California passed State Outdoor Advertising Act SB 919 in August 2001, which requires billboard developers to obtain local permits before erecting signs on property such as that of the Metropolitan Transit Authority (MTA). The law became effective January 1, 2002.
STI/Outdoor LLC, a subsidiary of Viacom (Outdoor Systems), had an agreement to erect billboards and kiosks on MTA property in exchange for installing toilets in MTA restrooms and sharing advertising profits of at least $23 million. Believing that local permits were not required prior to January 1, 2002 under the terms of the agreement, STI/Outdoor began construction of new billboards at several locations just hours before the deadline. The sign company believes that local approval was not part of their original contract, but was adopted separately by the MTA board as a resolution after the contract was signed. STI/Outdoor indicates that the MTA did not have the right to add the restriction.
Construction crews raced to erect billboard structures on New Year’s Eve, just before the new state law took affect. The Los Angeles Times reported that two code compliance officers and a sheriff’s deputy were dispatched to one of the construction sites to stop the sign company’s work crew. The sheriff’s deputy reportedly had to threaten the workers with arrest before they would stop erecting the structures, according to City Manager Paul Arevalo.
City Attorney Rocky Delgadillo went to court on January 3, 2002 to obtain a restraining order to stop further construction activity at the sites. A hearing was set in Los Angeles Superior Court to consider arguments by the sign company and city officials.
At a press conference, Delgadillo stated “Behind us stands an illegal billboard that Viacom tried to erect in the shadows, over the holidays when they thought no one was looking.” He said, “These illegal tactics will not stand. We will do everything in our power to tear down these billboards and make this company pay for its actions.”
County Supervisor Zev Yarosiavsky, who serves on the MTA board, stated that “They had a deal, a legally binding deal, that in exchange for their right to put up billboards, they had to first get the permission of the local jurisdiction where the billboard was going to be erected.” Yarosiavsky believes “They knowingly tried to breach, and did breach, a contract. So, aside from the restraining order…they now find themselves, in the opinion of the MTA and its lawyers, in breach of contract.”
The Los Angeles Times reported that Viacom reconsidered the matter and decided to dismantle the work that had been done. However, the hearing was still scheduled to determine if the stop-work order should be lifted.
This confrontation is not the only thorny issue concerning billboards in Los Angeles. On January 16, 2002, the City Council voted to conduct a survey of illegal billboards to gain better information about the nature and magnitude of billboard issues in the city. They also are planning to hire more investigators to police illegal signs. Councilwoman Cindy Miscikowski declared that she plans to renew a proposal that will ban all new billboards. She will also fight a proposal to allow 70 new billboards to be erected along freeways in exchange for removing about 1,400 signs in other parts of town. Miscikowski also proposed a voter initiative to tax billboard firms to pay for enforcement of regulations. Some City Council members believe it may cost more than $2 million annually to closely monitor and control billboards.
On January 30, 2002, the heat was turned up at the City Council meeting. Criticism of billboards rose to a fever pitch and it appears that the addition of new members on the Council will provide the majority of votes in favor of stricter controls. Councilman Jack Weiss proposed a measure along the lines of Councilwoman Miscikowski’s that would police signs more closely and charge sign owners a fee to cover the City’s cost of tighter control.