Cottage Grove Council approves 164‑unit Hadley Ridge affordable housing project, commits LAHA and bond conduit
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Summary
The Cottage Grove City Council approved a developer agreement, a $916,000 Local Affordable Housing Aid (LAHA) commitment and authorization for up to $50 million in multifamily revenue bonds to support a 164‑unit affordable project called Hadley Ridge; developer expects financing closed by year‑end and construction to start in early 2026.
The Cottage Grove City Council voted unanimously to approve three linked actions for the Hadley Ridge affordable housing project, a 164‑unit development proposed by Real Estate Equities.
Finance Director Brenda Milanowski told the council the project includes affordability set‑asides—three units under 30% AMI, 15 units at 31–50% AMI and 122 units at 51–60% AMI—and that staff and the city's municipal adviser, Ehlers, reviewed the finance plan. Milanowski said the city will offer $916,000 in Local Affordable Housing Aid (LAHA) for the development; that support will be structured as a loan that becomes forgivable after 15 years if the affordability commitments are maintained.
Council approved a development agreement with Cottage Grove AHI LLP/Real Estate Equities, authorized the LAHA agreement (final execution contingent on city and developer counsel review), and passed a resolution authorizing the issuance, sale and delivery of multifamily housing revenue bonds with a maximum conduit amount of $50,000,000. Milanowski emphasized that the bonds are conduit debt for the developer and “are not on our books” and do not affect the city's bond rating.
Blaine Barker, representing Real Estate Equities, told the council the development team expects to close financing by the end of the year and to start construction in early 2026, with completion targeted for late spring 2027.
The council’s approvals included the development agreement, the LAHA aid agreement and the bond authorization; each motion passed by voice vote.
Next steps: final legal review of the LAHA agreement and closing of financing; developer and staff will return if adjustments are required under counsel review.