A precise implementation plan for a Comfort Suites hotel in Cottage Grove was approved by the Cottage Grove Village Board on Monday, May 18.
Greywolf Partners was given the green light for the planned unit development that would allow for a five-story, 82-room hotel of about 57,000 square feet to be built on Landmark Drive, immediately south of the strip mall, also owned by Greywolf.
Amenities in the hotel will include an indoor pool, fitness room, meeting room, breakfast area and an outdoor space.
This plan differs somewhat from the general development plan approved months earlier. At the May 13 Plan Commission meeting, Todd Rizzo of Greywolf Partners highlighted those differences.
– The building height at the entry has increased from 64 feet to 68 feet, while the height of the rest of the building decreased from 64 feet to 63 feet.
– The floor area ratio has been reduced from 1.0 to 0.93.
– The width of the sidewalk along Landmark Drive has been increased from 5 feet to 6 feet.
– Stormwater management and infiltration will be handled with an underground facility beneath the parking lot.
– The revised design incorporates stone along the first floor on all sides (similar to that found on the retail building to the north), incorporates more brick in the upper floors, and replaces the white exterior insulation finishing system with a blue/grey color.
Village Administrator Matt Giese said the variances are allowed under a planned unit development. Acknowledging they are exceptions to the written code, he said no municipality can adequately predict every possible scenario, which is why the planned unit development zoning allows for them.
Rizzo said there would be two monument signs with flexibility to locate on either Highway N or Landmark Drive.
Greywolf plans to break ground in June and be open in 10-12 months.
In early May, the village and Greywolf signed on to a developer’s agreement that provides financial incentives to the business in exchange for meeting building and operational requirements.
“That offers a lot of protection to the village, because your incentives are based on shovels in the ground, whether or not they get building permits, or occupancy permits. There’s an incentive grant that gets paid out after they’ve reached 50 percent completion of the project,” said Rick Manthe of Stafford Rosenbaum, the village’s attorney. “Then the back-end incentives are all entirely based on their performance.”
First, the village will provide an incentive grant of $750,000, payable in three installments: $187,5000 when the village issues a building permit; $187,500 when 50 percent of construction is reached (meaning the developer has spent $4.7 million on developing the hotel; and $350,000 when the village issues an occupancy permit.
With the issuance of the occupancy permit, the village will also issue $706,670 in a municipal revenue obligation at no interest as long as the project generates sufficient excess tax increment to make scheduled installment payments.
Giese said this reimbursement of taxes paid is a standard incentive for new businesses.
“Village payments of the municipal revenue obligation will be made each November, from all excess tax increment generated from the property (i.e. new property tax revenue), beginning in 2021 and each subsequent year, until either the principal amount ($706,670) is paid off or the tax increment district closes (2027), whichever comes first,” he said.
Finally, the village will agree to pay the developer 30 percent of all room taxes paid by the developer for 10 years. The village collects an 8 percent tax per room.
Greywolf estimates the Comfort Suites property will have a total assessed value of at least $5.25 million as of Jan. 1, 2022.
The developer’s obligations are secured by a personal guaranty to be provided by each member of Greywolf with at least 20 percent interest in the hotel.