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Firm tackling outdoor advertising legal issues

Jackson — There are a large number of legal and regulatory issues involved in the outdoor advertising industry and the outdoor advertising practice group (OAPG) of Watkins Ludlam Winter & Stennis (WLW&S), P.A., provides assistance ranging from drafting ordinances to lease agreements for outdoor advertising companies across the country.

“The OAPG of WLW&S has had a long and sustained commitment to the success of the outdoor advertising industry,” said Mark D. Herbert, who along with attorneys Jodi Anthony Moscona and Lisa A. Reppeto make up the OAPG. “Our members have more than 45 years experience in representing the interests of the industry. Members of the OAPG have represented national, mid-size and smaller outdoor operators in over 45 states and have served as general counsel for a state chapter of the Outdoor Advertising Association of America (OAAA).”

Herbert said their specialized representation includes condemnation, legislative and ordinance drafting and negotiation, challenges to regulatory takings, combating efforts to enact oppressive permit fees and/or ad valorem taxes, testimony before city and county boards and state legislatures and mergers and acquisitions involving large and small companies operating across the country.

Nationally, the industry is dominated by three of the largest companies: Lamar Outdoor, Viacom and Clear Channel Communications.

“Those largest players are doing a lot of acquisitions,” Herbert said. “They are buying out a lot of the mid-sized to smaller companies. The acquisitions raise a lot of issues about buying and selling of permits.”

In Mississippi, there are also a number of mid-size and smaller companies whose market share is growing.
Herbert said the issues with outdoor advertising are the same whether you are in Mississippi, Virginia or Montana.

“There are condemnation issues, permit issues, zoning and sign ordinance issues,” he said. “We think our expertise will transcend any state lines and help companies wherever they are.”

Critical issues for many businesses

For certain businesses, outdoor advertising is their primary source of advertising. What the outdoor industry calls directionals — directions on how to get to businesses such as hotels, gas stations and restaurants — are very important to the success of certain types of businesses, particularly in metropolitan areas.

Herbert gives an example of how the lack of directional advertising can be a negative both for would-be customers and businesses. The City of Norfolk, Va., outlaws all outdoor advertising. Herbert recalls landing at the airport in the middle of the night, and looking for place to eat.

“We couldn’t find a restaurant,” Herbert said. “We kept going off on side streets — some of which weren’t in very safe areas — because there were no directions.”

The OAPG has drafted and successfully lobbied for the adoption of favorable sign ordinances in numerous cities and counties.

“Almost every city is going to have some type of zoning ordinance, and some will have specific subsections that are a sign ordinance,” Herbert said. “There is a tension, but a desire to cooperate between the industry and zoning officials, city councils and boards of aldermen. They obviously have a desire to control advertising, put it in the right zones, and make sure there aren’t too many signs. The outdoor industry doesn’t oppose that. Too many signs are bad for them, too. But occasionally some entities want to do away with all outdoor advertising.

“We are able to sit down with city councils to see how we can both achieve our ends: reasonable regulations against too many and too big billboards, while allowing industry to still have the right to do business in areas where the billboards should be allowed. We try to help them draft ordinances to meet the needs.

“There is a lot of case law about what is permissible legislation regarding outdoor advertising. It comes out of the U.S. Supreme Court because an ordinance can end up limiting free speech, which is protected under the U.S. Constitution. Sometimes the industry may have to litigate to stand up for their rights. Sometimes it is necessary to challenge city ordinances.”

The OAPG has also represented outdoor operators in numerous condemnation actions. Outdoor advertising companies obviously want to be located on highways and streets that are high traffic areas. But because they are located in such high traffic areas, there is likely to be a lot of highway widening and reconstruction. When city, county, state or federal agencies are doing a widening project, property used for the billboards can be taken by eminent domain. Usually removal of outdoor advertising structures is required.

“Historically there has been a big fight between outdoor advertising businesses and the right-of-way agencies regarding the value of the property taken,” Herbert said. “In the 1960s, a lot of those governmental entities took the position there was no value. But, a series of case decisions across country held that when the government required removal, there was a taking of something of value.”

Herbert said there can be disputes on how to value the structure, and it can amount to a lot of money. A simple case can mean hundreds of thousands of dollars to the outdoor advertising industry. The OAPG has successfully challenged, through both litigation and negotiation, regulatory taking efforts.

The specialized practice group also advises small and mid-sized operators on lease and real estate transactions to both erect and maintain outdoor structures. The industry operates generally by leasing space along a roadway from a property owner, and paying the landowner monthly or annual lease payments for the right to erect signs there. Occasionally, like any other real estate driven business, there are disputes.

“The outdoor business likes predictability,” Herbert said. “They like to know that a lease in Tunica County is going to be given the same interpretation as one in Hancock County. They want the language to be fair to both sides, but also predictable. Issues come into play after the lease ends. For example, the landowner might say it is his sign and outdoor company says it is their sign. If a billboard has to be taken down early because of a highway expansion project, the lease can also determine who gets compensation from the right-of-way agencies.”

OAPG has also defended outdoor operators before vegetation control boards seeking to void state highway permits based on alleged violations. Billboard structures can last upwards of 50 years.

“When you first put a billboard on the ground, there might be nothing but grass there,” Herbert said. “Then in 10 years there might be pine trees blocking the view. You need to have authority to remove the trees.”

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.


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