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Cottage Grove EDA outlines development pipeline, explains tax-abatement use for Yellow Tree project
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Summary
At its Jan. 13 meeting, the Cottage Grove Economic Development Authority heard a community development briefing covering school construction, apartment projects and business expansions and discussed the city-only tax abatement being pursued for the Yellow Tree apartments after TIF was ruled inappropriate.
Cottage Grove — The Cottage Grove Economic Development Authority on Jan. 13 received a community development briefing from Economic Development Manager Nate Carlson that highlighted ongoing school construction, recent apartment project approvals and efforts to secure incentives for business expansions.
Carlson told the board that the city’s Beige Book shows positive signs in manufacturing and commercial construction while consumer spending has decreased. He highlighted work at Park High School and Cottage Grove Middle School — including completed concrete slab and plumbing work at the middle school over the holiday break — and reported that recent apartment projects, including Hadley Ridge, have closed financing and received building permits.
Carlson also described the Yellow Tree Apartment project, which received Planning Commission recommendations for a preliminary plat and site plan in December. "That project is pursuing a tax abatement because TIF wasn't deemed appropriate for this project," Carlson said, adding that tax abatement would be used to offset costs tied to unique grading and site constraints. "TIF is a lot more rigid… As opposed to tax abatement, a lot more flexibility," he said, explaining that TIF typically involves multiple levying entities while a tax abatement would initially affect only the city's portion of the levy.
The manager said the team is still working with financial advisers to finalize unit counts and assessments before the council considers the abatement, and that state incentives through DEED — including the Minnesota Investment Fund and job-creation funds — are also under review for qualifying projects.
Carlson described other projects in the pipeline: a planned addition by Van Meter Inc., a redevelopment grant application for the Ross property (a roughly 4-acre site south of Walmart on East Point Douglas reserved in direction for a hotel), and continuing improvements at the water treatment plant and water tower.
Board members asked clarifying questions about the jurisdictional impacts of tax abatement and the location and intended use of the Ross site. Carlson said assessments are still being finalized and that further details will come when the proposals reach the council.
