Los Angeles officials thought they were being generous last year when they agreed to allow Hollywood-based CIM Group to place three supergraphics, or oversized vinyl advertisements, on an office building on Highland Avenue.
Three months later, that same building has six supergraphics, twice as many as were approved by the City Council. CIM Group also has not removed two billboards from the building’s roof, as required under the agreement.
The situation has proved especially galling to some redevelopment officials, who point out that they have voted repeatedly to subsidize other CIM projects, approving $28 million in financial aid over the last six years.
“It makes me feel taken,” said Alejandro Ortiz, an appointee of Mayor Antonio Villaraigosa who serves on the Community Redevelopment Agency board. “Here we are working with these guys and . . . they’ve gone and completely disregarded what we agreed upon.”
The office building at 1800 Highland Ave. stands as a symbol of the city’s failure to gain control over unpermitted outdoor signs, even among companies that regularly seek financial help from the city. Enforcement has been complicated by a barrage of lawsuits by the advertising industry, including one filed by a company that places supergraphics on CIM Group properties.
Building inspectors said last week that they have begun investigating multistory images on six CIM-owned buildings in Hollywood, including 1800 Highland, which has three oversized ads for the movie “Frost/Nixon” and three supergraphics depicting the Statue of Liberty -- the calling card of SkyTag, a company seeking to strike down the city’s sign laws.
Last month, SkyTag asked a federal judge to stop the city from enforcing its sign laws at 118 locations, eight of which are CIM buildings, while its lawsuit against Los Angeles is pending. If a judge agrees, CIM could receive temporary permission for the multistory signs, which can generate up to $100,000 per month in advertising revenue.
CIM Group representatives had no comment on 1800 Highland and several other properties. In a brief statement, the company said: “CIM is not a party to or involved with the lawsuit between SkyTag Inc. and the city of Los Angeles, and therefore does not have any comment.”
SkyTag President Michael McNeilly contends that the city cannot engage in selective enforcement, prohibiting some signs while allowing others to go up in special districts such as Hollywood, where the redevelopment agency negotiates sign agreements.
In recent years, the redevelopment agency has helped CIM Group finance projects in San Pedro, Reseda and downtown Los Angeles. Meanwhile, the planning department is reviewing CIM’s request for a special sign district that would allow it to install up to 11 supergraphics at its half-built shopping center known as Midtown Crossing.
That project, on Pico Boulevard, is already slated to receive $14.3 million in taxpayer money.
Redevelopment commissioner Madeline Janis said her agency gave special consideration to CIM at 1800 Highland, allowing it to have three supergraphics instead of the two that normally would have been allowed. To get the extra ad space, CIM Group paid a $200,000 fee.
“I’m extremely disappointed in what they’ve done. I feel like that, potentially, I was lied to,” said Janis, who threatened to have the city invoke its “responsible contractor” ordinance, which could bar CIM from doing business with the agency.
CIM Group has already gotten into trouble over another Statue of Liberty supergraphic on the east wall of 7046 Hollywood Blvd., also known as the Hollywood Professional Building. CIM Group received a property tax break on the 1925 Gothic Revival office building after it promised to preserve the structure as a historical monument.
That agreement was thrown into jeopardy two months ago, however, when it allowed one of SkyTag’s Statue of Liberty supergraphics to be bolted into the building’s terra cotta tile walls. Within weeks, the city’s Office of Historic Resources sent CIM Group a letter that accused it of violating the contract that provided the tax break.
“It is important to emphasize that the penalty for contract cancellation is a fee of . . . 12.5% of the current, fair market value of the property, plus attorney’s fees,” wrote Lambert Giessinger, an architect in the preservation office. CIM removed the supergraphic.
Council President Eric Garcetti said he called CIM Group to demand that it remove the supergraphic from the historical building. But he was sympathetic about the company’s plight on Highland Avenue.
Although CIM Group won the council’s approval for three supergraphics at 1800 Highland Ave., it failed to secure the proper permits from the Department of Building and Safety before Dec. 26, the day a new 90-day sign moratorium went into effect in Los Angeles, Garcetti said. The moratorium was approved to give the council time to rewrite its outdoor advertising regulations in a way that would withstand a court challenge
One CIM tenant had less patience for the company, saying it disregarded its commitments when it installed the supergraphic on 7046 Hollywood Blvd. “CIM took the [city’s preservation program], used it to get millions of dollars in tax breaks, and then instead of adhering to the contract that it remain historic, they turned it into a massive modern billboard,” said Dan Bassett, who rents the building’s eighth-floor penthouse.
Bassett said he spent nearly two months trying to persuade CIM Group to remove the image, an effort that went nowhere until the city threatened a financial penalty. At one point, a CIM representative said the image had to stay up to protect the company’s investors, Bassett said.
Oddly enough, CIM Group’s backers include the city of Los Angeles, whose pension agencies have agreed to invest up to $115 million in the real estate company.
Although CIM Group said it is not involved in SkyTag’s lawsuit, some at City Hall question whether the company is hedging its bets, putting up unpermitted signs in the hope that they will be “grandfathered in” later.
Lobbyist Jerrold Neuman, who represents the Metropolitan Hotel in Hollywood, said a SkyTag representative called his client two months ago to suggest that a Statue of Liberty supergraphic go up on one of the hotel’s walls.
During the call, SkyTag said that the image would probably end up as a permitted sign once the moratorium ends, Neuman said.
DS Ventures, owner of the Metropolitan Hotel, did not agree to put up the supergraphic. The company has continued to work within the city’s sign approval process -- a decision that has had a financial cost, Neuman said.
“We’ve worked really hard to live within the rules and do the right thing, and have foregone a tremendous amount of income and revenue,” he said. “The city, in effect, rewarded people who were renegade.”