Willamette Week| News| Politics

City officials want to go to trial against the billboard industry this week in a case they're almost sure to lose in a big way: The city may have to pay up to $1 million in damages and approve 83 sign permits it has denied.

As crazy as it seems, city officials view this kamikaze strategy as the best way to protect their billboard regulations in the future.

Although Multnomah County Circuit Court Judge Michael Marcus ruled in pretrial motions last week that the city's sign ordinance was unconstitutional, and therefore "void and unenforceable," the city is pushing on like Ken Starr.

There are three reasons for this stubbornness.

First, the city's running feud with the billboard industry has escalated to all-out war.

"There are people in City Hall who have a complete ideological hatred for billboards and the medium of outdoor advertising," says Len Bergstein, a consultant for AK Media, the Seattle-based company that's taking the city to court this week.

"It's hard for the city, psychologically, to concede anything," agrees Chris Thomas, a former city attorney who now represents another sign company.

Second, even if the city loses this time, it has reason to hope--based on recent decisions by the state appeals court--that it might fare better at the next level.

Third, and most important, the city believes that losing this case--but standing firm--is the best long-term strategy against the billboard industry. "I think there's truth to that statement," says City Commissioner Jim Francesconi.

Historically, the city has found it very difficult to regulate the sign industry. The city last went to court against AK Media (then known as Ackerly Communications) in the mid-1980s and was beaten badly--mainly because the Oregon Constitution grants extraordinary protection to all kinds of speech, including billboard advertising.

Rather than pay huge damages to Ackerly, the city decided to make a 10-year deal with the sign company that gave its 612 billboards a virtual monopoly in Portland.

Stinging from that blow, the city came back in 1996, when the deal expired, with a new ordinance it thought would handcuff the billboard industry. The ordinance said nothing about content--as the state constitution required--but it limited billboards to 200 square feet.

The city appeared to put the industry in check because the smallest billboards were 288 square feet in size. But industry officials warned that the clampdown wouldn't stand. Outdoor advertising was too popular and successful to suppress, they argued.

Sure enough, giant wall signs started showing up on blank building walls ("Attack of the 50 Foot Hefeweizen," WW, Sept. 10, 1997). The city was now in a bind: Because its rules had to be content-neutral, it had to treat the giant wall ads the same as it would the neighborhood murals sprinkled around the city.

Confounded, the city imposed a moratorium on wall signs while it pondered the dilemma. But the moratorium itself would prove an Achilles' heel. As the city tried to distinguish between murals and ads, it included in the moratorium a definition of signs that was based on content.

AK Media seized the opportunity. The company applied for 83 large signs and warned that if the city rejected the applications, AK Media would sue to invalidate the city ordinance.

The city denied the permits, and AK Media sued in early 1998. The city cleaned up its ordinance three months ago, but it was too late to win the case against AK Media--and perhaps four other lawsuits that the company had filed earlier.

Still, the city believes its ordinance is now strong, if not foolproof. So even though it might lose millions in the current cases, the city stands to cripple the billboard industry over the long haul--if it resists the temptation to dilute its ordinance by striking the kind of deal it did in 1986.

It's not an easy urge to resist--and it might not prove such a smart move either. History has shown that it's nearly impossible to limit billboards in Oregon. That history was repeated again last week when a federal judge ruled against the city in yet another case--this one concerning video billboards.

Francesconi, the only lawyer on the City Council, thinks the city should explore some kind of settlement with the sign industry. "It strikes me that they keep suing--and they keep winning," says Francesconi.

He says he's concerned about the loss of taxpayer money, the need for small business to advertise and the constitutionality of the city's current sign ordinance. Francesconi wants to see if a deal can be brokered in which the industry would drop its legal claims in exchange for a limited number of new signs.

Consultant Bergstein says AK Media welcomes a deal. "I've worn out my knee pads asking each city commissioner to be reasonable," says Bergstein. "It's very important to reach some resolution before the court acts this week. Because once the court case starts, it obviously chills the ability for the parties to reach what is essentially a political solution."

The decision rests in the hands of Mayor Vera Katz and Commissioner Charlie Hales, adds Bergstein, because those two have led the city charge against the sign industry.

"We're waiting to hear from the titans," he says. "It's as simple as that."

The titans aren't talking, though--at least not to the press. Katz did not return WW's calls on the subject, and Hales referred calls to City Attorney Jeff Rogers, who says he won't discuss pending litigation.

Bergstein and Francesconi expect negotiations to continue right up until the trial on Feb. 18. "My hope is that they will have learned that they should work with us rather than impose a hammerlock," says Bergstein, "because every time they do that, they end up dislocating their own shoulders."

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Willamette Week | originally published February 17, 1999