In the balmy summer days of his adolescence, Chicago restaurant designer/owner Jerry Kleiner and his sports-minded pals from Sullivan High School would hang out at the schoolyard or Far North Side parks, shooting hoops, whacking a baseball or running a very lucrative hustle.
The idea was to get someone to bet that Kleiner, a compact immigrant from Eastern Europe, couldn’t hop on one foot faster than the other guy could run.
“I’d kind of set it up for Jerry,” recalls Donald Hirsch, a boyhood chum who now owns a chain of tanning salons. “I’d encourage the other guy: I’d say, ‘He can’t hop faster than you can run. You’re fast, you’ll kill him.”
The stakes were hardly chump change for kids in those days, the early 1970s. “We bet for $20, $50; one kid bet for $100,” Hirsch remembers.
“Jerry would get a running start, and he was like a kangaroo . . . No one ever finished the race against him. They’d see he was so far ahead and they’d stop,” he says. “We’d take these guys’ money all day long.”
Kleiner, when told of the recollection, laughs a bit sheepishly. “We were all hustling, gambling, playing cards, that’s what kids did then,” he says. “I was just a little better at it.”
He recalls that once he even outpaced a greyhound named Hawkeye. “One guy was holding the dog at the end of a football field, and I had a 30-yard spot,” he says.
At 48, Kleiner remains a tanned, athletic charmer who’s brimming with innovative design and development ideas -and who is slowed not a bit when a business partnership bites the dust. While others his age may be coasting, he’s kicking it up a notch, moving at a pace that is catching the eye of dealmakers in the real estate, restaurant and hotel businesses.
Though Kleiner is a much smaller operator than someone like Lettuce Entertain You’s Rich Melman, investors admire his ability to see beauty and economic potential where others see urban ugliness and decay, to turn a dreary or antiquated cityscape into an emerging hot spot that can trigger redevelopment of an entire neighborhood.
“Jerry is a visionary,” says former State Sen. Bill Marovitz, a partner in one of Kleiner’s deals. “There are very few people I’d say that about. Jerry sees everything as a work of art; he visualizes things.”
Kleiner is sprinting into new projects with barely a glance back at his disintegrating partnership with attorney Howard Davis, his alter ego on a remarkable 12-year run. The pair, together with a third partner with whom they split earlier, blazed an imaginative path through a moribund West Loop beginning in the early ’90s, opening three stylish restaurants in the West Randolph Street wholesale market area: Vivo, Marche and Red Light.
The Kleiner-Davis team went on to bring some panache to the reviving South Loop with three more restaurants: Gioco, a cozy northern Italian spot in what is said to be a former speakeasy; Opera, a sexy, high-drama Asian place in a former film warehouse; and, most recently, Saiko, an edgy Japanese steakhouse. Five of the restaurants-Vivo is now owned by a former partner-do close to $20 million a year in sales.
Like a circus performer, Kleiner is racing to keep several new plates spinning at once.
Projects in the works include a massive Nuevo Latino restaurant in the old Pick Fisheries building on West Fulton Street overlooking the Kennedy Expressway; a restaurant/lounge in a former meat-storage facility at 311 N. Sangamon St., in the heart the Fulton market area; an artsy retail/event space in the city’s oldest standing electrical powerhouse at 19 E. 21st St.; a moderately priced American grill/bar in a ho-hum corner of Hyde Park, at 5201 S. Harper; and an Asian-themed restaurant in a redeveloping loft district in St. Louis.
Meanwhile, he’s involved in efforts to transform an 1887 meat market building on Fulton into a high-end retail mini-mall, and he’s in early discussions about creating a boutique hotel in the Fulton area, which he envisions as evolving into something like New York’s trendy meatpacking district.
As if all that weren’t enough, he’s toying with the idea of bringing an affordable restaurant to an impoverished Chicago neighborhood, and maybe taking his restaurant visions to New York City and suburban Detroit.
“I never had this much on my plate before, but I’ve figured out a way to work smarter,” says Kleiner, who shuns computers and desk work in favor of doing business by cell phone as he tools from job site to job site in his black Mercedes-Benz SUV.
While juggling so many projects at once would exhaust most people, friends say Kleiner takes it all in stride. “He’s enjoying life,” says Michael Kornick, owner/chef of mk in River North. “His kids [from a short-lived marriage] are at an age where he can travel with them, do a lot with them.”
Kleiner says he and son Maxx, 10, and daughter Alaia, 8 “are always moving-playing, swimming, movies. It’s always something.”
Kleiner’s secret to sanity, he says, is to select partners with strong experience in running specific businesses, so that he can serve as the concept guy, the designer. “The piece I like is the initial creation and setup-not to sit and be a manager in a restaurant,” says Kleiner, a self-taught designer who likens his work to painting pictures.
Whether he can keep all these plates spinning at once is an open question. Though he’s a tough player in the bare-knuckles business of restaurants and commercial real estate, he has known failure, especially in the early years of his career. But the consensus is that he will remain in the vanguard of real-estate entrepreneurs, finding and developing the next hot spots in Chicago and elsewhere.
“He always has a second or third deal going in case one or two don’t work out,” says Kornick, formerly a minority partner in Marche and Red Light.
Another former associate, who’s not a big Kleiner fan, observes: “Jerry’s one of those nine-lives guys. He always lands on his feet.”
IT’S A SUN-DRENCHED June day, and Kleiner is driving through the South Side past auto-repair shops and hot dog stands, sagging frame houses and bruised three-story walk-ups. He talks about his life between stops every few minutes to take cell-phone calls from contractors, project partners and personnel scouts.
His voice has a gravelly edge to it, and his look is Prada casual, with a form-fitting black-knit T-shirt and navy calf-length shorts. His gaze moves back and forth across the windshield, not only watching the traffic, but looking for “blank canvases,” as he calls them.
“I may drive by a particular building 100 times, and it may not be until the 110th time that I’ll say: ‘Wow, I could do something in this building. Here’s my canvas.'” He estimates he logs 100 miles a day around the city. “People ask me, ‘How do you find these areas? Do you do polls? Do you do traffic counts?’ But it’s all gut to me.”
He pulls into a parking spot at the Mexican Inn, a taco spot at 95th and South Ewing streets, a “find” made by his girlfriend of five years, Marisa Molinaro, who grew up in the neighborhood.
As he nibbles on a beef taco with side salad, he talks about his early years in Chicago.
His family left Russia when he was 2. After spending a few years in Poland, they arrived in Chicago on July 4, 1963. Kleiner struggled through public grammar school (“I was 7 years old . . . I didn’t know a lick of English”) and says he barely made it through Sullivan.
He went on to study at the Ray Vogue School of Design, thinking he’d learn how to design and make clothing, a goal not too far removed from the career path of his father, Morry, a Holocaust survivor who supported his family by working long hours as a tailor.
The stint at Ray Vogue (now the Illinois Institute of Design) was a “terrible waste,” Kleiner recalls, except for a referral to a sales job at Bonwit Teller. “That was an eye-opening store,” he says.
“One day I’m in there, and this guy comes to the table in one of these old suits, and he’s picking out ties,” Kleiner recalls. “He picked out 20, 25, 30 ties, and maybe they were $75 apiece . . . and this was 30 years ago. The guy looked like a janitor.
“He says, ‘Charge it to 666 Lake Shore Drive, the Wirtz Corp., Chicago Blackhawks,’ ” Kleiner recalls. “I say, ‘What do you do? Do you work there?’
“And he says, ‘No, they work for me.’
“Remember Arthur Wirtz?” Kleiner says. “That was him.”
“I met all these people at Bonwit Teller, just everybody, celebrities,” he said. “And it was the fascination [with] . . . who the hell these people were. How do I get connected with this money crowd of Chicago?”
The answer, for Kleiner, emerged from his ability to see beauty where others see urban ugliness and to channel those visions into money-making enterprises.
At 19 E. 21st St., for instance, he saw promise in a dilapidated two-story hulk of a building, smack against the elevated CTA tracks, that housed an auto-repair shop. The building was the former Chicago Illuminating Co. Powerhouse, built in 1892 to provide electricity to the exclusive Prairie Avenue residential district as well as the saloons and bordellos of the Levee district.
“Jerry took me to see that building when it was a total wreck,” recalls Tim Samuelson, cultural historian with the Chicago Department of Cultural Affairs. “He was able to see through to the beauty and great spaces of the interior.”
The rear of the building is being transformed into a gallery/lounge/event space and a portion of the upstairs into offices for his new endeavors. Space on the first floor already has been rented out by Revival, a shop that sells architectural artifacts.
KLEINER LIVES IN a stunning home he converted from a Near West Side trucking garage, where he throws lively parties for the sort of powerbrokers who awed him in his youth. But getting to this point has been a journey full of twists and turns, and he has left a number of unhappy partners and investors in the dust.
His biggest blowout-he would say his only real setback-came after he jumped into the real estate market in the 1980s, acquiring several Near West Side properties to renovate into condominiums.
To finance the projects, he brought in investors and took out bank loans, including some from Cosmopolitan National Bank, which failed in 1991. Kleiner says he chose the bank because it was close to one of his projects, and was unaware of problems at Cosmopolitan, whose chairman later pleaded guilty to federal fraud charges.
In 1988, Kleiner led a group of 17 investors who opened Cairo, an ultrahip nightclub at 720 N. Wells St., in the heart of the River North gallery scene.
By the end of the decade, his fledgling empire had collapsed under the weight of higher-than-expected development costs, a huge debt load, in-fighting among partners and what some partners alleged was mismanagement. The residential properties were lost in foreclosure, the nightclub sold at a loss.
“I had some lawsuits, people were chasing me for payments,” recalls Kleiner, who says his failings stemmed from inexperience. He says he settled with irate investors and avoided bankruptcy court. “I was devastated for a long time,” he says. “I was like a boxer knocked out.”
Even today, loose ends from the failed ventures remain. Jordan Mozer, a designer of restaurants, hotels and retail projects, says Kleiner still hasn’t paid a final bill, for $9,970, for design work on Cairo, despite a court order to do so.
Working on Cairo “wasn’t a bad experience-Jerry is very charming-but I was pretty frustrated,” he says, adding that Kleiner “wasn’t good at giving us credit for the design work we’d done.”
Asked about the money Mozer thought was due, Kleiner says, “I felt there were some excess charges . . . he was paid handsomely.”
Kleiner’s fortunes changed for the better in 1990, when he hooked up with two investors-Sam Madonia, formerly his loan officer at Cosmopolitan, and Barry Paddor, who was involved in a family clothing-store business-to open another, bigger nightclub, Shelter.
The maze-like club in a former Fulton market warehouse was red-hot, attracting such celebrities as Madonna and Michael Jordan during its eight-year run. And it was at Shelter that Kleiner got to be friendly with a customer named Howard Davis, who over the course of a 12-year partnership would fill the role of the legal/financial player in the wings while Kleiner twirled on center stage.
The connection led first to the 1991 birth of Vivo, a West Randolph restaurant Kleiner named for Frank Vivo, an Italian furniture upholsterer. Vivo had tutored Kleiner as he developed into a restaurant designer whose one-of-a-kind emporiums are rich with jewel-toned, velvet drapes and swags, wildly dramatic lighting shades, twisting metalwork in the chairs and sweeping staircases, elaborate mosaic tileworks and evocative street-chic murals.
“I like to create a ‘Wow!’ factor,” says Kleiner, who owns a separate design firm that makes many of the furnishings for his projects.
Kleiner’s design abilities often get rave reviews, but some of the praise is qualified. “He’s a fairly creative guy,” says Doug Zeif, who operated Clubhouse, a Kleiner-designed restaurant in Oak Brook. “But in our industry, like in the hotel business, people steal from each other all the time. So if people looked at Jerry’s early designs, they see some Jordan Mozer-esque knockoffs. And Jerry travels, he’s worldly, and he sees things he loves and incorporates them.”
Kleiner, who says he takes inspiration from the Renaissance and from master artists of the past, sloughs off the criticism: “If you look at the pattern over the years, these are one-of-a-kind pieces or places, nothing like it exists . . . People say, ‘He didn’t go to school, how come he gets all the attention?’ I’m a guy off the street, off the boat, and I pick up my own way of learning.”
KLEINER SAYS THAT he was first drawn to the West Randolph Street area by its rawness. “It was rough. Artsy people lived there, but it was a rundown area, with a lot of Skid Row types and prostitutes all walking around,” he recalls. “It felt sort of charming, with the city backdrop. It was kind of a cool look.”
The rest, as they say, is history-a series of trendy restaurants with staying power, thanks to their innovative design and talented chefs, among them Paul Wildermuth, Corcoran O’Connor and Jackie Chen.
Besides their appeal to diners, the restaurants have been catalysts for neighborhood development. “He went into a quasi-industrial and under-utilized area, and now it has become residential and increasingly retail,” says Michael Tobin, managing principal of Northern Realty Group Ltd., speaking of Kleiner’s move onto West Randolph.
“This guy paved the way for an incredible boom in real estate,” agrees chef Kornick. “All the Greek guys with places along Halsted Street should send Jerry a check each month, and the same in the South Loop.”
The South Loop is where Kleiner opened Gioco, credited by Bonnie Sanchez-Carlson, president and executive director of the Near South Planning Board, with pioneering the neighborhood’s renaissance. “He took a chance in an area where we had tried to get retail. There had been questions about whether the current population would be able to support restaurants and other retail, and he was willing to take a chance.”
His restaurants, she says, have acted as catalysts for development in the area, which is now dotted with towering construction booms at high-rise projects. “The residential redevelopment couldn’t have continued without other services,” she says.
Not all of Kleiner’s ventures have gone so smoothly, however.
In 1999, he and Davis officially broke ties with their third partner, Dan Krasny, a former stockbroker who was brought in to run day-to-day operations at Vivo, and later Marche. In a settlement that capped a long-running feud and bitter lawsuit, Krasny took control of Vivo in exchange for his shares in Marche and Red Light-an agreement that broke up ownership of the cluster of restaurants at Randolph and Green streets.
In his suit, Krasny alleged that Kleiner had breached his fiduciary responsibilities by turning attention to new ventures, including one called The Clubhouse-and that Kleiner and Davis overcharged for goods and services they provided Vivo and Marche and wrongfully froze him out of the business in an effort to force him to sell at a discount.
Kleiner and Davis denied these claims, and countered with allegations that Krasny came to the restaurants “under the influence of intoxicants” and was frequently belligerent with employees, customers and vendors-allegations he denied at the time. He declined to comment for this story.
Kleiner’s foray into The Clubhouse venture, without Davis, turned out to be a sign of the fissure to come.
Davis, a business litigator and certified public accountant who is a partner at the law firm of Shefsky & Froelich Ltd., speaks personably, though guardedly, about his split with Kleiner.
“I told Jerry I wanted to get a business divorce from him” in 2003, he says. Asked what led to his decision, he says, “The stock answer would be, ‘We see things differently.’ I can’t say more than that because it gets involved in legalities.”
Ah, the legalities.
Last August, Davis filed a claim in Cook County Circuit Court against Kleiner, alleging, among other things, that Kleiner overcharged for some furnishings and unlawfully solicited key employees to assist on his personal ventures.
His claim is layered atop an earlier lawsuit by his father, Marvin, who was a minority partner in Marche. Marvin Davis alleges, among other things, that his son and Kleiner violated a non-compete agreement when they opened Red Light across the street from Marche and that they breached their fiduciary duties when they didn’t offer him a chance to invest in other restaurants. The suit also claims the pair paid themselves excessive management fees for Marche, in effect giving themselves an unfair share of the profits. Kleiner and Davis have denied the allegations.
Howard Davis says he hopes the disputes in both filings will be resolved amicably. Kleiner sees both legal claims as bargaining ploys.
“I feel Howard and his father are in cahoots . . . to force a settlement toward their side,” he says. “In separation or divorce, sometimes things happen, but it will all get resolved.”
Asked for his take on what led to the split, Kleiner says: “Just different philosophies. He’s a full-time lawyer and everything else. I need more hands-on guys. We had a great relationship . . . but it’s time to move on sometimes. It’s no big deal.”
But Kornick, the former minority partner in Marche and Red Light, sees a pattern.
“Everybody divorces Kleiner eventually,” he says. “He has a one-sided viewpoint as to the reason for his success. He’s an incredibly talented and creative person . . . but he’s outspoken about success having less to do with other support partners and more to do with his design concept.”
Kleiner rejects this observation, saying, “I always brought people forward . . . I can’t tell the press who to write [about].
“There’s a lot of jealousy out there as well,” he continues, “but I want people to do good, I want Howard to move on and do good. I still talk to Dan [Krasny]. And a lot of people come back to me . . . and want to do things together.”
Davis is now partnered with renowned Thai chef Arun Sampanthavivat to form Chefcorp, a company designed to help talented chefs open restaurants. Their debut outing is Le Lan, an elegant French/Vietnamese hybrid that opened in River North in July to mixed reviews.
Kleiner has launched several other new projects, the most ambitious of which is the Nuevo Latino place at 702 W. Fulton St., set to open in March with start-up costs of about $5 million.
The yet-to-be-named eatery, which replaces the now-shuttered nightspot Drink, will be nearly twice the size of Marche, the largest of the Kleiner/Davis restaurants.
“We’re projecting over 200 employees,” Kleiner said. “That’s a lot. Oh my God . . . It’s nuts just thinking about it.”
Ed Schoenfeld, a New York food consultant who is working on the project, says that for the restaurant to thrive, “This needs to be a very, very busy place. You need excitement to get them there and then you need to play at a high level to keep them coming back.”
A new restaurant’s success can often hinge on the subtleties of the menu, and Kleiner often involves himself in such details. He and associates gathered at Marche recently to map their strategy for their latest high-stakes venture. At one point, the talk turned to finding a dish that’s delicious but cheap, a modest-ticket item that will keep ’em coming back
Schoenfeld suggests skirt steak. “It’s so thin, you get a lot of plate coverage,” he says.
“Can we do it for $14.95?” Kleiner asks.
“You could serve it for $12.95,” Schoenfeld says.
The conversation continues as the group samples possible menu items. At one point Molinaro drapes a long arm around Kleiner’s shoulders. He seems still for the moment. Content.
ON ONE OF his drives around the city, Kleiner recalls a conversation he once had with financier Sam Zell.
“I go, ‘Sam, how much money do you need?’
“And he goes, ‘Jer, it’s not about the money to me, it’s about the love of the game.’ “
“He makes perfect sense,” Kleiner says. “To me, it’s how many pictures can a Picasso paint? Was he going to stop painting? No . . . You move on to the next canvas.”
– – –
WHAT KLEINER’S GOT COOKING:
The creative force behind these projects, Kleiner has hooked up with a variety of financial partners on each.
– 400-seat Nuevo Latino restaurant
(As yet unnamed)
702 W. Fulton St. (former site of Drink)
Expected opening: March 2005
Estimated startup cost: $5 million
– 100-seat restaurant/lounge/gallery
(As yet unnamed)
311 N. Sangamon St. (former meat-storage facility)
Expected opening: December 2004
Estimated startup cost: $1.9 million
– 165-seat Amer/Asian restaurant/bar
(As yet unnamed)
5201 S. Harper Ct. (property owned by University of Chicago)
Expected opening: spring or summer 2005
Estimated startup cost: under $1 million
– Retail/event/office space
19 E. 21st St. (former electrical powerhouse)
Retail space: Rented to Revival, an architectural artifacts shop
Event space: Chicago Illuminating Co., available for corporate/cultural events
Office: Will serve as Kleiner’s headquarters
Opened: mid-2004
Estimated startup cost: over $2 million
