Billboard corporations use money and influence to override your vote
by Ray Ring
Salt Lake City, Utah
Driving around Salt Lake City on a pleasant day last June in a plain white city government car, Doug Dansie pauses at the corner of two streets, 1300 South and 300 East. This is a residential neighborhood where old trees tower over the houses. But there's no house on this particular corner lot. Instead, it's occupied by a billboard.
The billboard isn't a 10-story freeway giant or one of those garish cutting-edge electronic signs that constantly flash digital ads like imitation Las Vegas casinos. It's only about 25 feet tall, with four angled faces that advertise a "Gem Faire" for dealers and jewelers as well as a nonprofit group that helps Iraq War veterans.
Still, "it's inappropriate to have a billboard in a residential area," says Dansie, a senior land-use planner for the city with decades of experience, who's wearing a striped shirt with his sunglasses secured by a cord around his neck.
Beyond the question of whether a billboard should stand next to houses in the first place, some people resent this billboard for a different reason. For more than five years, neighborhood residents have been trying to create a park on this small lot to honor a police sergeant, Ronald L. Heaps, who was shot to death here in 1982. They've raised some cash, and the city has offered grant money, but they haven't been able to strike a deal with the billboard company, which owns the lot as well as the sign. Dansie puts it bluntly: "The billboard is holding up the park plan."
He drives on past other controversial billboards; there are many. Much larger signs emblazoned with hard-to-ignore ads for everything under the sun -- office-furniture blowouts, lingerie, colonoscopy doctors, Rio Tinto mining, and a fast-food chain with a playfully illiterate slogan -- Eat Mor Chikin -- dominate long stretches of I-15, the main corridor through the string of cities along the scenic Wasatch Mountain Front. Other billboards punctuate the metro area, even in the midst of an active downtown renewal effort.
Gigantic construction cranes are adding to the cluster of tasteful skyscrapers downtown, while pedestrians stroll amid trendy shops and bistros, light-rail stations, the impressive State Capitol complex and the Mormon Church's Temple Square. Dansie points out billboards on downtown lots where city planners would rather see new skyscrapers and hotels. Developers are interested, but first the billboards have to go, Dansie says. Railroad tracks, viaducts and other urban eyesores have already been swept away for the downtown renewal. But the billboards remain, because in Utah, billboard-friendly state laws make removing any billboard for any reason considerably more difficult than pulling teeth. Billboards, Dansie says, "are more protected than any other industry."
It's a pattern in many Western communities. For people who think government has a role in protecting viewsheds and aesthetics, billboards are like unsightly weeds popping up in the cracks of land-use regulations. Many cities, including Salt Lake, are trying to impose tougher regulations, either banning billboards altogether or instituting "cap-and-reduce" programs that limit the total number of signs and then reduce it over time. Understandably, the billboard companies generally oppose regulations, arguing that their property rights are being violated. The issue has sparked many court battles, and state legislatures have become another kind of battlefield. Billboard companies work hard to persuade legislatures to pass laws that override local regulations; in return, the companies donate to political campaigns and run ads for politicians on billboards.
Many industries and businesses struggle with regulations, of course. But the underlying issue seems especially clear for billboards. The battle isn't really about aesthetics, or whether billboards constitute an acceptable instrument of commerce. At its core, the issue concerns corporate power and its influence over all the forms of local democracy -- city and county governments and ballot measures passed by voters. Salt Lake City Mayor Ralph Becker, a former Grand Canyon National Park seasonal ranger with degrees in law and planning, says simply: "I've never liked billboards. It's an incredibly aggressive industry."
The first major attempt to rein in billboards occurred back in 1965, when their number was soaring nationwide because of a profitable technological advancement: ads printed on vinyl strips that could be quickly installed and switched out, instead of the old cumbersome paper and hand-painted ads. That year, Congress passed the Highway Beautification Act, which was championed by Lady Bird Johnson, the wife of President Lyndon Johnson. It sought to limit the spread of billboards along federally funded highways by pressuring the states to impose regulations on their sizes, lighting and spacing.
The landmark 1965 federal law has helped keep many of the West's rural highways from being overrun. Still, it was only "a partial victory," observed a leading business magazine, Fortune, 21 years later. "Environmentalists at first wanted to outlaw new signs along federal highways and phase out existing ones without compensating owners. So potent was the billboard lobby, however, that the Highway Beautification Act ... required the federal and state governments to pay" for any billboards they want to remove from the federally funded highways, as long as the billboards were legal when they were built. Since then, governments have had to pay billboard corporations many millions of dollars to retire some signs, using controversial estimations of the profit each would generate if left in place.
And as Fortune found, "Faster than the old signs have come down, the industry has put up new and bigger ones. Reason: The act allows billboards in commercial and industrial areas, a loophole that has been interpreted so loosely that signs can go up almost anywhere (along federally-funded highways)."
Four states -- Vermont, Maine, Alaska and Hawaii -- have banned billboards altogether, but most state governments are not so tough. That means it's mostly up to local governments to regulate billboards along many kinds of roads, whether or not the roads get federal funding.
Today, there are roughly a half-million billboards in the U.S., and billboard companies rake in $4 billion to $6 billion a year. Many businesses want to advertise on billboards. In the march of technology, traditional billboards have become much more substantial -- 60 feet to 125 feet tall and mounted on seemingly permanent steel poles -- and the development of electronic billboards that use digital light-emitting diodes is a spectacular breakthrough. A digital billboard typically flashes a series of ads for eight seconds each, and the companies reportedly make 12 to 17 times as much money on them as on traditional billboards. President George W. Bush's Federal Highway Administration, under pressure from the industry, decided in 2007 that digital billboards can be installed along federally funded highways as long as they comply with state and local regulations. About 2,000 digital billboards have been installed nationwide, and every day more are proposed -- that's the industry's main goal now.
The industry also sells huge "building wraps" -- digital or vinyl ads attached to tall buildings -- as well as outdoor ads on bus stops and buses, mobile billboards towed behind vehicles, floating inflatable billboards around marinas, even helicopters lugging flamboyant digital billboards over crowded highways and sporting events.
Billboard companies and their opponents argue endlessly over all aspects of regulations, including the value of the billboards that governments want to remove, whether the new digital ones pose a dangerous distraction for drivers, whether all billboards are protected by the U.S. Constitution's right to freedom of speech -- even whether planting a palm tree that obstructs a billboard is an unconstitutional "taking" of property rights.
Randal Morrison is a San Diego lawyer who has specialized in such battles for more than 10 years, often representing cities that want tougher regulations. He says there's a "gigantic mother lode" of more than 8,000 court cases around the country since the early 1980s -- and the total number of lawsuits is still soaring. The industry's tactics, he adds, include what he calls the "billboard ambush," in which corporations simply keep putting up billboards that violate regulations, daring local governments to take them to court.
After Tacoma, Wash., passed a ban on most billboards in 1997 with a 10-year phase-out, Clear Channel Outdoor -- one of the biggest national billboard corporations -- challenged it in court. The Tacoma City Council and Clear Channel reached a settlement in 2010 allowing dozens of new digital billboards in exchange for the removal of some traditional billboards, but residents revolted, so last August the City Council passed an ordinance that bans digitals and requires the company to take down 190 billboards. Clear Channel says the city should pay it $75 million, the alleged value of the billboards in question. That court battle is still ongoing.
In Rapid City, S.D., more than 65 percent of the voters approved two ballot measures last June, banning digital billboards and imposing new limits on traditional billboards. Another giant national billboard corporation, Lamar Advertising, is fighting those regulations in court. Meanwhile, in Oregon, which had some of the nation's toughest regulations, the Oregon Legislature decided last year that some conventional billboards can be converted to digital.
The anti-billboard crusaders are seldom well funded. If they work in local government, their budgets for court battles are tight. Outside government, they're a loose movement of small nonprofit groups, such as Scenic America (based in Washington, D.C., with affiliates in some states), Blightfighters (a new small national group), neighborhood groups and determined individuals. There's an "imbalance of power," says Mary Tracy, president of Scenic America. The billboard corporations are "bullies -- most of the time the municipality gives up."
Mark Mayer, 63, Arizona's leading crusader for more than 15 years, drives a 1991 Oldsmobile with more than 185,000 miles on it. He used to be a leader of Tucson neighborhood groups as well as chair of the City of Tucson Planning Commission, and now he serves on the board of Scenic Arizona, a Scenic America affiliate that has no paid staff. He's been instrumental in some major victories: After a 1970 Life Magazine story called Tucson's billboard-infested Speedway Boulevard "the ugliest street in America," the Tucson City Council and ballot-measure voters passed regulations in the 1980s that made it harder to install new billboards and called for removal of many existing ones. Billboard corporations persuaded the Arizona Legislature to override Tucson's regulations, but eventually Tucson prevailed in court on the key issues. More than 500 billboards in metro Tucson have been dismantled, including 30 last year, leaving a total of about 390, and there are no digital billboards in the city.
Scenic Arizona and neighborhood groups in metro Phoenix achieved a dramatic statewide victory last November when they convinced the Arizona Court of Appeals that digital billboards on federal and state highways violate the 1970 Arizona Highway Beautification Act's prohibition of "intermittent" lighting on signs. That ruling might halt the push for more digitals in metro Phoenix. Even though some of the nicer Phoenix suburbs have banned billboards for decades, the entire sprawling metro area has more than 1,500, including about 40 digitals. The Phoenix City Council apparently expects the industry to win its case in the Arizona Supreme Court or by lobbying the Legislature to amend state law to allow digitals; just a few weeks after the appeals court ruling, the Phoenix City Council voted 5-4 in favor of an ordinance that allows digitals with only a few restrictions. Now, Scenic Arizona and neighborhood groups, organized as Save Phoenix Views, are circulating petitions for a ballot measure that would ban all new billboards, including digitals. Jim Mapstead, a 60-year-old perennial gadfly who runs a small sign and engraving business and serves as volunteer chairman of Save Phoenix Views, told the Arizona Republic, "I don't know if people understand the significance of what we're going through right now. The new ordinance represents a big shift in the aesthetics of this city."
In Los Angeles, Dennis Hathaway, 69, who retired from a career in the construction industry -- he began as carpenter and worked his way up to become the manager of affordable housing projects -- is the volunteer head of the leading local anti-billboards group, the Coalition to Ban Billboard Blight. That group also has no paid staff, but its few dozen active volunteers are engaged in an epic battle with corporations that have more than 6,000 billboards within city limits. In 2002, the L.A. City Council basically banned new traditional billboards and any modifications of existing ones, which arguably includes conversions to digital. But there were loopholes, and billboard corporations filed more than 20 lawsuits against the regulations. Some corporations simply ignored the ban and put up new billboards, including digitals. In 2006, then-City Attorney Rocky Delgadillo cut a deal with the biggest corporations, allowing them to convert 840 billboards to digital; about 100 have gone digital. Hathaway thought the deal was illegal and waged a guerilla campaign against it, identifying billboards that violate regulations. Eventually, the city won more court cases and passed more regulations. Recently, City Attorney Carmen Trutanich, elected in 2009, has put together a team to enforce the removal of hundreds of the illegal billboards, even filing misdemeanor criminal charges against some scofflaws and collecting more than $7 million in fines.
Now, the Los Angeles City Council is drafting a new ordinance that might have some tougher regulations, but there's "major political pressure from companies to seriously weaken it," Hathaway says. In all three key public hearings since last July, "the room has been filled with lobbyists for sign companies and developers and other business interests -- and that's just in public. There's also an immense amount of lobbying behind the scenes." Since the current regulations have a loophole allowing digital billboards in designated sign districts, there's also a "land rush," with developers proposing 16 new sign districts, "trying to create new little Las Vegases here," Hathaway says. The City Council is even considering allowing billboards in the zoo and in 16 city parks. In all, Hathaway adds, billboard corporations have donated millions of dollars in the last 10 years to city politicians, including the 2006 deal-maker, Delgadillo.
"I'm not anti-advertising -- it's important to our consumer-oriented economy," Hathaway says. "But there's a fundamental difference with outdoor advertising, because you can't ignore it, it's in your face. A public space should be about promoting values of democracy -- diversity and freedom of discourse, everyone having an equal voice and different opinions can be aired, instead of corporate values and the monoculture of one-way communication of the sales pitch. In a very fundamental way that's more important to me than whether a billboard is ugly -- there are profound implications for the urban environment."
"The idea that you can do advertising in any space, on any surface, where there might be people, is reaching new levels never reached before. Advertisers are thinking of ever-grander scale," Mayer says. "That's scary."
In Utah, billboard corporations have tried all those strategies and more. In 1993, for instance, Kunz Outdoor Advertising, a California billboard corporation, made a deal with a small southwestern Utah tribe, the Shivwits Paiute. Kunz loaned the tribe money to buy 25 acres along Interstate 15 within the city of St. George, in a scenic area where the city and the Utah government didn't want billboards. The Shivwits Paiute persuaded the federal Bureau of Indian Affairs to hold the land in trust for the tribe, and the corporation put up five billboards advertising Nevada casinos, paying a lease fee to the tribe after an initial grace period. The city and the state sued, and the case went to 10th Circuit Court of Appeals, which decided in 2005 that the deal was legal under the doctrine of tribal sovereignty. Bob Nicholson, St. George's director of community development, says, "It's a real shame, skirting the intent of the Federal Highway Beautification Act."
Even though some Utah cities -- including Provo, Ogden and Park City -- have banned new billboards, the state government might be the most billboard-friendly in the nation, thanks to Utah's innately conservative politics, which favor property rights over regulations, as well as the influence of Utah's billboard companies, particularly Reagan Outdoor Advertising. Although other billboard corporations operate in the state -- including the Young Electric Sign Co., or YESCO, which manufactures digitals -- Reagan appears to have the most clout.
It's a family-owned company, founded by William K. Reagan in 1965. A college student at the time, he began by making his own signs, digging the post-holes and "hammering them into the ground near highway shoulders," according to a 1991 profile in the Salt Lake Tribune. Eventually, Reagan Outdoor Advertising bought out Utah's biggest billboard company and had more than 9,000 billboards nationwide; then it sold off its holdings in the East, leaving it with 4,500 "sign faces" in 1991. Today, it's headquartered in Salt Lake City and run by one of William K. Reagan's sons, Dewey Reagan. In a phone interview last November, he declined to reveal the company's current holdings and revenues, but his website and other sources say that Reagan Outdoor has billboards all over Utah, plus Austin, Texas, and Las Vegas, Nev.
Reagan Outdoor Advertising and its executives have donated more than $450,000 to Utah candidates in the last 10 years alone, according to the state's financial disclosure office and the National Institute for Money in State Politics, which both track campaign spending. Most of those donations were spread widely among many dozens of members of the Utah Legislature -- including $26,000 to one of the most powerful, Sen. John L. Valentine, the Senate president from 2004 to 2008. At least $30,000 went to Utah governors. (Reagan Outdoor also donated $201,450 to Texas candidates from 2004-2010, according to the National Institute for Money in State Politics.) Many of the donations were cash; the rest were "in-kind donations" apparently of advertising space on Reagan Outdoor billboards.
Reagan Outdoor Advertising's executives and consultants have also actively lobbied the Utah Legislature, where the company generally appears to get what it wants.
Here in Salt Lake City, that pattern is clear. The city's government imposed a cap-and-reduce program for traditional billboards around 1993, but has made little progress because of the pro-billboard laws passed by the Utah Legislature.
One Utah law, for instance, has decreed that billboards are personal property, which means that taxes on them are extremely low compared to the taxes on buildings and land. That means local governments get little from taxing a billboard, even if it's on a valuable downtown lot. As a result, billboard corporations have a low overhead.
Another key law has to do with "amortization," the process by which local governments retire "nonconforming land uses." If a government passes regulations to phase out chicken coops, for instance, a lot of existing chicken coops won't conform to the new rules. Therefore the nonconforming use is allowed to continue for a certain amount of time, typically five or 10 years, and then it has to end without compensation. The process gives businesses and property-owners time to adjust to regulations. But in Utah, there's a broad exception for billboards along all kinds of roads. So when Salt Lake City limits their placement and size, thereby making many existing billboards nonconforming, the government can't just order the removal of those signs within five or 10 years. Instead, it has to buy out any nonconforming billboard it wants to retire.
Under another Utah law, when Salt Lake City does buy out a billboard, the terms are highly favorable to the billboard corporation. The government must pay not only the estimated value of the revenue stream from that billboard over the years, but also an amount calculated to cover the loss of that billboard -- how it might affect the "economic unit" that includes the corporation's revenues from other billboards. The rationale? If the corporation has one less billboard to rent to advertisers who want a lot of billboards, those advertisers might place their ads elsewhere, so the damages are larger than losing a single billboard.
If a city or county government wants to get rid of a billboard, other state laws often allow the corporation to simply relocate it to a different site nearby that is not zoned residential. If the government still wants to remove the billboard, it has to pay damages that amount to buying it out. If a local government even allows anything to obstruct the view of a billboard, in many places, it must pay similar damages. Local governments lack the money to pay all of those damages, so they have to pick their battles carefully and often shy away from enforcement actions.
Many other Utah laws protect billboards. For example, a corporation has the right to "structurally modify or upgrade" an existing billboard. That makes it hard for Salt Lake City's cap-and-reduce program to prevent the reconstruction of old deteriorating billboards, the way other cities do. Another law says that even the designation of a national historic building cannot force the removal of a billboard on the roof, something that Salt Lake City tried to do with one historic structure. Yet another law -- 72-7-505 Subsection (1)(d) in the state code -- says that "a changeable message sign is permitted if the interval between message changes is not more frequent than at least eight seconds" -- a loophole that would appear to allow for digital billboards. And a law passed in 2009 at the urging of Reagan Outdoor Advertising allows billboards on many stretches of designated scenic highways. And so on.
Asked if his company is buying legislation, Dewey Reagan says: "No. What you do gain by supporting (politicians) is the opportunity to express your concerns about issues. It's no different for the billboard industry than for the Sierra Club or any other industry that wants its viewpoint heard."
Reagan defends Utah's billboard laws. When it comes to taxing billboards as personal property, he argues that a billboard is the "instrument by which the intangible value of the location is tapped. The value isn't the billboard structure," it's the location, and often a billboard company is just leasing the location from a landowner. On the exception to the typical government method of phasing out unwanted land uses, he says it's "unfair to regulate a nonconforming use out of existence without compensation." On stretching damage calculations to include what happens to the corporation's entire "economic unit" when one billboard is removed, he compares it to a hypothetical High Country News losing subscribers in a key city such as Boulder, Colo. -- something that would affect the magazine's overall "desirability" when it tries to sell ads. (The Outdoor Advertising Association of America takes similar positions, saying that "amortization for removal of legal outdoor advertising structures is extreme and unfair.")
"City councils are posed with a very difficult task when it comes to regulating any industry that deals with real property and property rights and striking a balance with the needs of the local economy," Dewey Reagan says. Like many others in his industry, he also stresses the role of billboards in displaying public-service messages, such as Amber Alerts and ads honoring 9/11 victims and Iraq War troops.
Disputes have also erupted over a few of Reagan Outdoor Advertising's contracts with Utah landowners. Four contracts showed up in lawsuits that High Country News reviewed in state court in Salt Lake City. Three of the contracts -- signed by landowners in 1977, 1987 and 1990 -- described a 10-year lease of the land for those three billboards, in a clause near the top of the page; a separate clause further down the page automatically renewed the contracts for another 10 years, so they were actually for 20 years total; the landowner could cancel at the end of the 20 years, but if he didn't cancel by the deadline date, the contracts would apparently remain in effect even longer. Another contract, dated 2006, had slightly different wording, describing a 20-year lease that was automatically renewed for another 20 years, unless the landowner canceled before that renewal deadline. All four contracts had clauses stating that if the owner ever wanted to sell the land under the billboard, Reagan Outdoor Advertising had the right of first refusal -- it could step in front of a buyer and acquire the site by matching the buyer's offer. Even if Reagan allowed someone else to buy the land, the contract's terms would remain in effect on the new owner.
Reagan Outdoor contracts with that kind of wording make it hard for landowners to remove the company's billboards from their property. They also give the company leverage to buy key billboard sites or negotiate billboard "easements" that stay with the land if it is sold to someone else, according to Dansie in the Salt Lake City planning office. Reagan's lease payments varied depending on the locations and sizes of the billboards (and presumably the acumen of the landowners); in the 1977 contract, Reagan Outdoor Advertising paid the landowner $240 per year; the 1987 contract paid that landowner $142 per year; the 1990 contract was for $1,000 a year; and the 2006 contract was $142 per year.
Dewey Reagan declines to discuss contracts or other specific aspects of his business, including the neighborhood effort to negotiate with him to create a park where one of his billboards stands. The 1977 contract was part of a lawsuit in which Lorraine Miller, the owner of two adjacent stores that sold home and gardening supplies, attempted to oust a Reagan billboard from her parking lot. A previous landowner had signed the contract; Miller bought the lot in 1985 and tried to cancel the contract in 1987, because she thought it allowed cancellation after the first 10 years. Her lawyer argued that the contract's wording was "unconscionable and illusory," but she lost in court in 1988 because the judge found that the separate clause calling for an automatic 10-year renewal was clear. Miller had to live with that billboard for another 10 years before the contract was canceled and Reagan removed it.
"I was so angry," says Miller, who's now retired. The billboard's poles created a parking obstacle, and the aesthetics were bad for her stores' image, she adds. "People (who sign such contracts) don't realize, they're tying up their property in a way that will destroy the value of the property for 20 years." Miller has won several national business awards, including the federal Small Business Administration's National Small Business Person of the Year in 1994 (she traveled to the White House to receive that award from President Clinton); she's also held leadership positions in several Utah business groups including the Salt Lake City Chamber of Commerce. But when she tried to lobby the Utah Legislature against the pro-billboards bills, she says, "I couldn't even get a legislator to look me in the eye. I just could not get their attention in any way."
There are about 150 conventional billboards and six digital ones in Salt Lake City now, and their fiercest opponents can be found in the mayor's office and the planning office. The Salt Lake City government is constantly battling billboard corporations. On busy 600 South, a primary gateway from I-15 into downtown, for instance, Reagan Outdoor Advertising has a large billboard next to one of the newer motels, a Marriott Springhill Suites. When the city approved the motel, Reagan Outdoor complained that the motel's sign would block its billboard and wanted permission to raise its billboard to be 85 feet tall. The city decided instead to have the motel change the location of its sign. Then Reagan complained that the light poles in the motel parking lot blocked views of the billboard and reportedly wanted more than $1 million in compensation. (That dispute is still unresolved.) On his downtown billboards tour, Dansie points to another billboard site where, he says, zoning laws permit a 375-foot-tall office building. The combination of a billboard easement and the law against blocking views of billboards is keeping that lot occupied only by a one-story strip mall, however. Other downtown billboards are similar obstacles to downtown renewal, Dansie says: "The reality is, the outdoor advertising industry is suppressing development."
Mayor Becker, who often opposed billboards when he served in the Utah Legislature and the Salt Lake City planning commission in the 1990s and early 2000s, led the Salt Lake City Council to unanimously pass a nine-month moratorium on new digital billboards last April. In December, he proposed a compromise in a draft of new regulations: More of the traditional billboards can be converted to digitals, but only in certain areas, protecting key viewsheds, gateway streets, neighborhoods and historic districts. Many of the digital billboards would also go dark from midnight to 6 a.m., and for each conversion to digital, another existing nonconforming traditional billboard would have to be removed. It's another attempt to reduce the total number of billboards over time and give the city a little more control over land-use planning.
But Reagan Outdoor Advertising and other billboard corporations, along with businesses that advertise on billboards, oppose the city's attempt to limit digital signs; they packed a Jan. 3 City Council public hearing. Meanwhile, there are two new City Council members, Kyle LaMalfa and Charlie Luke, who beat incumbents who had voted against digital billboards. LaMalfa got a $1,360 campaign donation from Reagan Outdoor Advertising, the single biggest donation to his campaign; it was an "in-kind" donation, which likely meant campaign advertising space. And Luke has worked as a lobbyist for Reagan Outdoor.
Whatever regulations the new City Council passes, no one would be surprised if the billboards corporations again make an end run to the Utah Legislature seeking relief. The legislative session begins in late January, and one city staffer says the regulators are walking a fine line. "We know they're going to ask for (more backing for digital billboards) in the Legislature. We're trying to back off from a ban on electronic billboards, for fear that the Legislature would prohibit bans. We're hoping the Legislature won't retaliate."
"We're about to go into a major battle with the billboard companies" in this year's legislative session, says another insider who works on billboards issues for several Utah cities. "They essentially want to eliminate our ability to regulate."
Ray Ring is High Country News' senior editor, based in Bozeman, Montana.
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