CBS Outdoor Sues City, Seeks Millions in Compensation for Two Signs on Demolished Hollywood Building

Three signs at Hollywood & Highland complex, where original building with mural signs was demolished. The sign on the tower rents for $145,000 a month, according to rates published by CBS Outdoor.

In a lawsuit filed July 30 in L.A. County Superior Court, CBS Outdoor claims it is owed $2.23 million for two mural signs on a building demolished twelve years ago to make way for the Hollywood & Highland entertainment and shopping complex, even though the company now has 12 signs on the site that rent for more than $500,000 a month, according to data from a marketing brochure.

The city’s Community Redevelopment Agency (CRA) acquired the 12-story office building with the two mural signs through eminent domain in 1998 and demolished it shortly thereafter.  According to the lawsuit, the CRA entered into a relocation agreement to allow CBS Outdoor to install the signs on another building in the Hollywood redevelopment area, but didn’t approve the site that CBS wanted at 1025 N. Highland Ave., seven blocks south of the Hollywood & Highland project.

Nevertheless, huge supergraphic signs advertising various products appeared on that warehouse building as early as 2004, according to city records, and in 2006 the building owners were cited violating a ban on such signs.  Earlier this year, CBS Outdoor took the signs down in response to a cease-and-desist letter from City Attorney Carmen Trutanich.  See “Uncovered:  After Six Years, Giant Supergraphic Ads Finally Come Down.”

The 12  advertising signs at the Hollywood & Highland complex that was completed in 2001 were permitted by the terms of a development agreement between the property owner and the CRA, although they exceeded limits on size and height in the citywide sign ordinance.  The signs, most of which face Hollywood Blvd. and Highland Ave., total 15,000 sq. ft.

Despite the lucrative income from these signs, CBS Outdoor claims in its lawsuit that the two mural signs demolished along with the original building were vital to its business.

“CBSO’s presence in the community and overall viability as an outdoor advertising company was depending in part on the signs and their locations on the north and south elevations elevations of the premises’ building.”

The lawsuit further states that the city’s acquisition and demolition of the building with the signs has resulted in CBS Outdoor’s “loss of ability to provide complete or competitive advertising coverage in the Hollywood area” and “loss of income stream, and loss of business goodwill, including the benefits that accrued to CBSO as a result of the unique location of the premises and its reputation for dependability, skill and quality installing “tall wall” and mural sign media.”

That claim might appear peculiar, given the fact that CBS Outdoor now has six times as many signs at the same location generating at least a half million dollars in monthly revenue, and that it apparently maintained large illegal supergraphic signs for at least six years just a few blocks away.

CBS Outdoor is one of the largest billboard companies in L.A., with an estimated 1,600 billboards city-wide.  The company also holds the contract with the MTA for bus and transit advertising, and with the city–as a joint venture with JC Decaux–for bus shelters, public amenity kiosks, and other items of street furniture.

The Hollywood & Highland complex, which includes the Kodak theater that hosts the annual Academy Awards, is owned by CIM Group, which bought it from the original developer in 2004.  The project received $90 million in subsidies from the CRA for the intital construction, and earlier this year the City Council approved a $15 million loan to remodel the theater for a resident troupe of Cirque du Soleil.