Cottage Grove is anticipating an economic bounceback

  • Article by: JOY POWELL , Star Tribune
  • Updated: April 6, 2012 - 5:46 PM

From a business accelerator that would help new firms, to a proposed Wal-Mart, the city wants to start shaping a brighter era.

Cottage Grove is forging ahead with plans to create hundreds of local jobs and attract new stores and firms.

The city's initiatives range from a new "business accelerator," intended to help fledgling companies with reduced lease costs, to a proposed Wal-Mart store that could expand the city's retail area and commercial base, said City Administrator Ryan Schroeder.

Economic development in this and other east-metro communities has been slow during the past four years, and Cottage Grove has been hit especially hard with foreclosures.

But there are signs of a turnaround. After redevelopment, L.A. Fitness plans to move into the city's largest vacant retail space -- near 80th Street and East Point Douglas Road -- where Home Depot closed in 2008. Existing home sales also are picking up. And the city's marketing initiatives are generating some synergy, Schroeder said.

City officials call the accelerator "exciting news" for the entire metro area. Small businesses and startups will be able to lease space in what soon will become the former City Hall building at 7516 80th St. It will be vacated as employees move to a new public safety and City Hall building, currently under construction.

The city hopes to attract businesses in their early stages to the "incubator" and provide coaching, marketing assistance, general office needs and help with networking and recruiting investors. In the process, it hopes to make good use of a city building that otherwise might sit vacant.

It's the latest push by a city that's taken a role as an active developer in the creation of a business park in 1997, which has yet to realize an economic recovery, and also the Gateway Redevelopment District in 2001. That 365-acre district covers all four quadrants of the Hwy. 61 and 80th Street interchange, a commercial hub.

The accelerator will primarily target companies likely to grow into the business park or local private office space that's vacant, officials said.

"We are providing a unique opportunity to growing businesses," said Paul Poncin, a member of the city's Economic Development Authority (EDA). The goal, he said, is to bring in jobs.

"The future of this project is just so exciting from a business standpoint that I cannot conceive of any way that we as a community do not benefit," he said.

Fellow EDA member Tony Jurgens said the city is recruiting businesses not yet in a position to buy or rent at market rates.

"In fact, we expect successful businesses to graduate to renting space, buying existing buildings, or building new in and around Cottage Grove, and that's how we'll judge success of the accelerator," Jurgens said.

"We know some businesses won't make it, and some of the successful ones might exit the market. That's part of the risk. But if we hit a couple home runs and Cottage Grove gains growing, successful businesses providing jobs, tax dollars, community involvement and support of other Cottage Grove businesses, then this will have been worth the investment."

Meanwhile, the owners of the Cottage View Drive-In and adjacent property have been discussing a land sale to Wal-Mart, but the store's proposal requires council approval of land use, traffic and utility concerns, Schroeder said.

A Wal-Mart store would create about 300 full- and part-time jobs and "spin-off" spending that could keep other stores competitively priced, he said. And it could reduce the residential taxpayer burden, Schroeder said.

Wal-Mart also could prevent "slippage" that occurs as shoppers spend outside the community for many goods, from hobbies to hardware to sporting goods and home furnishings, he said.

Joy Powell • 651-925-5038

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