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The Albert Lea City Council on Tuesday approved a development agreement and subsidy for an oat mill processing company that plans to build in southern Albert Lea.

Iowa-based Green Acres Milling will build a 135,000-square-foot development off of 14th Street across from the new Vortex Cold Storage plant in the Jobs Industrial Park. Once operational, it is expected to process 2 million bushels of oats per year or 8 metric tons per hour, according to City Planner Megan Boeck.

City Manager Ian Rigg said the company is expected to create 12 jobs in two years with an average yearly wage of $100,000 including benefits. Oats will come from farmers in Minnesota and Iowa and neighboring states.

Rigg said the council previously had a public hearing regarding the tax-increment finance plan for the project in June but because the full terms of the subsidy and development were not completed at that time, an additional public hearing had to be held.

He said the pay-go TIF incentive totals $741,600 payable starting on Aug. 1, 2027. Under the TIF, the developer will pay the taxes, and then a portion will go back to the company. Rigg said once the company reaches the agreed upon amount or the life of the district concludes, then the agreement ends.

The Albert Lea Economic Development Agency agreed to sell the property where the plant will be built for half of its $600,000 value. Boeck said 10% of the increment collected will go back to ALEDA to make up for the land price reduction.

The developer will pay $20,000 in a TIF deposit for costs incurred by the creation of the district.

“This is the type of project that we love bringing to the community,” said Albert Lea Mayor Rich Murray, noting that the project will create tax base. “It’s a small business that we can bring in, that can add jobs to the community.”

He estimated the company is investing $40 million to bring the project to Albert Lea and said he thought the company would break ground in the spring once it wrapped up its financing.