Oswego village trustees sell $4.3 million in bonds to fund new downtown parking garage

With work starting on the second building at Shodeen Group’s The Reserve at Hudson Crossing luxury apartment building in downtown Oswego, the village is selling $4.3 million in bonds that will fund a 123-space parking garage.

The village will take ownership of the parking garage after it is complete. At a May 6 special Village Board meeting, trustees unanimously approved selling bonds not to exceed $4.3 million.

“That would produce the $3 million that the village would reimburse the developer for the construction of the garage,” Oswego Finance Director Andrea Lamberg said during the meeting. “The repayment of these bonds would come from increment generated solely from the building, from the development. So the repayment of these bonds is not coming from village money, it is coming solely from the development itself.”

The project is in a tax increment financing district that is set to expire in 2039. TIF districts dedicate sales tax revenues and additional property tax revenues generated within the TIF for improvements within the district to encourage new economic development and job creation.

Funds may be used for costs associated with the development or redevelopment of property within the TIF.

“We’re comfortable that this one building will generate $4.3 million in increment by 2039?” Oswego Village President Ryan Kauffman asked.

In response, Lamberg said projections show the building will “produce that increment.”

“If for any reason, there is not enough increment produced to cover the annual debt service payments, the developer has the option of writing a check to the village directly to pay for the shortfall,” Lamberg said. “There also is a special service area set up where we could place that shortfall directly on their tax bill. And then it would be paid through the property taxes.”

The new building, being built on a vacant lot at Adams and Jackson streets, will feature 104 studio, one and two-bedroom apartments. A two-level parking garage is part of the plans.

The project is expected to be finished in the fall of 2026.

Construction on the second building, or north building, had been expected to begin in February 2023, with substantial completion by August 2024.

The delay on the second building was caused by various factors, including the COVID-19 pandemic, sharp increases to the price of construction materials and labor and rising interest rates.

The first building at The Reserve at Hudson Crossing opened in 2021.

“It brought 339 public parking spaces, 176 apartments and they were all quickly occupied,” Oswego Village Administrator Dan Di Santo said. “It was clear at that point that there was a strong market in Oswego for more luxury apartments in our downtown.”