The developers of the InterContinental Chicago O’Hare won a victory in court with a judge’s recent ruling that clears the way for a Wildfire restaurant to open in the new hotel.
The owner of the Capital Grille restaurant, RARE Hospitality Management Inc., sued the developers in October and sought a preliminary injunction to stop Wildfire from opening.
Capital Grille, which opened earlier this month just outside the hotel, claims in its lawsuit that the developers’ deal with Wildfire violates a provision in its lease that bars other “high-end steakhouse themed” restaurants from the project.
Cook County Circuit Court Judge Rita Novak on Feb. 13 denied the preliminary injunction, in part because she found the provision — which singled out a number of restaurants, but not Wildfire — too vague to be enforced in this case.
“The order was significant because it allows the restaurant to open,” says Donald Tarkington, a partner with Chicago law firm Novack & Macey LLP, who is representing the developers in the matter. “It was a decision that’s likely to be upheld on a permanent basis.”
A ruling that stopped Wildfire from opening could have been a lethal blow to the hotel, according to a response to the lawsuit filed by the developers, a joint venture of Harp Group Inc. and Mid-America Development Partners LLC.
The response, filed Dec. 23, discloses that InterContinental declared the two Oak Brook developers in breach of its franchise agreement due to the lack of a restaurant in the 12-story, 556-room hotel that opened in September.
A preliminary injunction to stop Wildfire “could result in the hotel losing access to the InterContinental name, on-line reservations and other benefits conferred under the franchise agreement,” the Dec. 23 court filing says. “Such an outcome could undermine the entire $183-million development.”
InterContintenal has given the developers an extension that should be sufficient, as Wildfire, which is part of Chicago-based Lettuce Entertain You Enterprises, is slated to open around May or June, says Peter Dumon, president of Harp Group.
A spokesman for the Orlando, Fla.-based Capital Grille chain, which is part of Darden Restaurants Inc., says the firm is mulling its next move.
“The situation is still active,” says the spokesman. “We are currently evaluating our options on where we go from here.”
Messrs. Dumon and Tarkington say they have had no talks with Capital Grille executives or their attorneys since the ruling.
The lawsuit came about after Harp and Mid-America brought in Wildfire to replace an Italian restaurant originally slated for the site, Osteria di Tramonto.
It was to be a second restaurant co-owned by the developers and Chicago chef Rick Tramonto, who opened a first site in a new Harp/Mid-America Westin hotel in Wheeling. But the venture Mr. Tramonto formed with the developers in 2007 to own mixed-used properties, Crescendo Cos., was dissolved last year as development opportunities slowed.
Messrs. Dumon and Bossy have been struggling with sites they owned or controlled and now can’t get projects started. Last month the developers managed to get a foreclosure lawsuit dismissed on a Des Plaines site where they had been working to develop two hotels.
Related story: Bossy, Dumon settle bank’s foreclosure suit
Because of a lack of offers, the developers recently pulled from the market four outlot sites just outside the Westin in Wheeling, where tenants include a Claim Jumper and Cooper’s Hawk restaurants. The developers are still marketing the McCormick & Schmick’s site in Rosemont, the third restaurant at the InterContinental project, though Mr. Dumon isn’t optimistic about the chances of a sale.
“Realistically, nothing is trading anywhere,” says Mr. Dumon.
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