Twenty-six-year-old Frank Elliott operated the Velvet Rope Ultra Lounge in Oak Park.
He is now charged with two counts of arson and one count of insurance fraud.
In court Saturday, prosecutors said Elliot and a friend went to a liquor store and got several bottles of Everclear.
The two doused the bar with the alcohol and sprayed gay slurs on the walls before igniting the fire.
Elliot spoke after the incident last year and wondered why he would be targeted.
"This is my life on the line. Everything I've done my entire life is now behind plywood," he said. "Why did they choose me? What did I do?"
A judge set bond at $20,000.
Elliot faces seven years in prison on each arson count and 15 years for the alleged insurance fraud if convicted.