INSIDE DISH: St. Elmo stakes out expansion plan

Welcome back to IBJ’s video feature “Inside Dish: The Business of Running Restaurants.”

Our subject this week hardly needs an introduction. A local institution and likely the best-known Indianapolis restaurant nationwide, St. Elmo Steak House has been serving grill-seared steaks and scorching-hot shrimp cocktails to downtown patrons since 1902.

“We see St. Elmo’s as Indianapolis’ restaurant; we’re just stewards of it for a period of time,” said Craig Huse, managing partner and co-owner with his father, Stephen Huse. “We feel a lot of weight and responsibility with maintaining and improving the reputation of this restaurant.”

Founded by Joe Stahr in the Braden building at 127 S. Illinois St., the eatery originally known as Joe Stahr’s Tavern operated at street level and entirely in what now is considered St. Elmo’s barroom. A series of renovations and expansions beginning in the 1970s has swelled the restaurant’s capacity to 360 seats in the barroom, four more distinct dining areas on the first floor (made possible with the purchase of two neighboring buildings to the south), and three more enclaves on a lower level that can double as private dining rooms.

The father-and-son owners now plan to expand up. They are preparing to convert 3,000 square feet on the second story of the three-building complex from office space to a swanky bar-and-lounge.

“It’ll be a little bit of an escape for our guests with a fireplace and a quaint bar,” Craig Huse said. “The current bar [on the first floor] is amazing, but it is a bit of a thoroughfare for people entering and leaving. So this new niche will be a little bit of an oasis for some of our guests.”

Huse expects to begin work on the project by June and complete it before the 2012 Super Bowl in February. The estimated budget for the project is between $1.6 and $1.7 million, which would include moving the second-floor offices to the third floor.

“I don’t think it will have a different name; I think it will just be an extension of St. Elmo,” Craig Huse said of the new space. Some desserts and appetizers likely would be available, including the restaurant’s signature shrimp cocktail.

Mixing the new with the traditional is one of the main challenges for the owners as they happily play curators to the restaurant’s old-school vibe while subtly trying to freshen and improve the eatery.

Restaurateur Stephen Huse and St. Elmo employee Jeff Dunaway purchased the restaurant from owners Harry Roth and Isadore "Izzy" Rosen in 1986 for $2.5 million. (After an acrimonious legal dispute, Huse bought out Dunaway’s 49-percent share in 1998.)

Grand plans to expand the restaurant culminated in a $2 million project in 1997 and 1998 that moved the kitchen from the west entryway to the east end of the restaurant; created the three lower-level dining rooms and a wine cellar; and rounded out the ground-floor eating sections with The Tony Hulman Room.

The wine cellar, which at one time held as many as 20,000 bottles, is an example of the restaurant adapting to the changing dining landscape. “The restaurant really started putting an emphasis on wine once my dad bought it in 1986. That’s the time when wine in general in the United States became a more important part of the meal,” Craig Huse said.

With a larger kitchen, the restaurant started expanding its menu. (In the video below, Inside Dish takes a tour of the kitchen, and discusses elements of the St. Elmo business strategy with Craig Huse.) With the advent of more female patrons, more seafood and salads found their way onto the board of fare. The recent popularity of dry-aged steaks also is reflected among current offerings.

The restaurant also has embraced the online reservation system Open Table, and built a sturdy Internet presence with a website and e-mail marketing. In 2010, St. Elmo spent $195,000 on marketing expenses, including Web-based tools, print advertisements in local and national publications, and sponsorship deals with professional and amateur teams.

 “We’re always focused on the bigger picture and trying to make sure that this place will be around for another 110 years,” Huse said. “That is the goal.”
 

St. Elmo Steak House 127 S. Illinois St. (317) 635-0636 www.stelmos.com Concept: Quintessential historic steak house, maintaining the character from its early 1900s roots while subtly updating its decor and menu; perhaps the city's primary culinary landmark. Founded: By John Stahr in 1902, the same year that the Soldiers and Sailors Monument was dedicated. In the mid-1940s, the brothers Sam, Isaac and Harry Roth purchased the restaurant. In 1955, Isadore ("Izzy") Rosen became a partner with Harry Roth. In 1986, restaurateur Stephen Huse and St. Elmo employee Jeff Dunaway bought the eatery. Dunaway sold his interest in the restaurant in 1998. Owners: Stephen Huse (majority owner, 51 percent) and son Craig Huse (minority owner, 49 percent; managing partner). Purchase price: $2.5 million in 1986. Gross sales: $11 million (2009); $11.9 million (2010). Employees: 112 (32 waiters, 15 bussers, 13 cooks, 13 hostesses, 12 bartenders, 9 managerial staffers, 8 dishwashers, 7 kitchen helpers, 3 members of cleaning staff). Seating: After several major renovations in its 109-year history, the restaurant now seats 360 in eight distinct dining areas on the ground floor and a lower level). Goals: To open a 3,000-square-foot bar-and-lounge on the second level of the restaurant (some of which is currently occupied by administrative offices) before Super Bowl XLVI in February 2012. Estimated cost: $1.6 million. Good to know: Food facts—In 2010, St. Elmo Steak House served 37,500 pounds of shrimp in 105,000 shrimp cocktails, accompanied by 3,000 gallons of cocktail sauce; 145,000 pounds of beef; and 130,000 pounds of potatoes (mashed, french-fried, etc.).