In a move to protect its 84 digital signs scattered throughout Los Angeles, Clear Channel Outdoor sent a letter yesterday threatening a $100-million legal claim against the city.
The letter was sent just before a special working group convened Saturday at City Hall to come up with suggestions on a new citywide sign program.
SoCal Connected obtained the 11-page letter, which was sent to Mayor Antonio Villaraigosa, City Attorney Carmen Trutanich and Council President Herb Wesson. Clear Channel Outdoor's executive vice president and general counsel Sara Lee Keller stated in the letter that the company has already submitted required forms for monetary damages, a motion that Keller says is "clear notice of Clear Channel Outdoor's potential claims against the city," which "substantially" exceed $100 million.
Keller states "digital signs are valuable property," and the letter makes it clear the company will fight to keep them.
"The City is at a crucial juncture; it can trigger costly litigation that exposes taxpayers to hundreds of millions of dollars, or it can avoid the courtroom and resolve the legal status of digital signs in a way that reaps fiscal and aesthetic benefits for the City," Keller writes, adding that "Clear Channel Outdoor will be forced to protect its rights in court" if the city doesn't negotiate with the company.
Jim Cullinan, a spokesperson for Clear Channel Outdoor, told SoCal Connected, "We hope to resolve this situation without litigation, but as required by the city, we also filed notice with the City that we will pursue a damages claim in the event the City chooses not to resolve this situation."
Clear Channel's letter and claims arrived at Los Angeles City Hall just two months after a California Court of Appeals decision that struck down the city's 2008 settlement agreement between Clear Channel, CBS and Regency Outdoor. That agreement allowed three companies to convert traditional billboards to digital boards. A competitor, Summit Media, sued the city, claiming the settlement was illegal, in part, because it gave exemptions to the city's sign laws to just three companies. In December, the Court of Appeals agreed with Summit Media and invalidated the 2008 settlement agreement, which could force all of the digital billboards to be taken down. If that happens, Clear Channel suggests its loss of revenue could easily exceed $100 million. The company has now asked the California Supreme Court to review the case and a decision is expected soon.
In the event the California Supreme Court denies Clear Channel's review, the company says it has already asked the Los Angeles Building and Safety Department to figure out how Clear Channel's existing digital permits are legal under other parts of the city's municipal code. The company states in its letter to the mayor that it is "willing to negotiate relocation agreements with the City that would expressly validate these signs and their permits," which would include "sign take-down and public benefit concepts." Clear Channel also says it wants the option to relocate its signs to other parts of the city and has already filed permits to move two signs in West L.A.
"It's a beyond-belief tactic. It is just trying to frighten the city into what they want," said Dennis Hathaway, founder of the Coalition to Ban Billboard Blight, which has long worked against the proliferation of digital signs in Los Angeles. "I think that the fact that it is coming the day before the visiting group that Clear Channel is a part of -- the timing is very bothersome."
Hathaway is part of a 32-person working group that met Saturday at City Hall. The working group will address if the signs should stay or go, if the city
should have a revenue sharing plan, and if it should require community benefits in exchange for digital signs. Joining community members were members of Clear Channel, other billboard companies, and their lobbyists.
Hathaway said Clear Channel Outdoor's letter "poisons" the work of the group. "Unless the working group comes up with what they want, they are going to sue the city. So what's the point?" he said.
The working group is supposed to present its report to the city's Planning and Land Use Management Committee in March.
Mayor Villaraigosa said he had no comment about Clear Channel's action because he hasn't had a chance to review it.
Ads promoting Clear Channel Outdoor 's digital billboards as public safety tools have been flooding the airwaves recently, and the campaign to portray the electronic signs as a benefit to residents and businesses continues in Keller's l1-page letter. It states Clear Channel Outdoor has devoted free advertising space on its digital boards to the manhunt for former LAPD officer Christopher Dorner and several nonprofits like United Way and The Leukemia Society, among others.