Billboard Tax Proposes to Bring In $4.2 Million

Backers are seeking to place on the ballot a measure that would levy a seven percent excise tax on outdoor advertising and allow the possibility of tall wall signs in Weho.

A petition that will soon hit the streets of West Hollywood for signatures is proposing to levy an excise tax on outdoor advertising. Right now, only one building on Beverly Boulevard would be eligible for tall wall ads, but this initiative leaves open the possibility for more tall wall ads along Beverly and Santa Monica Boulevard. 

The initiative's sponsor, Sunset Strip Inc., submitted the "Tax Billboard Act," which proposes a seven percent excise tax on outdoor ad companies that lease billboards, video signs, tall walls or other off-site signs, said Mike McNeilly, who created Sunset Strip Inc. and brought forward the proposal. McNeilly also owns supergraphics company Sky Tag.

Sunset Strip Inc. was established about five years ago and was not formed just for the purposes of promoting the ordinance, McNeilly said. The company creates art murals; one was displayed in July at Comic-Con in San Diego.

"Sky Tag has no signage in West Hollywood and neither does Sunset Strip Inc.," McNeilly said. "Just because you're in the outdoor ad business doesn't mean you're against being in favor of the people. I thought this would be a great idea. In the past, I've made a lot of money from tall walls on the Sunset Strip, and I think the community should get something out of it too."

The initiative proposes to add $4.2 million a year to the city's general fund for maintenance and community services.

Councilman Jeffrey Prang, who opposes the initiative, sent an e-mail out to his supporters warning of the clause in the initiative that allows for potential tall wall signs to be constructed.

"It would basically allow unregulated placement of billboards and tall walls on some of the city's main thoroughfares without any local control or authority," said Councilman Prang in his email.

He called the clause a "Trojan horse" that would "allow some building owners automatic rights to install tall walls and other signage that they currently cannot install without going through an approval and permitting process."

The clause would make at least one building on Beverly Boulevard eligible for tall wall signage and leaves open the possibility of giving the right to display tall wall ads on future high-rise buildings on Beverly as well as Santa Monica Boulevard.

"[The initiative] is really just a corporate scam and an abuse and misuse of the initiative system," Prang said in an interview. "It's a company paying money to get something on the ballot and it's allegedly a public benefit. I think the benefit is untrue and the mission is clearly selfish. I think the people in West Hollywood are smart enough to see through these things." 

Extending the possibility of tall walls to an additional building does not constitute a "Trojan horse" in the initiative, McNeilly said.

"It's equal protection," he said. "Why should certain property owners have rights that others don't?"

McNeilly said he has brought the initiative to what he calls the Billboard Capital of the West Coast, with the thought that it would be a landmark case for other municipalities to follow.

"Seven percent is very reasonable when companies are making $60 million a year," said McNeilly. "If the community wasn't so great the advertisers wouldn't want to be there. There should be something for the people of West Hollywood. It's the right thing to do. Take it at face value or not."

Prang expressed concern over the constitutionality of singling out a specific industry for a tax.

"It sounds good but the city has explored taxing billboards for many years," he said.

Prang also pointed out that the proposed measure includes a severability clause stipulating that if any part of it is found illegal by a court the other parts will remain intact.

A similar measure is already in place in Philadelphia, after outdoor advertising companies challenged the city's installment of an excise tax but lost a request for an injunction, McNeilly said.

"If it's good enough for Philadelphia, it's good enough for Weho," he said.

Under California law, Tax Billboard Act proponents will have six months to collect signatures in time to qualify for the March 2011 municipal election. 

Julie Walmsley August 18, 2010 at 11:30 PM
Is Prang correct? Will legal language in the initiative allow advertisers to bypass zoning laws? I clicked on the link and did not see anything that said it would. It's hard to imagine marketers protesting a 7% increase when they will likely transfer the cost to their clients by simply increasing their rates. Will there be strict provisions as to how that money can be spent? Who will oversee the revenue from the excise tax?
Bob March 03, 2011 at 09:32 PM
Prang took Money from CBS outdoor which is in the huge sign business. How could he be correct. Why would anyone listen to his position? It's one sign company vs another sign company.


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