Watertown City Council Advances 25-Year Dynoair Airport Hangar Lease at Watertown Regional Airport
- Steve Jurrens
- 23 hours ago
- 2 min read
Northeast Radio SD News – Watertown, SD - The Watertown City Council took the first procedural step toward finalizing a long-term property lease at the Watertown Regional Airport during its August 3, 2026, meeting.
The council unanimously approved Resolution No. 26-31, a resolution of intent to enter into a lease agreement with Dynoair LLC for city-owned real property. Finance Officer Kristen Bobzien introduced the item, explaining that passing the resolution of intent is a legally required first step before the actual lease can be formally adopted at a subsequent public hearing.
Lease Terms and Details
Under the proposed agreement, Dynoair LLC will lease 5,625 square feet of airport property to house a privately owned 75-by-75-foot hangar.
The primary terms of the proposed lease include:
· Duration: A 25-year initial term, renewable for one additional 10-year term.
· Base Rent: The lessee will pay $0.20 per square foot annually, resulting in an initial yearly rent payment of $1,125.00.
· Escalator Clause: The rent will automatically increase by 2% on January 1 of each year until the initial 25-year term expires.
The 2% Inflation Debate
The automatic 2% annual rent increase prompted a brief discussion after Councilman Dan Schutte motioned to approve the resolution, seconded by Councilman Brent Mohrmann.
Councilman Michael Heuer questioned whether the 2% escalator was truly adequate for the city’s bottom line.
“The only question I had with it was the rent automatically increasing by 2% just as inflation is usually 3%,” Heuer noted. “Do we feel like that's sufficient?”
Bobzien candidly responded that the 2% bump is “not sufficient,” but explained that it reflects a longstanding policy at the airport. Furthermore, this specific agreement is essentially a continuation of a prior lease.
“This is actually continuing a lease that the lessee took over from another party. So he’s asked for equivalent terms and conditions,” Bobzien explained.
However, Bobzien noted that the city plans to overhaul how it handles airport land leases in the future. As the city continues to study airport practices, officials anticipate eventually replacing the flat escalator model with leases tied to a dynamic fee resolution schedule. Because many existing airport leases stretch back decades, updating all of them will be a lengthy process.
“No, that’s fair,” Heuer responded, acknowledging the need for a future fee schedule. “At least it’s not a dollar for 99 years, so there we go.”
Next Steps
Because state law requires municipalities to publish a notice and hold a public hearing when leasing property to a private entity for more than 120 days and for an amount exceeding $500, the resolution serves to set that hearing date.
The formal public hearing and final vote on the Dynoair LLC lease agreement is scheduled for the next City Council meeting on August 17, 2026, at 5:30 PM at City Hall.
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