Eli’s Cheesecake Co. broke ground on Tuesday on a $9.5 million expansion of its Northwest Side production facility that will give the iconic Chicago cheesecake maker room to grow as it recovers from the COVID-19 pandemic.
President Marc Schulman, son of the late legendary Eli Schulman, He said the expansion will give the family business some much-needed breathing room.
“Things were starting to get very tense here,” he said. Eli’s has made cheesecakes at the Dunning neighborhood facility since 1996. But the company has grown since then, adding new products and a gluten-free kitchen. The additional space will allow Eli’s to say yes to additional growth opportunities in the future, Schulman said. The expansion is the company’s first since the 1990s.
Construction on the facility, located at 6701 W. Forest Preserve Drive, is expected to be completed in the first quarter of next year, Schulman said. The 42,000-square-foot addition will bring the production facility to 104,000 square feet, which will include Eli’s corporate offices as well as Eli’s Cheesecake Bakery Cafe.
The company has considered expansion for many years, Schulman said.
Despite an “exceptionally dire” start to the pandemic, when a wave of order cancellations brought business to a standstill, about 90% of Eli’s employees returned to work in about four months, Schulman said.
Diversification allowed the company to keep going as the pandemic continued, Schulman said; in particular, Eli’s saw the share of its mail-order business grow to about 10%. The central Chicago location made it easier to ship frozen cheesecakes across the country than if Eli’s had been based on either coast, he said.
Eli’s has continued to recover, hiring about 80 people in the last six months. The company is on track to exceed the number of jobs needed to meet the employment goals associated with the tax incentives it received for the project, which require Eli’s to grow from 225 to 300 employees in two years. “We will definitely get over that,” Schulman said. All of Eli’s employees are based in Chicago.
Incentives include a $203,250 tax credit from the state’s growing economy economic development program and a Class 6(b) property tax incentive from the city that will reduce property taxes by $386,135 over 12 years.
More than 50 of the company’s most recent hires have been refugees from Afghanistan, the company said in a news release. Eli has for a long time emphasized employing refugees.
Thick and creamy Chicago-style cheesecakes baked on a shortbread base were served exclusively at Eli Schulman’s restaurant, Eli’s The Place for Steak, until 1980. when the pies were a resounding success at the first Taste of Chicago.
These days, Schulman estimates that about 60% of Eli’s business comes from the foodservice sector, including partnerships with airlines like United and American and restaurant chains including Culver’s, which Eli partnered with at the start of the pandemic. The rest of the cheesecake business comes from retail sales, including grocery stores like Jewel-Osco and Mariano’s, and mail order.
Schulman said he is grateful the company has remained family-owned with a focus on quality throughout its growth and success.
“The fact that we manufacture more is not an excuse to compromise on quality at all,” Schulman said. “These are real people making cakes.”