If you've been noticing more out-of-town guests staying in Woodbury or Hastings instead of Cottage Grove, you're not alone—and the city is ready to change that. In a strategic move to address high demand for local lodging, Cottage Grove officials have announced plans to purchase a 3.59-acre site at 9430 E. Point Douglas Road and offer it at a reduced price to a hotel developer.
The proposed hotel, ideally a 90-room, midscale to upper midscale national brand, would be located in a high-visibility area next to Highway 61 and close to both Walmart and the future Shoppes at Cottage View—a planned 73-acre commercial and mixed-use development. The site is also within a mile of the Cottage Grove Business Park, which employs over 3,550 people and regularly hosts vendors, contractors, and corporate visitors.
City consultants from Bolton & Menk have drafted a conceptual plan for a three-story, 190,000-square-foot hotel with 140 parking stalls. Key amenities would include a complimentary hot breakfast, indoor pool, fitness center, and guest laundry. Estimated construction costs in 2025 range from $11.5 to $13.7 million, and to attract the right developer, Cottage Grove is covering $100,000 in site prep and offering the land at a below-market price.
According to a June 2025 hotel accommodation study, 70% of hotel visitors to Cottage Grove currently stay outside the city, revealing a major gap in available lodging. With only two hotels and a combined total of 107 rooms in the city today, the proposed site offers a strategic opportunity for both developers and the community.
The request for hotel development proposals is open until August 29, 2025, with selection expected in September. For developers and real estate investors, this could be the next big project in the southeast Twin Cities metro.
