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Fight for Billboard Business Billions
Lawsuits allege city trying to take unfair advantage through regulations

By James Caldwell

At the end of October, the billboard company OTR filed suit in state court over a 2005 city law which requires permits for billboards within 900 feet of an “arterial highway,” or within 200 feet of parks one half-acre or larger. OTR’s suit claims these regulations amount to space surrounding more than 72 major highways, roadways, bridges and bridge approaches, and more than 1,000 parks. Several other companies, including Clear Channel Outdoor, have sued the city over the same law in federal court.

Council Member Melinda Katz (D-Queens), the chair of the Land Use Committee and the primary sponsor of the billboard law, called it “enforcement legislation.”

She said it was as an important anti-clutter and traffic safety measure that was prompted initially by complaints from constituents about the proliferation of billboards along the Long Island Expressway.

“We’re trying to upgrade the quality of life in the city,” she said. “People are always complaining that we need more enforcement, and we passed a piece of legislation that does that.”

She added that the legislation gave the Department of Buildings authority to enforce existing permit requirements.

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In 2003, Bloomberg created NYC Marketing, an office charged with, among other things, developing revenue-generating deals with outdoor advertising companies. As a result, some say the city is being subjected to so-called “ad creep,” or the increased presence of ads in public spaces.

“Mayor Bloomberg is really the minister of ad creep,” said Gary Ruskin of Commercial Alert, an anti-commercialism group. “He still hasn’t figured out that he’s no longer the head of a media company and is the mayor of a major city.” Billboards are of particular concern to commercialism watchdogs, Ruskin said, adding that regulations governing their placement miss the point.

“Billboards are an assault on the eyes and attentions of New York City residents, and they ought to be flat banned,” he said.

Four states – Alaska, Hawaii, Vermont and Maine – have banned billboards completely. Ruskin says that this, along with a 2004 poll (done by socio-economist Daniel Yankelovich), which found that 65 percent of Americans feel “constantly bombarded with too much marketing and advertising,” is proof that New York needs a different approach to outdoor advertising.

“People are fed up being hammered with ads every time they turn their head,” Ruskin said. — James Caldwell

Previously, the city had relied on voluntary compliance from billboard companies in obtaining permits. Katz also said the companies filing suit were consulted extensively when the legislation was being drafted. “There isn’t one billboard company that can say they weren’t heard,” she said.

All the plaintiffs in the billboard suits allege the regulations are unconstitutional on the grounds that they do not advance the city’s anti-clutter and traffic safety initiatives. In addition, lawyers for OTR claim that city-owned billboards are exempt from the restrictions, creating an unfair double standard.

“They are going to be the biggest violator of their own principles,” said Daniel Alter, a lawyer for OTR. “You can’t claim that the measure is intended to improve visual clutter, and in the next breath be panting because you’re nailing up more signs than anyone could possibly imagine.”

Alter said the new regulations amounted to a “scheme” designed to eliminate private advertisers, allowing the city to capture the majority of billboard revenue.

Since coming to office in 2002, Mayor Michael Bloomberg (R) has increasingly sought to tap into outdoor advertising revenue from various sources, including a non-billboard contract between the city and a Spanish advertising company, guaranteeing $1 billion to the city over 20 years.

Alter claimed that city-owned billboards can be and already are used for commercial advertisement. Some billboard companies contend that the current regulations give the city an unfair advantage when competing for advertisers. “It’s a serious concern when a governmental agency starts to corner the market on outdoor advertising space,” Alter said.

But the city stands by its position.

“There is absolutely no merit to these claims in the federal cases,” was the written statement response from Sheryl Neufeld, Senior Council with the New York City Law Department. She said the department was reviewing the federal suits, but declined comment on the OTR case in state court. She also noted that the city is temporarily not enforcing portions of the regulations that are being challenged by the plaintiffs.

Meanwhile, other elected officials have also called on the Buildings Department to enforce permit requirements and address illegal outdoor advertising. In August, Manhattan Borough President Scott Stringer (D) demanded action from the Department after a study by his office found widespread instances of illegal ads throughout Manhattan, mainly on building façades and scaffolding.

“I call it the ‘ad-anization’ of Manhattan,” Stringer said. “It is simply disgraceful.”

“I’m not suggesting that we turn Manhattan into Iowa or Montana,” he added. “But [advertising] is a form of pollution when carried too far.”

However, Stringer left open the possibility that currently illegal ads could be legalized if the city were given a cut of the revenue, a move that has the potential to increase the number of outdoor advertisements.

Currently, Stringer said, “it’s a financial gain for a few people.”

However, he added, “If someone wants to make the argument that we should allow for more advertising because it would be a financial gain for the city, than just say that.”