Bomgaars Expansion May Lead To Annexation Of Implements

Bomgaars is planning to nearly double the size of its Neligh store, going from 12,000 square feet to more than 22,000.

Mike Olson serves as manager of the Neligh location, which is the smallest of all 69 Bomgaars stores.

Neligh's Comprehensive Plan includes possible annexation of several areas, including the implements. Click the image for a large look at future land use in Neligh.

With Bomgaars planning to nearly double the size of its Neligh location in the coming months, the City Council tabled action Tuesday night for future discussion of an annexation plan that may include all implement dealerships.

What began with discussion and possible action for extending water and sewer services to Bomgaars quickly escalated to annexation of that area since TIF financing would be available to help fund the utility project if the commercial business were within city limits.

Council member Leonard Miller said it would be unfair to annex that area, which includes Case IH dealership Kayton International, without annexing the other two dealerships.

“Kayton’s may be extremely upset if we annex that and don’t annex John Deere (Green Line Equipment) or Reinke’s because it’s not a level playing field,” Miller said. “They’re selling basically the same thing, and it’s going to make an unlevel playing field for him to compete because he’ll have to add sales tax.”

Not able to further that discussion without being on the agenda, the Council tabled the items on Bomgaars. However council member Ted Hughes said the City does want to help Bomgaars expand their business - but that may not include annexation.

“I don’t think there’s any disagreement about extending the water,” Hughes said. “Taking an official position, I don’t think we can do that.”

Located just west of the Neligh city limits, Bomgaars is planning to start a 10,000 square foot addition in July, according to Dave Meyer, senior vice president/chief operating office of Bomgaars’ corporate office in Sioux City. They plan to have the new space in use after the holidays.

Meyer told the City Council that Neligh is the smallest of their 69 stores in Iowa, Colorado, Nebraska, Minnesota, South Dakota and Wyoming. The expansion will take the now 12,000 square foot store to more than 22,000 square feet.

“We appreciate you being here,” Mayor Joe Hartz said. “Number one - thanks a lot for keeping your store here and now thanks for expanding it. It’s been a great store to have in our community."

The issue facing Bomgaars, Meyer said, is being required to sprinkle the building. He said there’s not enough water pressure to run a fire sprinkler system.

City Engineer John Zwingman told the City Council it would be relatively easy to run water - and cost about $119,000 - to Bomgaars but adding a sewer system would be more costly due to the elevation. He recommended rebuilding the lift station near Jonny Dodge, which would cost about $125,000. Total cost would be about $250,000.

Ryan Bolinger, project manager for W.A. Klinger, told the Council that water is the most important aspect for the expansion. He said they are currently using a septic system and could continue that way.

“We would need some kind of agreement that says at some point the water line will be brought,” he said. “Without having the water, the state won’t let us build."

But in order to receiving the TIF funding, annexation would have to take place, according to Economic Development Director Greg Ptacek said, who had county assessor Kelly Mueller view the plan recently and estimate its assessment. The estimate was between $585,000-$750,000, which would have a tax principal of $71,350-$106,500. 

Ptacek said this is “textbook TIF project” and is exactly what the program is designed for.

Zwingman said the idea of annexing isn’t new to the City of Neligh and was a key aspect of the City’s Comprehensive Plan. Extending water and sewer could lead to economical expansion.

"The other thing people have to keep in mind is currently it would serve three properties, but as we went to the meetings on your comprehensive plan, this is one of the areas talked about for annexation for commercial and residential expansion and possible commercial expansion along the highway corridor," he said.

Hughes said rather than annexing piece by piece, he’d rather “sit down and do it” and annex both sides of Neligh and include all implement dealerships. 

At this point, waiting on a decision won’t hold up Bomgaar’s plans, Meyer said, but they’ll need to be assured they’ll have water available either way for the fire marshal. To get TIF funding, Bomgaars must be annexed, and annexation is a timely process that couldn't be complete until June - at the earliest. Bomgaars plans to star construction in July.

“We’re willing to say, ‘Yes, we want to be annexed. Yes, we’ll have a new assessment on the building. Taxes are going up,’ ” Meyer said. “The only way we can start, though, is if the fire marshal gives a blessing to let this building go.”