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Cottage Grove EDA amends TIF agreement for Roars apartments to add rental caps required for state tax classification
Summary
The EDA adopted Resolution 2026-003, amending the prior TIF agreement for the Roars housing project to add rent restrictions so the developer can pursue Minnesota's 4D tax classification; the measure passed 3–1.
The Cottage Grove Economic Development Authority on May 12 adopted Resolution 2026-003 to amend the TIF agreement for the Roars apartment project, adding rental restrictions and a declaration of restrictive covenants to satisfy Minnesota’s 4D tax classification requirements.
Nate told the board the developer requested the amendment after beginning construction in January 2026 to meet state requirements tied to the tax program. He said the amendment and the recorded declaration will obligate the property to maintain the rental restrictions so long as the TIF district remains in place.
Explaining the difference between income and rental restrictions, Nate said income-restricted units require tenants to pass an income verification (for example, the developer committed to 29 units at 50% of area median income and eight at 60% AMI) while rental restrictions cap the rent. "Rental restrictions . . . need to be 30% of that income. It cannot exceed that," Nate said, describing how rent limits are tied to tenant income and unit-level AMI designations.
Finance Director Brenda Malinowski told the board the 4D application process is administered by the state, not the city, and that the city typically sees the paperwork only for verification when residents inquire. "They send them to the state," she said, adding that city staff will assist residents by checking state filings if questions arise.
EDA member Scott moved to adopt the resolution; the motion passed on a 3-to-1 vote. The resolution directs staff to record the declaration of restrictive covenants and to update project documents to reflect the rental restriction requirement.
What happens next: The city and the developer will record the declaration against the property and the developer will proceed with the TIF-related filing for the 4D classification with the state.
