planning ahead
Finally, an Answer on Billboard Rights
by M. Brett Gladstone
Editor’s Note: This is the second installment of a two-part article on property owners’ rights concerning the general advertising signs (billboards) that media companies construct on property owners’ buildings. The first part can be found in the January 2008 edition of this magazine.
I last reported that two SFAA members, Tony Lee and Linda Erkelens, won decisive victories against international media conglomerate Clear Channel Communications when the San Francisco Board of Appeals voted to revoke the permits Clear Channel took out to remove billboards from their buildings. In its action to remove the billboards, Clear Channel, without authorization from the property owners, stated to the city that the owners intended to abandon their right to display general advertising at the properties. It did so because the property owners refused to accept Clear Channel’s under-market lease rates and wished to negotiate a lease with the company’s competition. Because the board put off consideration of their written Findings to a later date, I was not able to report on the final result in my first article back in January. Clear Channel used that later Findings hearing as an opportunity to attempt to relitigate the matters already settled at the first hearing. Adding a further challenge to maintaining the victory at the first hearing, the composition of the board commissioners changed during the period between the Revocation hearing and the Findings hearing.
At the Revocation hearing, the board voted unanimously to revoke the permit. At the Findings hearing, only three of the five board members approved the Findings because the board composition had changed.
At the first hearing, the concurring vote of four members was required to rescind the action of a city department. For the adoption of Findings in support of that rescission or revocation, only three concurring votes were required. Despite the vote of two commissioners in favor of Clear Channel, the Findings in favor of SFAA members Lee and Erkelens were adopted and, henceforth, property owners who would seek to increase their sign rental income by switching tenants will have that right.
In the Lee case, Clear Channel pulled a permit to remove the billboard from the property without Lee’s authorization. The Lee case stands for the proposition that property owners can replace their billboards when the billboards have been removed from their property by their sign tenant without owner authorization. Some billboard companies take down a billboard because the tenant and the property owner could not come to terms over rent. Or it could be that the billboard company was having difficulty renting the ad space and decided to deprive the property owner of possible future rent from a competing outdoor general advertising company. The Lee case also stands for the proposition that the right to have a billboard runs with the property, not the sign company.
I believe that it is now possible for a property owner to obtain governmental approval to reconstruct a billboard if the billboard is taken down by the tenant billboard company either without a sign removal permit, or with a permit, but without property owner approval. Each case is different and, if an an owner now wishes to sppeal a sign removal permit issued more than 15 days ago, most likely the property owner would need to seek the Board of Appeals’ approval for the late filing of an appeal request. The appeal would be to set aside an alteration permit (issued more than 15 days before) that allowed the removal of a sign structure or wall sign without the property owner’s authorization. Generally speaking, a property owner would have 15 days (from the date the permit to remove the sign was granted) to file an appeal of the issuance of the permit. If the facts of the case show that the billboard company did not get authorization from an owner in removing the sign, the board may grant jurisdiction, even though the removal permit was issued more than 15 days prior to the filing of the jurisdiction request because the owner will successfully claim that he or she didn’t know of the sign removal permit. If you believe that a sign tenant has improperly caused an abandonment of your right to display general advertising at your property, it is important to act soon to seek relief from the Board of Appeals.
In a related matter similar to the Erkelens case, my firm is working with a client to replace the current billboard structure on the client’s property. The current structure was placed on the building by another international media conglomerate. The structure is a danger to others near the property owner’s building. The media conglomerate refused to repair the billboard. The property owner is seeking city permission to deconstruct and replace the billboard structure. A new general advertising company will: pay for the construction of a new and much safer sign, allow the property owner to approve the installation plans and pay substantially higher rent for the general advertising space than the prior sign tenant.
Clear Channel has now filed suit in Superior Court in both the Lee and Erkelens cases to seek a disapproval of the Board of Appeals’ decision. The City Attorney’s Office has a responsibility to defend the Board of Appeals’ decision in court. It is unclear how Clear Channel could win the appeal because, under the San Francisco’s Business and Tax Regulation Code, the Board of Appeals has broad discretion to consider the facts at hand and apply principles of equity and fairness to come to a just result.
These have been exceedingly difficult, but important, cases. It was a pleasure to work with the staff of SFAA to defend small property owners against the San Francisco legislative actions that can deprive property owners of important rights.
The opinions expressed in this article are those of the author, and do not necessarily reflect the viewpoint of the SFAA or the SF Apartment Magazine. The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. M. Brett Gladstone is a partner in the San Francisco real-estate law firm of Gladstone & Associates, and can be reached at 415-434-9500. Copyright © 2008 by Black Point Press. All rights reserved.