Oswego Village Board approves incentive pact for Dairy Barn restaurant on Main Street

The Oswego Village Board has approved an economic incentive agreement worth $70,000 with the developers of the proposed Dairy Barn fast casual ice cream and burger restaurant in downtown Oswego.

During a meeting Tuesday evening, April 7, board members voted unanimously to adopt an ordinance authorizing the agreement with Imperial Investments, LLC of Yorkville, project developers.

Imperial Investments is currently constructing a three-story commercial building with a first floor restaurant on the former site of the village hall at 113 South Main Street.

On Feb. 18, the board approved a final Planned Unit Development (PUD) agreement for the construction of the Dairy Barn proposed by Imperial Investments next door to its commercial building at 121 Main Street on the site of the now-closed Dairy Hut.

In a memo to the board, Corinna Cole, the village's economic development director, noted Imperial Investments requested the incentive agreement to "offset construction costs and the expense of operating the restaurant."

The agreement, Cole noted acknowledges the importance and the "elevated business risk" that Imperial is taking in constructing the commercial building and the Dairy Barn.

Cole described the restaurants as "both pivotal businesses to increasing the vibrancy and traffic on the south side of Main Street."

Cole noted that the village would normally expect to receive $260,000 in sales tax and food and beverage taxes from the Dairy Barn over the five-year life of the agreement. Under terms of the agreement, she said the village will abate the local portion of the state sales tax of 1% for 5 years or for a total of $70,000, whichever comes first.

Cole noted the village will still receive the proceeds from its Home Rule Sales Tax and Food and Beverage Tax over the five-year period of the agreement which is expected to total approximately $190,000.

If the Dairy Barn closes within six years of opening and Imperial does not open a new restaurant in the building, the agreement requires the firm to repay a portion of the abated tax revenues.

"If the restaurant closes within four years of opening, Imperial must repay 50% of the abatement. Imperial's repayment obligation decreases to 25% of the abatement received if the restaurant closes between the fourth and sixth anniversary of the restaurant opening," Cole noted in her memo.

As planned by Imperial, the Dairy Barn will be housed in a 4,200-square-foot, two-story building and operate year-round. The restaurant will have seating for 122 patrons indoors and 48 seated on an outside porch.

According to project plans, birthday and other private parties will be held in a 500-square-foot party room and quick service eats will be enjoyed while watching old-school farm-themed cartoons on TVs throughout the restaurant.

A stage, which also can be used for seating, occasionally will open for live music, and like its predecessor, Dairy Hut, Dairy Barn will have sidewalk service, where ice cream treats and quick-service snacks can be ordered from outdoor windows.