A Geneva developer has plans to proceed in the coming months with work on the final phase of The Reserve at Hudson Crossing, a multi-use development with luxury apartments and parking decks at Washington and Adams streets in downtown Oswego.
The Oswego Village Board in a 4-2 vote recently approved a fourth amendment to a redevelopment agreement to extend the construction deadline for the north building, the second of two buildings for the project being developed by Shodeen Group, LLC.
Voting in favor were Trustees Karin McCarthy-Lange, Karen Novy, Jennifer Jones Sinnott and Andrew Torres. Voting the other way were Trustees Tom Guist and Kit Kuhrt.
Per the agreement, construction on the second building is to begin by June 1, with work to be completed around September 2026. In addition, the developer’s financing agreements with its lender are to be signed by May 15.
The construction of the south building was completed in 2021. Work on the second building was delayed due to a number of factors relating to the COVID-19 pandemic, village officials said.
In addition to luxury apartments in two six-story buildings and commercial on the street level, the project will have two two-level parking decks that will be village-owned once work is completed.
Construction of the north building is estimated to cost $28.4 million, an increase of 47% since 2019, village officials said.
“Staff believes that this development benefits the village and especially the downtown,” Oswego Village Administrator Dan Di Santo said.
The work on the second building will create new construction jobs and add 104 new residential units which will lead to more customers for downtown Oswego businesses, he said.
The village will receive $800,000 in excess increment at the end of a tax increment financing district in the area as well, village officials said.
The two-year delay in building the second structure is “justifiable given the chaotic turn of events around the world from 2020 to present,” village officials said.
The developer has proven its readiness to start construction in March, village officials said.
“Once constructed, we project the second building will generate an estimated $500,000 in annual TIF increment which will pay for the debt service and the village will be the owner of the second parking deck,” Di Santo said.
The Oswego Village Board in 2017 entered into a sale agreement with Shodeen for the development of the former Alexander Lumber site that had sat dormant for a decade.
By the end of that year, the Village Board and Shodeen had a redevelopment agreement for the multi-use project, according to village documents. The agreements had three amendments approved in 2018, according to village documents.
There originally was uncertainty about a project of this magnitude in downtown Oswego, village officials said.
“Now in 2025, we can smile at that. The project has been successful with the apartments downtown,” Di Santo said.
There had been no projects of this magnitude in Kendall County, he said.
“Shodeen took a stretch to convince banks this rental project was going to work in Oswego,” Di Santo said.
The first amendment approved for the agreement in 2018 extended the deadline for the developer to secure financing and purchase additional property along Adams Street for the project.
The second amendment split the project into two phases, first the south building and then the north building.
“At the time, the banks were willing to take the risk but not on two buildings,” Di Santo said.
In November 2018, the Village Board approved a third amendment to revise the funding split between the two buildings.
The construction of the south building was completed in 2021.
Under the terms of the redevelopment agreement, construction on the north building was to begin in early 2023, with most of the work done by August 2024.
However, the project was delayed, village officials said.
With sharp increases in prices for construction materials and labor as well as rising interest rates, the developer was not able to secure the financing to make the project deadline for the second building, Di Santo told trustees.
The construction market has since stabilized, rental rates have risen and interest rates have come down, making it more beneficial for the project, Di Santo said.
“Shodeen is happy to report they do have final financing for the second building and they are ready to build,” Di Santo said.
The developer has a construction schedule with work to begin as early as March, Di Santo said.
Since the work on the north building was delayed, the recently-approved fourth amendment to the redevelopment agreement was necessary, the village administrator said.
The proposal for the second building features 104 apartment units and a two-level parking deck that will be village-owned upon completion, with four levels of residential above the deck. The parking deck will have 123 parking spaces, according to the plan.
The village is looking to combine the bond issuance for the north building with a $50 million bond issue planned in the spring for the Lake Michigan water connection for Oswego, which could yield a lower interest rate to reduce the village’s bond issuance costs, Di Santo said.
The debt service for both the north and south buildings will be paid using tax increment financing generated by the improvements associated with the project. The village will own the two parking decks built during the project. The tax increment financing district ends in 2040, Di Santo said.
It’s estimated there will be an estimated $600,000 in excess increment from the north building and $1 million from the south building. The village and the developer would split that money, Di Santo said.
Kuhrt objected to the split of funds.
“I want to take that out of the agreement,” Kuhrt said.
Shodeen Group President David Patzelt said the 50-50 share was in the agreement from day one.
Patzelt said projects such as this have “razor-thin” margins of return.
“We would not move forward if we have to forfeit that 50%, simply because it’s part of the return that’s included in the overall project,” he said.
Guist had concerns with how long the project has taken.
“The frustration is the delays,” Guist said.
Financing has been the driver, Patzelt said.
“We have a window to get this building going,” Patzelt said. “We believe this public-private partnership has been a great partnership. We believe that we have been upfront with village staff and staff has been upfront with us.”
He said the south building has proven popular since it opened in 2021.
“We currently are at 94% capacity,” Patzelt said.
Linda Girardi is a freelance reporter for The Beacon-News.