Bomgaars is one step closer to Austin

Bomgaars, a Sioux City-based home improvement retailer, could be moving into the Kmart building in Austin as soon as October. Bomgaars, similar to Mills Fleet Farm, would likely employ 25 to 30 people. The Austin Port Authority put its support behind the retailer Wednesday. -- Matt Peterson/

Port Authority clears latest hurdle for new retailer at Kmart site

Click here for a letter from the Port Authority to Bomgaars

Home improvement retail chain Bomgaars is one step closer to making Austin home for its newest store.

The Austin Port Authority unanimously approved a letter of intent Wednesday afternoon, indicating its willingness to help the Sioux City, Iowa-based company open shop in the empty building left by Kmart when it closed in May 2010. The Port Authority can now begin negotiations with Bomgaars for a $150,000 loan to assist the company in purchasing the building.

“Having a vacant big-box store like that — there isn’t any community that wants that,” said Craig Hoium, the city’s community development director. “I think this would be a step in the right direction.”

Commissioner Lee Bjorndal agreed.

“It’s a huge goal to fill one of those spaces,” he said.

Negotiating for a Port Authority loan isn’t the only item left on Bomgaars’ to-do list, though. Before plans are confirmed, the company needs to work out a four-year lease with Kmart/Sears Holding Co., which currently leases the building until November 2016.

“Once that lease expires, they would then purchase the property,” Hoium said.

At that time, the Port Authority would disperse a $150,000 loan to the company out of its general fund. Specifics of the loan will be determined in upcoming negotiations, including the possibility for full or partial loan forgiveness to Bomgaars if the company meets certain requirements of creating jobs and keeping them. Under the letter of intent, the loan would need to be finalized by the end of November.

“We believe that your company will find our community to be fully supportive in meeting your needs as you grow,” wrote Director Jim Hurm and President Jerry McCarthy in a Port Authority letter to Bomgaars.

Bomgaars would hire management staff plus 25-30 employees at $9.50-$10.50 per hour, along with benefits.

Building remodeling would consist of work on a new main entrance, facade upgrades and a loading dock area, at an estimated cost of $250,000. Separate from that cost would be roof replacement and parking lot resurfacing.

If all goes according to plan, remodeling would start Sept. 1 and the store would be open for business in October.

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