By RENEE RICHARDSON
Senior Reporter

Kelly's closed its doors in January, but new owners are breathing new life into the restaurant.

After a major renovation of the interior and exterior, the new restaurant - Jake's City Grille - will open in early May.

The new owners, brothers Rob and Tony Jacob, have a string of restaurants in the Twin Cities. Under the Jacob Restaurant Group, they have Jake's City Grille, Jake's Sporting Cafe and Nye's Polynesian Room - the venerable polka and piano bar in Minneapolis. There are Jake's City Grilles in Eagan, Eden Prairie, Maplewood and Plymouth and a Jake's Sports Cafe in New Brighton.

Rob and Tony Jacob have homes on Gull Lake and frequented Kelly's, particularly when the restaurant was owned by Duff Erholtz.

Early on the Jacob brothers had an eye on Kelly's for about a decade and thought it would be a perfect fit. Rob Jacob said they liked the neighborhood feel of the restaurant, which is just off County Road 77 near Ski Gull in Nisswa.

The Jacob brothers grew up in the restaurant business with their parents' corner place in northeast Minneapolis. It was neighborhood driven and that idea of the former Kelly's as a neighborhood destination struck a chord with them.

"To us it was a perfect location," Rob Jacob said.

More recently the restaurant struggled, but Jacob said the neighborhood support is there along with the potential to draw as a destination spot for tourists and area residents. "We want to get that business back," Jacob said.

Duff Erholtz bought the restaurant, which had been the Birchwood Inn for about 50 years, in 1993. He was 29 then and picked a site people considered in the middle of nowhere. But Erholtz said the neighborhood expanded around him. His goal was to create a comfortable place where the food didn't disappoint.

After 11 years, Erholtz sold the restaurant to Pat and Gayle Betcher. He didn't expect to still be involved, but as plans go he continued to be the landlord. After the restaurant closed recently, Erholtz sold it again to the Jacob brothers.

"It was very good for me and I think it could be again," Erholtz said of the restaurant.

Specialty weekend events, including more use of a pavilion for live bands on Saturdays, for example, is one of the ways the new owners plan to drive business back through the doors. Hosting grooms dinners is one of the reception areas the new restaurant expects to attract. Renovations to the restaurant include an expanded patio.

The Jake's City Grille here is expected to be a combination of the metro eateries with energetic earth tones and stainless steel along with the up north stone and knotty pine. The former Kelly's will be basically gutted and redone. Rob Jacob said the goal to re-energize the location without losing the neighborhood feel. And, he said, they don't want to come in to recreate a metro restaurant here. Instead, the goal is to fit the surroundings, stress the quality of the service and provide food at reasonable prices. Restaurant offerings are made from scratch.

Jacob said the prices will be in line with Matty's or Zorbaz. The Jake's City Grille menu from the Twin Cities locations offers grilled black Angus burgers with fries and

Business partners since 1997, the Jacob brothers are familiar with business highs and lows.

"We feel we've gone through the worst time," Rob Jacob said of the recession. Jacob added while business isn't expected to really come back until 2011, the draw of a new place to eat out should provide enough of a spike for 2010.

"It was a good opportunity for us to do it now," Jacob said of purchasing the closed restaurant. "So we couldn't pass it up."

Expectations are to hire about 20 to 25 employees, which could grow to 35 for the summer peak. The restaurant will be open year-round and have off-sale liquor as well. This is the Jacob brothers first restaurant outside the metro area. But as lake residents, they are familiar with the ebb and flow of the area.

The menu features an award-winning signature JakeWings with sweet and spicy sauced and grilled chicken wings, black Angus burgers and steaks, Tex-Mex lobster tacos, mesquite smoked barbecue ribs, and a house soup of spicy shrimp sausage chowder. There are specialty sandwiches, salads and pasta and fish. Weekend and nightly specials are planned along with Saturday and Sunday breakfast menus and special occasion brunch buffets.

RENEE RICHARDSON, senior reporter, may be reached at renee.richardson@brainerddispatch.com or 855-5852.