Portillo’s expanding in states with better economies than Illinois

Portillo’s, a hot dog and Italian beef restaurant brand synonymous with Chicago and Illinois, is focusing their expansion on out-of-state locations that treat businesses better.

For new locations, CEO Michael Osanloo said Arizona, Florida and Texas will make up “at least the majority – if not the vast majority.”

One of the reasons Osanloo cited is declining population in Chicago as well as Illinois. The U.S. Census estimated Illinois’ 2021 population shrank by over 140,000.

Osanloo referred to declining population as “a punch in the face.” Portillo’s serves Chicago street food at more than 70 restaurants in nine states, with 45 in Illinois, leaving little room to expand in-state. Other states offer more business-friendly atmospheres.

“We’re going to places where the population is growing, where the economies are healthy, where there is a great environment for companies, and where maybe the labor situation is not quite as challenging in some other markets,” Osanloo said.

From 2017 to 2022, Illinois’ ranking in the Tax Foundation’s State Business Tax Climate Index dropped 13 spots, the second-highest decline in the nation.

Fewer people ordering and applying for work puts Illinois at a disadvantage. Illinois’ unemployment rate in July was the third-highest in the nation, and the highest in the Midwest.

If Portillo’s were starting today and not 1963, they’d likely start in a state with less burdensome taxes and regulations. Illinois is the third-most regulated state in the nation and residents carry the nation’s highest tax burden.

Portillo’s headquarters in Oak Park isn’t going anywhere, but they could have a different attitude down the road. Many Illinoisans root for Portillo’s expanding, but not winding up like Boeing, Citadel and Caterpillar that all since May said they were relocating their headquarters out of Illinois.

Caterpillar’s move came after nearly 100 years in Illinois. If Portillo’s becomes a household name nationwide, they might take a similar path unless lawmakers do more to retain residents and businesses.

Rejecting Amendment 1 on the Nov. 8 ballot is a chance for voters to help small businesses and themselves avoid a guaranteed $2,149 property tax hike, higher costs and potential litigation were the vague proposal passed. The proposed change to the Illinois Constitution would empower government unions, but the language is so broad it would create uncertainty for businesses as the courts untangle its implications and higher costs as greater demands would require higher taxes.