This post has been corrected. See note below for details.
A billboard company fighting to preserve dozens of digital signs it has erected across Los Angeles warned this week that it would go to court to seek more than $100 million from City Hall if it is ordered to remove its electronic signs.
In an 11-page letter sent Friday, Clear Channel Outdoor described its digital signs as “valuable assets that the city cannot attempt to take away without paying just compensation.”
The letter comes two months after a three-judge panel struck down an
agreement approved by the City Council in 2006 that allowed Clear
Channel and CBS Outdoor to replace 840 existing billboards with digital billboards.
That panel ordered a lower court to invalidate all digital
conversions permitted under the agreement. But Sara Lee Keller, Clear Channel's lawyer, warned that if the council instructs the company to turn off the signs “it would
be exposed to liability to Clear Channel for the fair market value of
such signs, which substantially exceeds $100 million.”
“While litigating these claims would
be costly and time-consuming for all … we believe it is important to be
clear about the consequences,” Keller wrote. Clear Channel managed to install 79 digital billboards before the agreement was blocked.
The letter drew a sharp response from Summit Media, a competing sign company that successfully sued to block the 2006 agreement. Phil Recht, the company’s attorney, said in a statement that Clear Channel made it clear that it has “no regard for the rule of law.”
“Clear Channel is trying to bully the city into submission so that they can continue to make hundreds of millions of dollars in illegal profits from these digital billboards two courts ruled to be illegal,” he said.
The threat was sent one day before neighborhood activists and outdoor advertising lobbyists –- including Clear Channel and its representatives -- participated in a working group to discuss possible digital sign legislation. One proposal up for discussion would allow new digital billboards to be installed in exchange for the removal of a greater number of static billboards.
Clear Channel and a handful of other billboard companies have contributed tens of thousands of dollars in recent weeks to Proposition A, which is on the March 5 ballot and would hike the sales tax rate to 9.5%. That measure, if passed, would generate more than $200 million annually for the city budget.
Meanwhile, Lamar Advertising, which has proposed its own plan for converting signs to digital formats, has been spending $5,000 per candidate on outdoor advertising promoting the City Council campaigns of Councilman Joe Buscaino, Assemblymen Bob Blumenfield (D-Woodland Hills) and Gil Cedillo (D-Los Angeles), and former Assemblyman Felipe Fuentes, as well as the city controller campaign of Councilman Dennis Zine.