax credits to offset costs for restaurant owners. Workers deserve fair pay, but restaurants need a way to stay solvent. With $1 billion in annual restaurant tax revenue, government can look after restaurant owners and make sure hard working workers get fair pay.
- Public safety: Restore a strong police presence downtown and expand CPD’s transit unit. Diners need to feel safe coming back.
- Nuisance ordinance: Enforce laws and add heavy financial penalties against property damage, trespassing, and harassment of workers and first responders.
- Office revival: Remote-only work is draining the city’s core. Employees must be incentivized to return to work. Offices are ecosystems of commerce. Without them, restaurants wither.
- Schools as partners: With 315,000 students in 635 CPS schools, the city should contract with local restaurants to provide meals. Students get better food; restaurants get a vital sales channel.
- Disaster relief capacity: Create a small-business “Emergency Relief Authority”, a local version of FEMA, funded by TIF surpluses, empowered to abate taxes, coordinate insurance, and stabilize businesses during crises
Chicago restaurants are a prized possession. They must not be allowed to fade
When a restaurant closes, we lose more than a business. As the grandson of Greek immigrants, I grew up in the restaurant business. Morning conversations around the counter helped me overcome a stutter, taught me to listen, respect other viewpoints, and believe in dialogue. I saw dishwashers become cooks, cooks become owners, and children of immigrants go to college and grow into professionals.
Restaurants are gathering places. The give people their start. They give a city its spirit. Chicago cannot afford to lose them — not now, not ever.
