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Spearfish to renegotiate 3 billboard lease sites

July 25, 2018

SPEARFISH — Three billboard lease sites on property owned by the city of Spearfish will be renegotiated before the leases are set to expire in September.

The Spearfish City Council July 16 directed staff to renegotiate the leases for the billboards, two of which are located in front of the Atlas Building at 120 Industrial Dr., with the third located at the Black Hills Energy Sports Complex.

A memo to the council and Mayor Dana Boke, from City Planner Jayna Watson, dated July 3, described that the leases were initiated in 1998 and annually generate $900 in revenue — $300 per billboard — and expire on Sept. 15. “The lease agreement did not specify any type of rent increase since 1998 and the rent amount has remained the same for 20 years,” the memo states.

Staff asked the council to consider its options regarding the billboard leases, including renewing the leases with Lamar Advertising on an annual basis, with the same annual rent; terminating the leases permanently, giving Lamar Advertising proper notice to disassemble/remove the billboards; or terminate the existing leases and renegotiate new leases that include updated rent amounts and length of lease.

Terry Wilson, Lamar Advertising real estate manager, said at the meeting that the history of the billboards included how they had been located in portions of rights-of-way that the city wanted to use, so the city and the company at the time that owned the billboards, which had a 17-year lease on the billboards at $300 per sign per year, decided that the company would move the billboards at their cost and the city would continue the same lease amount for a period of 20 years.

Lamar acquired the billboards since, and Wilson said that he calculated costs, inflation, etc., and said that the leases would be closer to $2,600 per billboard per year.

Councilman Dan Hodgs made a motion, which was seconded by Councilwoman Pam Jacobs, to direct staff to renegotiate the leases with Lamar, and the council unanimously approved the motion. Councilman Larry Klarenbeek and John Lee were absent.

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