Legal issues

City council changes the sign code to reverse digital billboard prohibition

In November 2021, Millcreek City Council voted to approve a deal with Reagan Outdoor Advertising that allowed Reagan to build, own the digital digital screens, and then operate the one digital billboard that is currently at the Millcreek City Center (i.e. Millcreek Common) 24/7 for the next 40 years. As you can see from the pictures, Reagan is currently able to sell ad space to third-party vendors on a digital billboard located at Millcreek Common just above a prominent sign that says "Millcreek Common" and below an smaller, but still prominent sign that says "Reagan." CLICK HERE to see the terms of the signed agreement.

To make the 2021 deal legal, the City Council also voted to amend the city's sign code in order to carve out an exception to the city's digital billboard ban in order to make the Reagan/Millcreek City Center deal legal and to make a few other seemingly innocuous minor tweaks Mayor Silvestrini's staff had recommended, such as entirely deleting the universally accepted definitions of "on-premises sign" and "off-premises sign" (known universally as a “billboard”), which had clearly set forth the differences between the two legal terms, and inserting a novel and entirely misleading definition "district sign" to describe what is in fact a digital billboard, destined, at the time, to be installed on 3300 South.

Recent landmark Supreme Court case upholding a city's right to ban digital billboards

In 2022, not long after the Reagan/Millcreek City Center deal was struck, the United States Supreme Court (SCOTUS) dealt a massive blow to the outdoor advertising industry and a much welcomed victory for scenic beauty and public safety advocates in City of Austin v. Reagan National Advertising. In that case, Reagan filed an application with the City of Austin, TX to digitize existing, traditional billboards, but its application was rejected because it was a billboard (i.e. off-premises sign) and not a sign that advertised a business, service, or activity that was located on the site where the sign was located (i.e. "on-premises sign"). Reagan sued, arguing that the city’s sign code distinction between billboards and on-premises signs violated the First Amendment. In this landmark case, the SCOTUS affirmed the city's right to prohibit new off-premises digital billboards or digitization of existing billboards while still allowing digital on-premises signs, so long as the justification for the prohibition is to further a "significant governmental interest" (i.e. ensuring public safety, for example) and that the sign code is written specifically (i.e. narrowly and not too broadly) to achieve its stated goals.

After the SCOTUS issued its pivotal decision in Austin v. Reagan, the case was kicked back to the 5th Circuit Court of Appeals, which in 2023 reversed its prior ruling in light of the new guidance given in SCOTUS's decision. The court upheld the city's sign code restrictions on digital billboards that have different rules for on-premises and off-premises sign (i.e. billboards) after finding that the restrictions put in place were to advance the city's interests in "traffic safety and esthetics" which are recognized as substantial governmental goals. The sign code was written specifically to achieve such goals.

More recently, in Adams Outdoor Advertising v. City of Madison, the 7th Circuit United States Court of Appeals relied on Austin v. Reagan to reject an outdoor advertising company's challenge to Madison's prohibition on digital billboards. In its decision upholding the city's prohibition, Chief Judge Diana Sykes noted: “City of Austin resolves this case. Billboards by their very nature can be perceived as an aesthetic harm. Likewise, the connection between billboards and traffic safety is too obvious to require empirical proof. It does not take a double-blind empirical study, or a linear regression analysis, to know that the presence of overhead signs and banners is bound to cause some drivers to slow down in order to read the sign before passing it.”

The mayor's staff has notably failed to even acknowledge the landmark Austin v. Reagan case in its staff reports prepared for the Planning Commission and City Council in support of it's bold request to fast-track approval for a substitute sign code (yes, a complete substitute/replacement - not a red-lined version of the existing code) that would greenlight the plan the mayor's staff hatched with Reagan back in 2021 to have two more (for a grand total of 3) Reagan digital billboards clustered within a one city block boundary of Millcreek Common.

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Legal victories spur cities to strengthen sign code against digital billboards

We are happy to report that although the waves resulting from the Austin v. Reagan victory have not yet been fully felt or realized, the victory has certainly emboldened the now more than 700 towns and cities across the country that have imposed prohibitions on digital billboards. It has also motivated countless efforts to strengthen sign codes to further protect against the outdoor advertising industry's relentless efforts to convert their existing static, conventional billboards to new digital billboards that are far more lucrative but more damaging to communities.

Mayor's staff is proposing a weaker sign code instead of making it stronger

But . . . we are concerned that Millcreek is missing the boat because the mayor's staff is focusing too much on its effort to fast-track the approval for the two additional Reagan digital billboards that were nixed from the 2021 Reagan/Millcreek City Center deal and not focusing enough on tightening up the city's sign code to better protect Millcreek. In late January 2024, the mayor's staff circulated to Millcreek's community councils a newly drafted sign code intended to make changes in the existing sign code that would, among things, allow for the construction of two additional digital billboards at the Millcreek City Center.

We have serious questions about the recent Staff Report presented by the mayor's staff to the planning commission in support of the newly proposed substitute sign code and newly revived Reagan/Millcreek City Center deal. The Staff Report is troubling because it:

• makes no mention of Austin v. Reagan and does not advise the planning commission as to whether the city's existing sign code and the proposed substitute sign code have been drafted in a manner that would allow either to withstand a potential constitutional challenge by Reagan should Millcreek deny an application seeking to convert one of its existing traditional billboards to digital in the future;

• proposes Millcreek adopt a substitute sign code without providing a red-lined version of Millcreek's current sign code for comparison where redlining is the only standard accepted protocol for amending code as it provides transparency and the necessary history and clarity for legal interpretation and any future litigation, yet does not explain why it is using a legally unsound method to amend a critical and highly-contentious section of its code;

• doesn't explain why the proposed substitute sign code does not restore the definitions (and there for the distinction between) on-premises and off-premises signs (i.e. billboards) that were rashly stricken from the sign code back in 2021 where the justifications provided back in 2021 for removing the definition - even if legitimate in 2021 - are not valid because they were based on legal concerns that are now moot due to the landmark SCOTUS ruling in Austin v. Reagan that squarely addresses the distinctions between on-premises and off-premises signs and ruled based on those distinctions;

• is silent as to how Austin v Reagan may help inform the city regarding strategies and options for amending the sign code to strengthen the city's digital billboard ban, while also optimally insulating it from future legal challenges to the greatest possible extent. For example, it doesn't explain why the proposed substitute sign code keeps the same the sentence - "It is the policy of Millcreek to reduce the number and combined square footage of billboards where feasible" - in its Section 18.68.170 as is found in the current sign code's Section 19.82.185 in light of Austin v. Reagan that requires a city's restrictions on digital billboards be justified by its stated interests and goals. To avoid any confusion after Austin v. Reagan, the sentence should be amended to read something more like this: "It is the policy of Millcreek to reduce the number and combined square footage of billboards where feasible and where it does not conflict with Millcreek's traffic safety and aesthetics goals";

• does not identify one single potential legal risk or discuss potential legal or financial exposures (good or bad) relating to the proposed substitute sign code. This includes the risk of keeping/reaffirming the Billboard Bank - a novel program Reagan (according the Millcreek's Assistant City Manager) has claimed is unconstitutional and only one other city in Utah, Salt Lake City, has in place. Click HERE to read a 2022 Utah Third District Court decision involving Salt Lake City's Billboard Bank in a case where Reagan sued Salt Lake. Click HERE to read why Salt Lake City's Planning Commission and City Attorney have both recommended their city discontinue the Billboard Bank. Click HERE to see why Reagan says they want Millcreek and Salt Lake to continue their Billboard Banks;

• Most remarkably and curiously, unlike the report the mayor's staff prepared for the 2021 Reagan deal, the 2024 staff report does not include any legal updates or analysis - biased or otherwise.
  

City decision-makers need to SLOW DOWN and get impartial and transparent legal analysis before adopting the proposed substitute sign code

We think at a minimum it is essential that the city council be provided an impartial written legal analysis that clearly identifies the relevant legal issues and potential legal implications of greenlighting (or not greenlighting) the proposed substitute sign code that reaffirms some existing provisions that may expose Millcreek to future litigation and authorizes two more Reagan digital billboards being advocated by the mayor's staff. We also think it is more than reasonable to insist that this critical legal analysis be provided in a manner that is transparent and free from the appearance of self-dealing and conflicts of interest and before the mayor's staff asks for any further formal input or action on the part of the planning commission or city council.

It is simply not wise to change the city's sign code or to enter into deals that directly impact a sign company that is well known for its litigiousness (i.e. Reagan Outdoor Advertising) without first identifying and openly discussing and addressing the legal issues involved and the potential short and long term legal ramifications.

Check back later for more information about legal issues surrounding the proposed substitute ordinance and digital billboard deal, including conflicts of interest and the Billboard Bank. In the meantime click HERE for more information related to conflicts of interests involving the mayor, city council, staff, and Reagan Outdoor Advertising that raise serious concerns about the process, undue pressure on staff, public perception and exposure to future litigation.