With the city of Los Angeles cracking down on many forms of outdoor advertising,
It's common for commercial tenants to put their names on office high-rises, but it's uncharted territory for a residential building, at least in Los Angeles, real estate experts said.
"Here in Southern California, I can't think of any residential units that have building-top signage," said Tim Miller, a
Condo owners at 1100 Wilshire Blvd. had an incentive to sell the space to Chase. They said they were facing a fee assessment of as much as $10,000 each to replace the building's aging elevator system.
The Chase signage deal, which starts at $17,500 a month, will bring in more than $2 million over 10 years, possibly enough to fix the elevators without charging homeowners, said Mark Tarczynski, a member of the association's board of directors.
Chase's motivations are simple.
With Southern California motorists trapped in heavy traffic, companies have long sought ways to reach them. They've plastered murals on buildings and hung banners and signs promoting movies, video games — even a plea for Dwight Howard to sign with the Lakers.
Super-sized ads on Hollywood buildings became so prevalent that Los Angeles officials cracked down a few years ago, suing building owners who refused to remove them and jailing one of them. Advertising companies installed digital billboards, until the city shut them down, saying they were too bright and distracting to drivers.
But the city does allow companies to put their names on office towers, so long as the company has a business presence inside.
That's what made the 1100 Wilshire building, a few blocks west of the 110 Freeway, appealing to Chase Bank. The building is approved for commercial use on the first floor and 230 residential condominiums above.
Chase plans to open a 2,500 square-foot branch in the building, giving it the opportunity to put its name on the top of the tower — in 9-foot high letters. The city has issued permits for the bank and the sign, Tarczynski said.
The bank's sign will be visible to tens of thousands of motorists who drive north into downtown every day.
It gives Chase a presence in a downtown skyline that includes prominent signs of competitors
"That's a pretty good deal for them," said George Belch, a marketing professor at San Diego State. "For marketers, it's all about eyeballs. In L.A., you're talking about people who are driving by, and could be driving slowly, so you have a lot of time to make an impression."
Not everyone feels the same way.
Joel Kassimir, a New York doctor who owns a penthouse unit on the building's top floor, said he was upset about the commercialization of the building and the effect the lighted sign might have on his view. He and his son, Spencer, who lives in the unit, filed a lawsuit in Los Angeles County Superior Court seeking to overturn the deal.
"There's going to be a big industrial sign lighted near their window," said the Kassimirs' attorney, Joshua Furman. "They're concerned about what that means to property value.... They'll be living in a bank instead of a luxury high-rise condominium with multimillion-dollar properties."
Los Angeles County Superior Court Judge Joanne B. O'Donnell rejected the Kassimirs' request for an order blocking installation of the sign. In a Sept. 4 ruling, she said the Kassimirs "failed to show that they will suffer irreparable or immediate danger" if the Chase name is installed on the building.
The Kassimirs are considering an appeal, Furman said. In the meantime, Chase is expected to begin installing the sign within a few weeks.
Billboard and sign controversies have popped up in cities throughout the country.
The cities of Seattle and New York have cracked down on building owners who installed ads, signs or billboards without authorization. In Milwaukee, the city approved a 122-unit apartment building with a digital billboard on its roof because
Saddled with some of the most expensive homeowner association dues in downtown Los Angeles — nearly $800 a month — the majority of 1100 Wilshire residents thought the financial opportunity was too good to pass up.
"I'm a financial conservative," said Bruce Johnston, who owns a unit in the building. "I take the money where I can get it, instead of trying to charge the residents additional fees for taking care of repairs that need to be made."
Homeowners voted 69 to 29 to add Chase's name to the building, Tarczynski said. "It's a phenomenal windfall for everybody," he said.
Miller, the Jones Lang LaSalle broker, agreed.
"I think it's smart," he said. "The downside is you run the risk of feeling like your attractive residential tower has become a walking billboard. But if it's one sign, tastefully done, and it keeps you from getting assessed, I think it's not a bad decision."