(Crain’s) — Two upscale steakhouses plan to open this summer in River North, bets that businesses are reviving expense accounts and that the eateries can compete against a crowded field of entrenched rivals.

One is a startup being run by two longtime local steakhouse managers. The restaurant, dubbed Chicago Cut Steakhouse, will be in the base of the new office tower at 300 N. LaSalle St. It will feature a patio overlooking the Chicago River and dry-aged steaks butchered on site.

The second is a well-known, glitzy West Coast chain called Mastro’s headed by Levy Restaurants Inc. co-founder Mark Levy and former Levy executive Thomas Heymann. Mastro’s Restaurants LLC has leased a two-level, 20,000-square-foot space at 520 N. Dearborn St. that was formerly Blue Water Grill.

The new Mastro’s will have seating for close to 400 — making it one of the biggest steakhouses in the city.

“People in Chicago love steak,” says Mr. Heymann, a Highland Park native who left Levy in 1991 for Walt Disney Co. and spent eight years expanding Disney Stores worldwide. “Chicago is a great hospitality town. It’s a wonderful place to be in the restaurant business.”

Times are far from wonderful these days for upscale steakhouses, which have been struggling nationwide more than other restaurants because of the sharp pullback in business travel and corporate spending, says Ron Paul, president and CEO of Technomic Inc., a Chicago-based food industry consulting firm.

“The high-end category has not been a good place to be, and Chicago is not short on steakhouses,” Mr. Paul says. “They’re taking on a challenge, to put it mildly.”

The co-founders of Chicago Cut Steakhouse LLC, Matt Moore and David Flom, say they sense the steakhouse business is on the mend. The two partners, who ran Rosebud Prime in the Loop, had been looking for a site when they learned that a national chain was backing away from plans to take the 7,700-square-foot restaurant space at 300 N. LaSalle, which is anchored by law firm Kirkland & Ellis LLP.

The site immediately appealed to the two, says Mr. Moore, who prior to joining Rosebud in 2007 managed Smith & Wollensky, which also overlooks the Chicago River.

“I know what the river can bring,” Mr. Moore says. “We knew it’s a rock-star location and that we were home. We were just over the moon.”

The two were in for building permits this week and hope to get construction under way next week so they can open in June. The restaurant has backing from an investor group of about 30 people, Mr. Flom says. He wouldn’t identify them, but says, “A lot of them are the who’s-who guys in Chicago.”

Their former boss, Rosebud owner Alex Dana, says the two will need to make good hires in the kitchen to succeed against the existing competition and a strong new entrant like Mastro’s.

“You have to have great knowledge today of the culinary side of a restaurant,” Mr. Dana says. “If you’re just a promoter or a maitre d’, you can get run over.”

Mastro’s, which will feature live music seven nights a week, is a traditional steakhouse that rates as a go-to place with celebrities like Jennifer Aniston, Matt Damon, and David and Victoria Beckham.

The move marks the most notable entré into the restaurant business for Mr. Levy, who’s chairman of Mastro’s, since he split with his brother Larry Levy in 1998 to start an investment firm.

Messrs. Heymann and Levy acquired Mastro’s in May 2007 and have their headquarters in Woodland Hills, Calif. The chain now has eight locations, including one in Las Vegas that opened last month. The other seven are in Arizona and California.

The Chicago location will be the second to open under the new leadership, Mr. Heymann says. He credited the “creative deal” the chain struck with prominent River North landlord Albert Friedman for the space.

“We’re being very selective and opportunistic on our growth strategy, especially in these economic times,” Mr. Heymann says. He declines to provide terms of the lease, other than saying, “The better we do, the more successful Albert (Friedman) will be.”

Blue Water Grill, a seafood specialist from New York-based chain B. R. Guest Restaurants, closed early last year. Before that the space was Wolfgang Puck’s Spago.

The steakhouse deals illustrate how local independents and entrepreneurs with deep-pocketed backing are the ones seizing on today’s market opportunities, says Kim McGuire, a senior vice-president with CB Richard Ellis Inc. who represented Chicago Cut along with CB’s Danny Jacobson.

“The established restaurant chains are conserving cash,” says Mr. McGuire, who specializes in restaurants. “A lot of the leasing activity these days is independents and people who have some money and some vision. There are good, aggressive rent deals for people willing to roll the dice.”

The owner of 300 N. LaSalle, developer Hines Interests L.P., was represented by Bruce Kaplan and Todd Siegel, both of CB Richard Ellis.