Should Signs be Regulated as Lighting Devices?

The answer is a very clear “no.” An article in Signs of the Times magazine explains that electric signs are not lighting devices, per se. Their purpose is not to provide light, but to provide messages. Thus, they should not be regulated as lighting devices. Electric signs need to be bright enough to be legible, but if they’re lit too brightly, then they become less legible. Thus, the sign industry has consistently provided electric signs with appropriate brightness, in order to serve their customers. The article explains these factors in much greater detail. You can read the entire article at http://www.nxtbook.com/nxtbooks/STMG/sott_201601/index.php#/66

CoSign Article Published in Signs of the Times’ March 2017 Issue

An article about the past and future development of the CoSign program, which promotes economic development in communities by uniting designers, fabricators and end users to produce better signs, has been published in the March 2017 issue of Signs of the TImes magazine. Authored by FASI Executive Director Wade Swormstedt, the article outline the three iterations of the CoSign program in the Greater Cincinnati area, and the genesis of the program being instituted nationally this year. You can read the entire article at http://www.signweb.com/content/cosign-goes-national  

Second FASI Scholarship Awarded to Texas A & M’s Madeline Hunter

The Foundation for the Advancement of the Sign Industry (FASI) has awarded its second $1,000 scholarship to a college student who is pursuing sign-related studies. Madeline Hunter, who is in her first year as a Master of Urban Planning student, will assist Dr. Dawn Jourdan, Executive Associate Dean of the school’s College of Architecture, in researching the sign-code development process. Hunter will interview planners nationwide about their creation and revision of sign codes.

FASI previously awarded a scholarship to Stephanie Onwenu, a junior at Michigan State University. FASI is offering these scholarships to member universities of the Academic Advisory Council for Signage Research and Education.   

What’s the Economic Difference Between a Perpendicular Doubled-faced and Single-faced Sign?

When a Pier 1 Imports store opened in Germantown, TN (a suburb of Memphis), in 1991, it was granted a permit for a sign that faced west-bound traffic. However, no signage was visible to west-bound traffic. A few months after the store’s opening, sales were 25% below projections, despite typical promotions, advertising and direct mailings.

Pier 1 subsequently surveyed 200 shoppers through a market-research firm about having a second sign. The responses were the following.

Are the signs helpful to you? 66% said “very helpful;” 31.5% said “somewhat helpful,” and 2.5% said “not at all helpful.”

Does the sign increase public safety? 93% said yes; 75 said no.

Does the sign affect aesthetics negatively? 91% said no; 5.5% said yes, and 2.5% had no opinion.

Is the sign more of a public benefit or a public nuisance? 90.5% said benefit; 5.5% said nuisance, and 4.5% had no opinion.

Expert appraisal determined that the gross annual income for the store would be $1.2 million with the second sign, and $1,020,000 without it. Store officials stated that overhead and the cost of merchandise being sold was $1,020,000 so, without the second sign, the store would generate no profit.

As for the community itself, Pier 1 estimated that, without the second sign, it would pay, city, county and state taxes of $76,080. With the second sign and increased sales, it would pay $104,229. Thus the tax-revenue difference for the town would be $28,000.  Presented with this evidence, Germantown officials readily granted a variance for the second sign. The full story about this variance appeared in the April 1992 issue of Signs of the Times magazine.

What Does Amortization Mean for Signage?

Amortization concerns the compensation for a sign that is no longer in compliance when a sign code changes. The theory is that, if a sign is allowed to exist for a certain period of time, the owner of it will recoup their investment before the sign has to be removed, which is a way of circumventing the “just compensation” portion of the 14th Amendment. The fallacy of this is explained in the following article, written by certified planner Richard Bass, that appears in The Signage Foundation website’s Research Library. http://www.thesignagefoundation.org/Portals/0/SFI%20Amortization%20Explained.pdf

An example of appropriate argument for just compensation occurred in Richfield, Michigan with regard to a Michael’s crafts store. Its rooftop on-premise sign, which functioned like a billboard, had been built in the 1950s by the prior tenant. In 1987, Richfield banned rooftop signs. A 10-year amortization was included in the sign ordinance, and the Michael’s sign was ordered to be removed in 1998.

For “just compensation,” three valuation methods were used: cost of replacement, the income approach and a market comparison. Estimates were that Michael’s would need to spend $825,000 annually to replace the advertising value of its rooftop sign. Factoring in a 10% annual return on investment, this would mean the cost of replacing the sign’s advertising value would be $8.25 million.

As for income, the sign was calculated to account for 20-30% of the store’s sales. Conversely, the loss of the sign would mean a 20-30% decrease in sales. This would account for $200,000 less profit annually. Given the additional loss of investment income, the potential loss was calculated at $2 million.

As for replacement cost, based on a square-foot lease rate for a different use, the loss was calculated to be $56,000 annually. With a 10% investment revenue, this would mean a los of $560,000. Faced with this evidence, the court determined Richfield would have to pay cash compensation. A settlement occurred out of court. A full report on these proceedings appeared in the December 1998 issue of Signs of the Times magazine.

Conversely, others have failed to show an economic loss due to amortization. One instance occurred in Ridgeland, Mississippi in 1999. The city passed a sign ordinance that restricted ground signs to 50 square feet and a height of 12 feet, with exceptions for signs located within 300 feet of the Interstate highway. The ordinance included a five-year amortization period, which meant that legally erected signs, which would now become illegal with the passing of the sign ordinance, could stay up for another five years. But then they would have to be taken down, and that time period would suffice as just compensation.

Five years later, numerous businesses — Shoney’s, Midas Muffler, Red Roof Inns — filed an appeal to keep their signs. They invoked the precedent case of Lamar Adv. of South Georgia v. City of Albany (1990). The appeal process lasted three years, but the sign ordinance was upheld. The appellants erred in not documenting the economic ramifications of their signs being taken down, which is something Lamar had done when it won its appeal. This case is detailed in the June 1999 issue of Signs of the Times magazine.

As of November 2016, exactly half of the U.S. states (and the District of Columbia) recognize amortization as a legitimate form of just compensation, and the other 25 do not.

SGIA Journal’s January/February Issue Features FASI Article on the Reed v. Gilbert Aftermath

Wade Swormstedt, the Executive Director for FASI, wrote an article for the SGIA Journal’s January/February 2017 issue entitled “Content Neutrality and Signs: The Reed v. Gilbert decision and the aftermath.” Although the actual article is only available online to subscribers, the basic copy is presented here.

On June 18, 2015, the Supreme Court of the United States (SCOTUS) unanimously agreed that a Gilbert, Arizona sign code violated the First Amendment freedom-of-speech rights of Rev. Clyde Reed and his Good News Community Church. The decision potentially made virtually all U.S. sign codes unconstitutional because of the concept of “content neutrality,” which concerns the regulation on signs based on what they say. Reed v. Town of Gilbert is undoubtedly the most important sign-related court case of the past 35 years.

The background

Rev. Reed’s church held its Sunday services at different facilities, so it needed temporary signs each week to announce the location and time of its service. The signs would be posted on Saturday and removed on Sunday. The Town of Gilbert cited him for exceeding the time limits in 2005. Reed filed suit, based on freedom-of-speech issues.

Between 2005 and the SCOTUS decision, of course, several of Reed’s appeals were turned down. A group called Alliance Defending Freedom took up Reed’s cause. (A more complete report on the entire sequence of events, in addition to some commentary from Cleveland State University law professor Alan Weinstein, was published in the August 2015 issue of Signs of the Times magazine. It can be read online in a digital edition at http://www.nxtbook.com/nxtbooks/STMG/sott_201508/index.php#/64.)

SCOTUS Justice Clarence Thomas noted the town exempted 23 categories of signs from needing permits. Three of these categories were Ideological Signs, Political Signs and Temporary Directional Signs Relating to a Qualifying Event (which characterizes Reed’s signs). Ideological signs could be a maximum of 20 square feet, with no time limits. Political signs could be 16 square feet (on residential property) or 32 square feet (otherwise) with a time limit of 60 days prior and 15 days after an election. The temporary directional signs were limited to 6 square feet with a 13-hour time limit (12 hours before and 1 hour after the event).

Verbatim excerpts from the Thomas opinion are as follows:

“On its face, the Sign Code is a content-based regulation of speech. We thus have no need to consider the government’s justifications or purposes for enacting the Code to determine whether it is subject to strict scrutiny.” (The 1980 Central Hudson SCOTUS case established the “strict scrutiny” requirement that states governmental restrictions are permissible if the governmental interest is “substantial,” if the restriction “directly advances” the governmental interest, and if the restriction is no more extensive than necessary.)

Thomas continued, “The restrictions in the Sign Code that apply to any given sign thus depend entirely (emphasis added) on the communicative content of the sign.”

What this means for sign codes

In other words, SCOTUS clearly showed that signs can’t be regulated differently, based on their content. Quite often, the definitions in a sign code are more important than the regulations themselves. Typically, these definitions are fraught with discrimination. A red flag should arise when any sign code has dissimilar regulations for such things as political signs, real-estate signs, religious-organization signs, etc. The ONLY way to distinguish these signs is the CONTENT; thus, dissimilar regulations favor one type of speech over another.

In contrast, a sign code that stipulates different regulations for banners, projecting signs, freestanding signs, etc. IS content neutral, because the message on the sign isn’t a factor.  As SCOTUS Justice Samuel Alito cautioned, in a concurring opinion, “This does not mean, however, that municipalities are powerless to enact and enforce reasonable sign regulations.”

Additionally, most sign codes violate the content-neutral concept much more for temporary signs than for permanent signs. Additionally, while temporary signs are already difficult to regulate, the more restrictive the regulations for permanent signage, the more likely that people will resort to using more temporary signs, which exacerbates the temporary-sign conundrum.

Planners’ reactions

Expectedly, the Reed decision immediately caught the attention of city planners — the people who write local sign codes. The American Planning Association (APA), which has more than 35,000 members, held its annual National Planning Conference in April 2016. Planners deal with myriad civic issues, so signs are typically a very minor, yet often perplexing, concern. The annual APA conference typically offers more than 150 sessions, and only 1-3 are related to signs.

However, the 2016 conference’s April 4, 10:30 am session, entitled “Regulating Signs after Reed v. Town of Gilbert,” attracted more than 500 people and ranked #4 out of the 170 sessions, reported Professor Weinstein, who was one of the four speakers in the session. James Carpentier, who serves as the manager of state and local government affairs for the International Sign Association, was instrumental in having the session placed on the docket. He served as the moderator of the session.

Another speaker, Wendy Moeller, formerly served as president of the Ohio chapter of the APA. Last year, Moeller conducted a survey of cities nationwide and produced a report called Best Practices in Regulating Temporary Signs. (Her full report, as well as an executive summary of it, can be found on The Signage Foundation website (www.thesignagefoundation.org).) In the aftermath of Reed, Moeller revised the study and co-authored, with Professor Weinstein, “Practice: Temporary Signs,” in the February 2016 issue of Zoning Practice.

Writing sign codes presents numerous obstacles for city planners, because the vast majority never received any collegiate instruction related to signage. Thus, planners typically seek existing sign codes, at least as a starting point, to write their own codes. But, as a subset of overall sign codes, the regulation of temporary signs is even more challenging, thus Moeller’s research provides some guidance in two ways.

Court reactions

In its May 2016 online edition, the Harvard Law Review, in an article entitled “Free Speech Doctrine After Reed v. Town of Gilbert, wrote, “In Thomas v. Schroer,79×79. 116 F. Supp. 3d 869 (W.D. Tenn. 2015). the District Court for the Western District of Tennessee found that a sign code distinguishing between off-premises and on-premises signs was content based.” HLR continues by saying the federal government is worried enough about Reed that it filed an amicus curiae (“friend of the court”) brief with regard to the Federal Highway Administration’s Highway Beautification Act (HBA), which has governed billboards within 660 feet of the federal highway since 1965 in various iterations. Such briefs offer related perspective to a case in which the provider isn’t directly involved. HLR said a challenge to the HBA is “inevitable.”

In Springfield, Illinois, a prohibition of pan-handling signs had been upheld. After Reed, the decision was overturned by the same court. HLR wrote, “Rather than limiting the amount of protected speech subject to government regulation, Reed requires legislatures to regulate all speech in order to regulate any speech.” In other words, cities may subsequently be more restrictive of ALL signs in order to not be too restrictive on a few.

Soon after the decision, an August 15, 2015 New York Times article stated, “The court struck down a South Carolina law that barred robocalls on political and commercial topics but not on others. Last week, a federal judge in New Hampshire relied on Reed to strike down a law that made it illegal to take a picture of a completed election ballot and show it to others.”

End users’ reactions

In the shadow of Gilbert, the city of Chandler was sued in August 2016 by the Goldwater Institute, which is currently representing five businesses, including three shopping centers. Although the suit stemmed from a dispute about setback and property lines, it blossomed into a broad-based, legal challenge holding that Chandler’s sign code is “impermissibly vague” and alleging that it “imposes an unconstitutional prior restraint and is unequally and arbitrarily applied.” It specifically references Reed v. Gilbert and says Chandler’s sign code imposes different rules based on signs’ “communicative content.”

The Goldwater Institute website explains: “The City of Chandler—right next door to Gilbert— imposes different rules for signs based on what they say, and who is saying it, in direct contradiction to the Supreme Court’s Town of Gilbert ruling. Chandler’s sign code forbids some signs, requires permits for others, and allows still others without any permit—all depending on what signs say. The code divides signs up into 11 different categories based on the messages they convey, and imposes different size and location requirements to the different categories. Thus no permit is required for “political signs,” “grand opening signs,” or “residential real estate” signs, but a permit is required for “development signs,” “subdivision direction signs,” and “non-residential real estate signs.”

Meanwhile, in nearby Tucson, the 1985 sign code will probably be significantly revamped early in 2017. Changes in definitions based on content neutrality are likely to occur, but the triumvirate of Dark Skies, the Sierra Club and Scenic Arizona are resisting any changes. In the interim, a sign company trying to retrofit a legal, nonconforming, fluorescent sign with an electronic message center (EMC) is being denied. EMCs are allowed in the sign code.

Less than a month after the Reed decision, three counties in the metro Atlanta area – Cherokee, Forsyth and Hall –ad opted moratoriums so they could re-examine their sign codes. Similarly, in Garfield Heights, OH, the Supreme Court reversed a pre-Reed decision that had sided with the city, concerning the removal of a sign, placed on a lawn, that criticized a local councilwoman. In Norfolk, VA, Central Radio Co. revised its suit against the city, which had demanded that Central Radio remove a sign that criticized the city for enacting eminent domain and taking its property.

The general aftermath

Robert Niles, writing for Bloomberg BNA’s The United States Law Week (April 18, 2016 edition), said, although Reed could conceivably be interpreted to mean that strict scrutiny (which stems from Central Hudson) would apply to all speech, lower courts were still making a distinction between commercial and non-commercial speech, and applying intermediate scrutiny to commercial speech.

He writes: Nowhere in Reed does the court suggest that it intended to upset commercial speech doctrine: Reed doesn’t discuss Central Hudson or other of the court’s commercial speech cases.”

Niles continues: “Though Reed will certainly have substantial impact on free speech doctrine in challenges to regulations of non-commercial speech, the first wave of lower-court decisions suggests that reports of the death of government regulatory power in the face of First Amendment challenge after Reed were greatly exaggerated.”

In other words, cities, although reticent at first, will continue to write sign codes with whatever level of restriction they prefer, but they will have to be more careful. Instead of defining signs by content, they will probably define them by physical characteristics. This doesn’t, in any way, infringe free speech.

Again, the general fear for the sign industry is that cities, worried about being inconsistent, will simply place restrictions on ALL signs.

Summary

The Goldwater Institute has produced an article called “Heed Reed,” with a subtitle of “Guideposts for Amending City Sign Code’s.” The 2600-word document can be obtained from the institute. Here are its summary suggestions for establishing sign codes post-Reed.

“In light of Reed and changes in state law, local sign codes around the state must be revised. Doing so need not be difficult, so long as the guidelines set out in this report are followed. Following these guidelines will not only protect free speech, but will also lead to simpler sign codes that are easier to follow and enforce, and protect taxpayers from costly and time-consuming lawsuits.

·         If a sign code requires enforcement officers to read a sign to determine whether it violates the code, the code is probably content based and violates the First Amendment.

·         Commercial messages cannot be treated differently than other types of messages.

·         Signs must be allowed in public rights-of-way.

·         Sign walkers cannot be restricted from holding up signs on public sidewalks.

·         Sign codes must be easy to understand, and (a) clear standards that do not allow enforcement officials to pick when to enforce the restriction, (b) a definite time limit within which a permit will be granted or denied, and (c) an opportunity for meaningful judicial review in the event the permit application is denied. Cities should avoid permit requirements whenever possible.

·         If a municipality determines that removing or allowing a particular sign is integral to traffic safety, it must provide clear evidence that justifies its determination.”