Construction set to start in March for second building at Hudson Crossing apartment development

After a two-year delay, the Shodeen Group is set to begin on the second building for The Reserve at Hudson Crossing luxury apartment complex in downtown Oswego by June 1.

During the Jan. 21 Oswego Village Board meeting, the majority of village trustees approved a fourth amendment to the redevelopment agreement between the village and Reserve at Hudson Crossing LLC.

The agreement stipulates that construction of the 104-unit building on a vacant lot at the northwest corner of Adams and Jackson streets will begin no later than June 1, with completion around September 2026. In addition, financing agreements must be in place by May 15.

“Staff believes there are numerous benefits to this project,” Oswego Village Administrator Dan Di Santo told village trustees. “$28.4 million is the cost to construct this building. We believe to have that much investment in downtown Oswego is a great benefit to the downtown. It’s going to create numerous construction jobs. It’ll add 104 residential units.”

A two-level parking garage with 123 spaces is also part of the plans. The village would take ownership of the parking garage after it is constructed.

The parking deck would have four levels of residential units above it. The first building also has a parking garage.

Overall, there will be 436 parking spaces in both parking decks in addition to 97 surface parking spaces between the two buildings.

The first building at The Reserve at Hudson Crossing opened in February 2021. It is a six-story building that has 176 apartment units on the upper floors along with 10,000 square feet of commercial space for restaurants and shops on the building’s ground level that fronts Washington Street.

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.

“Now that the construction market and pricing have stabilized, rental rates have risen and notably, interest rates have come down, Shodeen is happy to report that they do have final financing for the second building finally,” Di Santo said. “And they are ready to build.”

The second building is expected to generate $500,000 annually in tax increment financing that will be used to pay the debt service on the net $3 million bond issuance to fund the second parking garage and other TIF eligible improvements, Di Santo said.

When a municipality creates a TIF district, its property assessment is frozen and new or increased taxes generated by improvements are used to pay for improvements or other development incentives.

By the end of the TIF in 2040, the north building is expected to generate $600,000 in excess TIF increment that would be split 50/50 between Shodeen and the village, according to the terms of the redevelopment agreement. The north building will also be eligible for $321,694 in village grant dollars (the remaining amount from the original $900,000 grant).

Plans are for construction to begin in March, he said. Because construction of the second building did not begin in 2023, a fourth amendment to the redevelopment agreement was necessary, Di Santo said.

Village trustees Tom Guist and Kit Kuhrt voted against approving the amendment to the redevelopment agreement. Kuhrt objected to the sharing of revenues at the end of the TIF.

“I want to take that out of the agreement where there’s no 50-50 share of the tax at the end of the TIF district,” Kuhrt said.

Shodeen Group President Dave Patzelt was against that idea.

“That 50-50 share was in the agreement from day one,” he said. “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.”

Guist wanted more assurances from the developer that the project will finally move forward.

“We want the project,” he said. “We want it done. But we also want the ability to keep it on schedule and get it done.”