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Illinois steak restaurants close as costs rise

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(The Center Square) – Higher costs are hurting Illinois restaurants.

Mercedes Restaurants president Ron Helms said it’s a bittersweet situation, after Alexander’s closed its Springfield steakhouse after 40 years in business. Helms cited rising costs as a major factor.

“The labor continues to be a bugaboo with restaurant business, as far as the increase in minimum wage year after year,” Helms said.

Food and beverage costs have also risen dramatically. For Helms’ remaining restaurants in Illinois, one labor issue is especially troubling.

“They’re talking about doing away with the waiters’ tip credit, which right now is a big problem going on in the future for the state of Illinois,” Helms said.

Legislation proposed in Illinois would mandate minimum wage instead of a subminimum for tipped workers. The National Restaurant Association issued a statement in response, saying the proposal would lead to job cuts.

For Helms and his workers at Alexander’s Steakhouse in Springfield, there was a lot of emotion as they said farewell.

“I was the opening manager at this location 40 years ago, so it’s a bittersweet situation for me as well as for some of our long-term employees,” Helms said.

Alexander’s lease expired last week. Helms said the main issue for the steakhouse was not rent, but rising costs.

“Food costs are up dramatically over the past three years. Our liquor costs continue to go up. Our beverage costs like Pepsi keeps going up,” Helms said.

Alexander’s restaurants in Peoria and Normal remain open, he said. The national chain Outback announced the closing of more than 40 steakhouses, including one in Mount Prospect, Illinois.