Council debates economic development incentives, declines feasibility study for hotel

The Lonsdale City Council spent substantial time on Jan. 8, 2026 discussing economic development priorities and what incentives the city should offer to prospective businesses.

City Administrator Joel A. Erickson framed the conversation around the need to give clear answers to developers about what the city will and will not offer. Council members reviewed an array of incentive tools: feasibility studies, reduced city fees, tax abatement, tax increment financing (TIF), discounted land prices, a revolving loan fund and a façade rehabilitation program.

Mayor Tom Berg said he does not believe the city should fund a feasibility study for a proposed hotel project at this time. The council also revisited a previously denied apartment project that had requested a tax abatement; several councilmembers indicated they are open to incentives on a case-by-case basis if there is clear benefit to the city. Councilmember Brian Wermerskirchen suggested more effective use of the Economic Development Authority to vet potential projects before they reach council. Councilmember James Vosejpka emphasized streamlining processes so developers do not waste time.

No formal action was taken at the meeting; councilmembers asked staff to continue evaluating specific incentive options for pending development projects and to return with proposals or clearer terms where appropriate. The discussion reflects ongoing efforts to balance development incentives against the city’s higher-than-normal site costs, which Mayor Berg said are driven by challenging soil conditions and related infrastructure expense.

The council will continue the conversation as projects approach formal applications and potential tax or funding requests.