Coming Soon? More Freeway Advertising Signs in Downtown L.A.

Shaded area of downtown L.A. to be exempted from state sign laws.  Metropolis project site outlined in bright red.

Shaded area of downtown L.A. to be exempted from state sign laws. Metropolis project site outlined in red.

The Chinese developer of the Metropolis project now rising beside the 110 Freeway in downtown L.A. might be excused for wondering why there’s any fuss over its bid to exempt the billion-dollar retail, hotel and condo complex from a state law forbidding commercial advertising visible to freeway traffic.

After all, the company, Greenland Group, is headquartered in Shanghai, where brightly-lit Times Square-style signs make the city’s commercial areas every bit as bright—some might say garish—as such Asian neighbors as Tokyo, Seoul, and Bangkok.

And just to the south of that development, Staples Center and L.A. Live have created their own Times Square-like area with digital advertising signs and video screens intended to create an exciting atmosphere that will attract tourists and downtown entertainment seekers and persuade them to part with their money at sporting events, movies, concerts, restaurants and bars.

Artist's rendering of Metropolis project.

Artist’s rendering of Metropolis project.

The vision of the Metropolis developer and other downtown real estate and business interests is to extend that atmosphere from the L.A. Convention Center at the confluence of the 110 and 10 freeways all the way to the Wilshire Grand, another billion-dollar, mega-project now under construction on the south side of Wilshire Blvd. at Figueroa St. The South Korean company developing that project, Hanjin International, has already gotten approval for thousands of square feet of digital signage visible from city streets.

Staples Center and L.A. Live are owned by AEG, a U.S. company that is part of the business empire of Philip Anschutz, a Colorado billionaire recently listed as the 38th richest person in the country. Hanjin International is part of an industrial conglomerate that includes both an international airline and shipping company. Greenland Group owns coal mines as well as real estate developments in China and a number of other countries, and it reported a tidy $4 billion profit in 2014.

Despite this wealth, Greenland Group is seeking an exemption from the ban on freeway-facing off-site signage as a way to avoid asking taxpayers to help finance their project. Or so says State Assemblyman Miguel Santiago, who represents the downtown area and introduced the measure at the behest of the company.

According to a fact sheet accompanying the measure, “the ability to generate revenue via the use of near-freeway signage for off-site sponsors dramatically decreases the overhead costs of construction projects to taxpayers.” The fact sheet goes on to say that the measure is “an important step towards ensuring that current and future developments within the revitalized Downtown Los Angeles area will be able to tap into this increasingly critical financing source to backfill the decrease in public funding available for such purposes.”

Called AB1373, the exemption bill sailed through the State Assembly by a vote of 71-6 and is now pending in the State Senate. All assemblypersons with districts wholly or partially within Los Angeles voted with the majority.

Santiago’s fact sheet doesn’t go into detail about “public funding” available for such projects. However, Greenland Group, as well as AEG and Hanjin International, has already appeared as supplicant before the City Council, asking for financial aid in the form of a “subvention” of the city’s Transient Occupancy Tax, more commonly known as the hotel bed tax. In each case, the subsidy approved by the City Council granted a suspension of 50 per cent of the tax owed over a period of 25 years. That suspension could amount to a total of almost $40 million for the Metropolis project, and upwards of $350 million for all three developments, including the convention center hotel at L.A. Live that is already complete and operating.

The rationale for this dramatic reduction in revenue to the city from the tax is that the projects will more than offset the loss with revenue generated as a result of added jobs and retail activity. However, some have questioned the subsidies to deep-pocketed developers, wondering why the hotels considered a key element of the projects couldn’t have been built without this public assistance.

Neither Santiago nor the Greenland Group has put forth any estimate of how much revenue is expected from freeway-facing signs advertising such products as alcohol, cars, fast food, and movies and TV shows. And nothing has been publicly revealed about the number, size, and location of the signs.

This signage must be approved by the city, ostensibly through the vehicle of a sign district which will go through a public hearing process before the City Planning Commission. That body already approved a sign district for the nearby Wilshire Grand project, although it restricted off-site and rapidly-changing digital signage to interior streets. Since that project is now included in the area that would be exempt from state law under AB1373, it could seek amendments to add freeway-visibile signs.

Likewise, any other properties along the 10 block freeway frontage could take advantage of the exemption, if passed by the State Sentate and signed by the Governor.

To send a message to your state senator opposing this exemption, click here.

Dennis Hathaway

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