The Cottage Grove Economic Development Authority (ED) approved $75,000 in EDA trust funds tied to the future County Road 19 and 100th Street realignment project at its meeting Tuesday, May 12, along with facade improvement grants and an amendment to an affordable housing tax increment financing agreement for Roers.
The planned realignment of County Road 19 and 100th Street in the south business park has been in process for years and will open the area to development, the realignment crossing 3M property off Highway 61. City Administrator Jennifer Levitt took the dais Tuesday to present on the project, saying that the city continues preparing for possible construction beginning next year while working to preserve existing grants and partnership funding already secured for the corridor.
Levitt said the project requires platting work involving between 14 and 17 parcels owned by 3M. She said the city and 3M have collaborated on the alignment for several years and that the platting process would help prepare the area for future development opportunities.
“The city has agreed to do the platting for the county project, and then 3M at this point has essentially agreed to dedicate the right of way to us in lieu of an assessment for the 100th Street improvement,” she said. “This platting work will set the stage for future development in the area.”
The EDA approved the use of $75,000 in EDA trust funds for preparation of the plat related to the project corridor surrounding 3M-owned parcels.
Earlier in the meeting meanwhile, commissioners heard from Cottage Grove Economic Development Manager Nate Carlson, who shared a brief update from the Beige Book before providing updates on several construction and redevelopment projects across the city. Carlson said economic conditions showed improvement, while agriculture remained in a depressed state. demolition work at the Park Grove Library has been completed and crews are rebuilding the exterior while utility work continues. Construction also continues at both Cottage Grove Middle School and Oltman Middle School.
Carlson also updated the board on two major apartment developments currently under construction. Work at the Roers Apartments along Highway 61 includes retaining wall construction and foundation work, while Hadley Ridge Apartments has completed major portions of its parking structure and begun wood framing. Carlson also reported progress at Cedarhurst and on the city’s new water tower.
Levitt noted the water tower project reached a milestone recently with approval of the logo placement on the structure.
“Today is a very big day,” she said May 12. “The tank should lift on Sunday, so if you don’t have anything to do on Sunday, you can come out and watch that steel bowl be lifted to the top of the concrete pillar.”
Also from Tuesday, the EDA also approved a facade improvement grant for Country Inn & Suites. Carlson said the hotel owner plans significant exterior improvements and has also begun discussions with the city and convention and visitors bureau about increased collaboration.
The city’s facade improvement program, established in 2019, provides matching reimbursement grants intended to improve commercial building appearance and strengthen the city’s commercial building stock. Carlson said the Country Inn & Suites project qualified for the program’s maximum reimbursement amount of $24,999.
Board members also discussed funding availability within the program. City officials said previous years’ unused allocations and EDA fund balances would allow the city to support the current round of applications. Finance staff reported the EDA held approximately $137,000 in available fund balance at the end of the previous year.
The board unanimously approved the grant award to Yogi Cottage Grove LLC, owner of the hotel property.
A second if smaller facade improvement grant was awarded to Voltas Holdings LLC, a medical technology company located in the former Advanced Corporation building off 97th Street. Carlson said the company is creating medical technology development space, including clean rooms for startup and entrepreneurial businesses.
The Voltas project includes landscaping, exterior painting and signage improvements. The board approved matching grant funds of up to $3,276 for eligible expenses.
Following approval of the Voltas grant, the EDA also voted to direct staff to hold future facade improvement applications until 2027, the program currently having $137,000 in funds but effectively restricted to two projects a year.
The EDA also approved an amendment to a previously approved tax increment financing agreement for the Roers housing project near Point Douglas Road. Carlson explained the developer requested the amendment to add rental restrictions to affordable housing units in order to qualify for Minnesota’s 4d tax classification program.
Carlson explained the distinction between income restrictions and rent restrictions during board discussion.
“When it comes to income restrictions, the future tenant just has to meet that income threshold,” Carlson said. “They can charge market rent for that unit so long as their income qualifies for that unit, whereas rental restrictions, they need to do both. They need to have income verification and the rental restriction that needs to be 30% of that income.”
The board ultimately approved Resolution 2026-003 amending the TIF agreement and covenants on rent restrictions tied to the project, Commissioner Thomas Tschida voting against.