Oswego still is set to get a HomeGoods home decor store, but at a different location than originally proposed.

Originally, the HomeGoods store was to locate in the former Lowe’s Garden Center in the Prairie Market shopping center along U.S. Route 34. Those plans have fallen through.

The store now is proposed to be built between PetSmart and Aldi in the Prairie Market East shopping center at the intersection of U.S. Route 34 and Fifth Street.

At the Dec. 9 Oswego Village Board meeting, trustees unanimously approved a financial incentive agreement of up to $1.5 million with the owners of the shopping center that would be paid over a maximum of 15 years.

The agreement will start once the store is built. An occupancy permit must be issued no later than July 1, 2027.

“This deal just does not work without some sort of assistance,” Oswego Economic Development Director Kevin Leighty told village trustees. “With no financial assistance, with the amount of rent that HomeGoods would pay, the developer would be lucky to break even on their construction loan and then subsequent mortgage.”

He also noted construction costs are high these days.

“Some construction costs are up as high as 40%, some even more,” Leighty said. “In addition to that, borrowing costs, as many people know, are at an all time high.”

Starting on the date of HomeGoods’ opening, the village will rebate 100% of the municipal sales tax generated by the business for up to 15 years or a maximum of $1.5 million, whichever comes first.

“This project is expected to produce a substantial amount of tax revenue which would more than make up for the proposed incentive,” Leighty said. “During the incentive term, the project will continue to generate an average of $144,000 annually in home rule sales taxes. After completion of the incentive, the project will generate combined total of more than $300,000 in annual sales taxes.”

Leighty said that inclusive of the $1.5 million incentive, the project is still anticipated to produce almost $2 million for the village through 2040.

“If the store closes or relocates, they have to find a replacement tenant within two years,” he said.

If they don’t do so, 50% of the incentive will have to be refunded to the village within three years of the agreement and 25% refunded to the village after the third year but before the fifth year of the agreement, Leighty said.

“We wanted to give them ample time to find a replacement as we want to continue to generate that revenue coming in and additionally provide our residents with a place to shop,” he said.