The Oswego Village Board on Tuesday will vote on economic incentive and loan agreements designed to bring a higher-end American-style restaurant to the downtown, officials said.
The developer, 4 Guys Kitchen Oswego LLC, is proposing a “substantial buildout” of a vacant space at 180 W. Washington St. within the Reserve at Hudson Crossing development for a restaurant to be called Ellwood Steak and Fish House, Oswego Economic Development Director Kevin Leighty said in a report to trustees.
“Due to the raw condition of the space and high construction costs that exist in the current market, the applicant is seeking approval of up to $340,000 in direct financial assistance along with a $300,000 loan at a 3% interest rate based on estimated project costs of $1.15 million,” Leighty said.
The proposed tenant, Ellwood Steak and Fish House, is an established restaurant concept with an existing location in DeKalb, Leighty said.
“Village staff has been working with this group since December when they first started looking for available space in Oswego,” Leighty said.
Leighty informed trustees that the restaurauteur finalized a letter of intent and subsequently a lease to take over the vacant corner space within the Reserve at Hudson Crossing development.
“However, with the space being largely unfinished and the large amount of related capital needing to be invested, the project is ultimately dependent on finance assistance to move forward,” Leighty said.
The retail tenant space has been vacant since the Shodeen Group’s Reserve at Hudson Crossing building was constructed and opened in 2021, Leighty said.
The village had previously received plans from a full-service pizza restaurant to take over the space, but the plans were abandoned in 2022, he said.
“Since that time, there has been occasional interest in the space, but no deal has come to fruition due mostly to the amount of work needed to build out a restaurant there,” Leighty said.
The total cost of the buildout is estimated at $905,000. The applicant estimates an additional $100,000 in opening inventory costs and $149,000 in working capital costs for an “all-in total of approximately $1,154,000,” Leighty said.
Leighty said the restaurauteur has secured private financing for up to $300,000 and a tenant improvement allowance of up to $400,000 from the landlord Shodeen.
The tenant has presented proof of up to $150,000 that it is able to contribute in equity for a grand funding total of $850,000.
“There remains a significant financial gap for the project to move forward,” Leighty said.
Leighty said the applicant’s project budget “was reviewed internally with the utmost scrutiny” and comparisons of construction costs were reviewed and scrutinized as well.
The village is recommending up to a $340,000 incentive to be paid over a maximum of 10 years. The village further would rebate 50% of all sales taxes collected by the village, such as food and beverage sales taxes, that are generated by the business for up to 10 years or until a maximum of $300,000. In addition, the village would provide an economic development grant award of $40,000 to be paid upon completion of the buildout.
The restaurauteur is looking to start construction as soon as possible and potentially open before the end of the year if the proposed agreements are approved, Leighty said.
“The project is expected to produce a substantial amount of tax revenue which would help offset the financial impact of the incentive,” Leighty said.
The restaurant is expected to generate an estimated $500,000 to $1 million in sales taxes over the 10-year incentive term, he said.
“Of this amount, the village would collect half during the incentive term and then an estimated $65,000-$80,000 annually thereafter based on reasonable sales projections,” Leighty said.
Linda Girardi is a freelance reporter for The Beacon-News.
