Lost Revenues: City Balks as Billboards Overrun Poor Areas

By: Laurie AbrahamChicago is losing the fight against billboard blight in poor, minority neighborhoods because the city has failed to enforce building end zoning laws.

A Chicago Reporter survey of billboards on major streets in 15 diverse community areas found more than 600 lacked the permits required by the city building code - nearly a third of the signs counted. This means that revenue hungry Chicago loses thousands of dollars a year in permit and annual inspection fees, yet the city does not have an aggressive program either to pull down illegal billboards, or to make sign companies pay, the Reporter found.

The city's neglect is felt most acutely in low-income black and Hispanic neighborhoods. In East Garfield Park,a black neighborhood where three-quarters of the residents are low-income, 78 percent of the billboards, the Reporter found, did not have permits. In two other areas with high poverty rates, West Garfield Park and Grand Boulevard, more than 60 percent of signs lacked permits.

Local billboard companies appear to be doing their best to preserve the status quo. Mayor Richard M. Daley and influential City Council members received $45,553 in campaign contriutions and free sign space from March 1988 to May 1990, a Reporter analysis of Cook County campaign records showed.

"The billboard industry has a long history of attempting to buy influence with public officials," said Edward McMahon, executive director of Scenic America, a national anti-billboard lobby. "To the extent that they are providing a lot of money to public officials, they want something in return."

After the Reporter made repeated calls and Freedom of Information requests concerning billboards, the Daley administration on Oct. 31 introduced an ordinance prohibiting signs advertising tobacco and alcohol within 200 feet of schools, parks and playgrounds. The industry already has a voluntary standard of 500 feet, though it is not always followed. State Sen. Miguel del Valle (D-Chicago) plans to reintroduce legislation in January to ban billboards within 1,000 feet of schools.

Health Hazard
To the general public, cigarette and alcohol billboards may be no more than an eyesore, but to activists in Chicago's minority neighborhoods, they are a scourge. Their biggest worry is that children are succumbing to the admaker's lure.

Maria Elena Bahena, who lives and works in Little Village, said she was motivated to pin the anti-billboard campaign by the reaction of her 5-year-old daughter to the nattily-dressed cartoon camel that pitches Camel cigarettes on billboard ads. She said, "'Oh, mommy, he looks so cool.' All the kids want to be cool. This camel's got this nice tux, a nice girl, a nice car," recalled Bahena, a drug-abuse prevention specialist.

Community groups have contended that the proportion of "butts and booze" billboards is much higher in low-income areas than in more affluent ones. But the Reporter survey showed that the percentage of billboards pushing cigarettes and liquor was roughly the same among the neighborhoods surveyed - from 40 percent to 55 percent. The difference is that while billboards dot middle-income, white areas, they choke low-income, minority areas.

There were 266 signs per person in the eight, poor minority communities, compared to 1,293 per person in the five white areas.

In the predominately white areas, which had an average poverty rate of 11 percent, the number of signs ranged from 19 in Norwood/Edison Park to 57 in Brighton Park. But black neighborhoods with poverty rates higher than 40 percent averaged 207 billboards; the high was Englewood's 271, the low Roseland's 142. The two poorest Hispanic areas also each had more than 200 signs.

The billboards that overrun minority neighborhoods are the relatively small, 12-foot by 6-foot signs that can cost as little as $750 to install but earn their owners $1,500 a year. Two of the companies that specialize in this type of sign, called an "eight-sheet," are the biggest violators of permit laws: Gateway Outdoor Advertising and United Advertising.

The Reporter counted 1,009 Gateway signs in the 15 community areas surveyed, but Gateway has less than half that number of permits. In Grand Boulevard, for instance, the Reporter found 107 Gateway signs, but the company has only 33 permits. In East Garfield Park, the Reporter found 146 Gateway signs but only 14 permits in city records.

The survey turned up 184 signs owned by United Advertising, but the company has only two billboard permits for the entire city.

For Gateway alone, the city has lost tens of thousands of dollars in revenue. Gateway estimated that it has 4,200 small billboards in Chicago, but the Reporter found only 1,544 permits. So if the company obtained $22 permits for all of its unpermitted signs today, the city would be about $60,000 richer. But the loss is really much greater than that. Nearly all of Gateway's signs have been up since at least 1988. Taking into account that fees for permits and renewals increased in 1989, the city should have collected a total of $116,000 in permit fees and renewals from Gateway alone.

Small Signs Ignored
City codes require that billboard companies submit a permit application to the Department of Zoning before erecting a billboard. If the proposed location of the sign is within the commercial and manufacturing areas that are generally zoned for billboards, zoning officials usually will forward the application to the Department of Building's electrical inspections section.

Electrical inspections assigns a permit, and a sign inspector must visit the site within a year to ensure that the billboard has been erected safely. Subsequently, inspectors are supposed to check billboards annually and collect a $16 fee assessed by the city Department of Revenue.

But those regulations often fall by the wayside when it comes to small billboards. While Department of Zoning Commissioner Graham Grady rightfully boasted that his office has re moved more billboards and issued more zoning violations this year than ever before, his progress is dwarfed by the pool of illegal signs. Of the 35 violations his department issued in 1990, 12 resulted in the removal of signs; five are pending in court; and 18 have not been resolved.

The zoning department does not regularly inspect billboards but responds to community complaints. "If nobody is complaining about a sign, is it really important?" Grady asked.

The electrical section, however, is charged with annual billboard inspections. But its small staff of four sign inspectors cannot track down and ticket every sign without a permit, said Tim Cullerton, chief of electrical inspections. His main concern is making sure signs are safely erected.

Indeed, it has been Cullerton's policy not to issue no-permit violations for small billboards that hang on the sides of buildings, the kind most common in poor neighborhoods. "If [sign companies] flood the city with illegal signs, there's not that much we can do," he said.

Evidence of that abounds in Chicago's poor minority communities. In these areas, at least 20 percent of the signs the Reporter found were missing permits. In middle-income, white areas, the number of billboards differed only slightly from city permit records.

Pfleger Power
The only exception to the pattern was Auburn-Gresham, home to a predominately black and poor population. Only 23 of 247 signs there lacked permits. That's because local activists have been trying to eliminate liquor and cigarette billboards. One of their controversial tactics has been to paint over offensive signs. "The billboard companies have responded because they've lost a lot of money from painted billboards," said billboard activist the Rev. Michael Pfleger, pastor of St. Sabina's Catholic Church, 1210 W. 78th Pl.

Both Cullerton and Zoning Commissioner Grady said they had responded to Pfleger's complaints by sending inspectors to his area to ticket signs that violated permit and zoning laws. The result is that Gateway Outdoor Advertising, which has the most small billboards in the city, has obtained 63 permits in Auburn-Gresham, more than it had in the previous 10 years combined.

Dead with Pleasure
Billboards like ones that show an elegantly dressed black couple "[Canadian] Mist Behaving," or a grinning black man "Alive with Pleasure" in the company of two pretty women and a package of Newports, are the kind that community activists loath.

"The image that billboards portray is that the way to success is a cigarette in your mouth, and a drink in your hand," said Paul Kelly, one of the anti-billboard movement's leaders and director of substance abuse prevention at the Bobby Wright Mental Health Center in East Garfield Park. "We have to change attitudes in this community; it's vital to our survival."

Nationwide, blacks die from lung and other smoking-related cancers up to 71 percent more often than whites, according to the National Institutes of Health. Liver cirrhosis, which usually results from alcoholism, claimed 84 percent more blacks than whites.

Smoking-related cancer rates in Chicago are not available, but the highest death rates from cirrhosis before age 65 were recorded in three of the poorest black neighborhoods the Reporter surveyed. For instance, the highest premature death rate from cirrhosis - 36 deaths per 100,000 people - was logged in East Garfield, where 77 percent of the population lives in poverty. Among the areas surveyed, the lowest cirrhosis mortality figure, 5.6 deaths per 100,000, was in Edison Park on the Northwest Side, an all-white area where only 4 percent of the population is poor.

Billboard company executives said they are only responding to market forces by putting tobacco and alcohol ads in areas where the products pose the biggest public health threats. "Companies are interested in selling their product to whatever demographic [group] is buying it," said Stephen Shinn, vice president of the Gannett Outdoor Group in Chicago, which owns many small signs here but has a good permit record. "If they wanted to reach people in Lake Forest, they might advertise in Town and Country [magazine]."

Cigarette and alcohol manufacturers have responded to sales declines and increased competition by targeting specific market segments, industry analysts say. Particularly attractive targets are blacks and less-educated people whose smoking and drinking habits have not dropped as precipitously as those of other groups.

Repeat Performance
Gateway and United are not a new problem for the city building department. In a May 13, 1983, memo to building and zoning officials, electrical inspections chief Cullerton wrote "Inspectors from this office, as well as licensed sign contractors, have apprised me of the fact that the Gateway Advertising Company is involved in ongoing installations of small, non-illuminated advertising signs all across the city and without permits. An informed contractor has told me that as many as 3,000 signs were installed in 1982 alone, and that hundreds more are installed each month....This is detrimental to those who are abiding by the ordinances and the City is losing an unknown amount of revenue."

No action was ever taken on the memo, Cullerton said. And today, he says, "We could probably assign inspectors year-round to investigate Gateway."

Gateway community relations manager Inez Macko said that when New Jersey-based Heard Communications bought Gateway this summer, it was unaware of the permit problem. The Re porter found that close to two-thirds of the company's 4,200 billboards did not have permits. Gateway is in the process of updating its permits, she said.

As for United, Cullerton said the president and owner of the company, Widen Williams, has repeatedly promised to get permits but never followed through.

Reached on his car phone, Williams said he had no comment on the company's large number of outstanding permits. When asked if he was surprised by the Reporter's findings, he hung up. Despite daily calls, the Reporter was unable to reach Williams again.

The history of the electrical department's responsibility for billboards -lighted or not - exposes the roots of the city's enforcement problem.

Twelve years ago, when Cullerton was still an electrical inspector, the Chicago Sun-Times published its "Mirage" series. The series revealed, among other things, that though the city code required all outdoor signs (from billboards to the small wooden signs that swing in front of corner taverns) to have permits, the building department was not bothering to process applications for non-electric signs.

In response to the series, then-Building CommissionerJoseph Fitzgerald announced that his electrical inspections unit would handle all sign permits until a special program was put in place to take care of non-illuminated signs, Cullerton said. But the program was never created.

Since then, the electrical inspections unit has done a hit-and-miss job of regulating billboards. Even when Cullerton's small team of sign inspectors finds time to issue no-permit violations, the citations are usually empty threats. "Failure to comply with said ordinances within 10 days," the tickets read, "will result in the removal of the sign and/or ... starting of a civil suit against the user of the sign."

Two-thirds of the time, sign companies ignore such notices and do not attend building department compliance hearings, Cullerton said. Billboards without permits rarely are removed because the city does not want to pay for it. And their owners are rarely prosecuted because electrical inspections spends its limited time in Cook County Circuit Court pursuing violations that endanger public safety, such as faulty wiring in buildings, Cullerton said. So unresolved permit tickets usually are put into a "default file" and forgotten, he said.

As a result of the Reporter's inquiry, however, Cullerton said he has begun to exercise an enforcement power the department has not used recently.

In late October Cullerton sent a letter to Gateway demanding that the company comply with city codes, or risk revocation of the $25,000 bond that sign companies are required to post with the city.

He also ordered United to provide a list of all the signs it owns. Since United never posted the required bond, Cullerton can't threaten to keep it, but he said that if the company fails to respond, the city will take it to court.

And Building Commissioner Daniel Weil said a new enforcement bureau will be instituted in 1991 to remove code violations from the clogged court system and instead handle them administratively.

It's too early to tell whether the city's get tough stance will produce results, but an incident this summer illustrates the blatant disregard many billboard companies have for the city's code enforcement.

Electrical inspections received a complaint in late August about an illegal sign advertising Coors beer that was being painted just off the Kennedy Expressway, near Elston Avenue. The sign did not have a permit; in fact, it violates zoning regulations because it is less than 500 feet from the expressway, Cullerton said. In addition, this was not the first time Image Media, the company that owned the sign, had been cited for a sign at this location. Cullerton sent an inspector to visit the site on Friday, Aug. 24, and the painters agreed to stop the job.

The following Monday morning, as Cullerton was driving south on the Kennedy, he looked over his shoulder and saw that the sign had been completed.

A Nov. 14 compliance hearing has been scheduled for Image, and a company spokesman vowed to attend and try to comply with city rules. "But we don't want to be the only one to come into compliance out of the hundreds and hundreds of signs that are not in compliance," added Mike Scheid, who described himself as one of the company's shareholders.

Meanwhile, the Coors sign may earn as much as $9,000 a month for Image Media, according to estimates from local ad agencies.

Unpaid Bills
The city has another enforcement problem. Each month, the city revenue department sends the electrical inspections unit a massive list of signs with outstanding annual inspection fees. The report includes six years worth of unpaid warrants, and for 1988 alone, it ran 149 pages, with more than 8,000 entries. Many of the unpaid bills represent small amounts owed by individuals who obtained permits to hang a sign or two outside their businesses. Billboard companies are fairly up-to-date on recent payments, but Patrick Media Group, the owner of most of the city's larger signs, owes $20,000 for more than 400 billboards dating back to 1987. And Foster & Kleiser, a sign company purchased by Patrick in 1986, owed about $20,000 for l984-1987.

Though the revenue department has so far focused collection efforts on bigger unpaid bills, it plans to pursue Patrick's outstanding warrants, said revenue spokesman John Holden.

But building chief Weil admitted that the sign billing system is so laden with errors that it's impossible to know whether Patrick owes as much as city records indicate.

Paul Sara, Patrick's vice president and general manager, said that his company was current on its accounts and blamed the city's record-keeping for the $20,000 discrepancy. Patrick was not responsible for any of Foster & Kleiser's pre-1986 warrants, he said.

Even if city records were more accurate, bill collection traditionally has not been a high priority for electrical inspectors, Cullerton said. "I honestly don't have time to sit down and do a detailed survey of what companies are paying and what companies are not."

To address billing inaccuracies, Weil said that in 1991 the building department will begin sending notices to companies asking them to verify the locations of their signs.

Billboard Bounty
Even if the permit problem is solved, community groups will be no closer to reaching their goal of reducing the number of alcohol and tobacco signs in the city. To achieve that, the City Council must change laws either to further limit areas where billboards can be placed, or phase out outdoor advertising of cigarettes and liquor altogether.

A 1982 article in the billboard industry publication Sign of the Times spoke to the difficulty of this task. "It would be difficult," the article read, "for the mayor (or any other politician) to sponsor or support anti-billboard legislation or ordinances if he/she has been actively using outdoor advertising for their own projects."

During the last two years, Chicago politicians received more than $40,000 for their "own projects," namely political ads to help them get elected, the Reporter found.

Mayor Daley received the most contributions - $35,303 - from the billboard lobby. Almost half that sum came from free billboard space donated by United, the company that has only two permits citywide. In addition, Daley received $4,200 in cash and $8,000 in sign space from Patrick.

Ten aldermen on committees that determine billboard regulations received a total of $10,250 in 1988-1990 campaign contributions. Ald. Fred Roti (1st), the chairman of the zoning committee and a member of the building committee, re ceived $2,900. Other top-grossing aldermen in cluded: zoning committee members Ed Burke (14th), $1,250, and Bernard Hansen (44th), $850; building committee member Robert Shaw (9th), $1,200, and Committee on Streets and Alleys member Patrick Huels (llth) $1,500.

The zoning and building committees aren't likely to push for billboard restrictions, said Ald. Lawrence Bloom (4th). "Billboards are powerful interests," he said. He said that his attempt to amend a substitute sign ordinance to ban alcohol and tobacco advertising was thwarted on the City Council floor in July.

Though couched in terms of "protecting the health and well-being of Chicago's youth," the billboard measure Bloom tried to amend will have little effect on the number or permit status of small signs in poor communities.

But ordinances sponsored by Burke, Ald. Juan Soliz (25th) and Ald. Allan Streeter (17th) could make a difference. Soliz's and Streeteis proposals to ban all alcohol and tobacco bill

boards have been sitting in the streets and alleys committee for several months. Burke's or dinance would ban tobacco signs and cigarette vending machines citywide; a second hearing on it is slated for November.

Another ordinance proposed by Soliz, to freeze the construction of all new signs, is also awaiting council action.

Politicians are not the only ones who benefit from free billboard space. Sign companies often try to deflect criticism by donating space to charitable organizations, billboard opponents charge. They point to Gateway's recent donation of 200 billboards to Mothers Against Gangs, whose president, Frances Sandoval, works for Ald. Soliz. But he told the Reporter the contribution will not influence him.

Gateway's gift to Mothers Against Gangs came after a Sept. 19 meeting between the company and black and Hispanic community groups turned into a shouting match. The groups had expected Gateway to promise to decrease what they termed the "saturization" of alcohol and to bacco billboards in their communities.

Instead, Gateway proposed to pay community groups a 15 percent commission to sell billboard advertising to companies they want to advertise in their neighborhoods. In other words, Gateway said it would remove tobacco and alcohol billboards as long as the community groups could sell replacement ads. "They tried to buy us off, co-opt us," Kelly said.

Free Ride?
In other parts of the country, the outdoor advertising industry has been attacked for not paying its fair share of property taxes. That battle may be coming to Chicago.

In Jacksonville, Fla., for instance, an effort to reassess billboards that were significantly un dervalued or not listed on the tax rolls may bring in $1.9 million in back taxes this year. Similarly, a 1989 investigation by the Raleigh News and Observer revealed that hundreds of billboards in North Carolina were not on the tax rolls, and many more were undervalued. A subsequent change in the state's tax code is expected to bring in millions of new revenues.

Both Florida and North Carolina have a category of taxes called "personal property," which includes billboards. Other types of personal property can include airplanes, large manufacturing equipment and boats - essentially any property not nailed to the ground.

Chicago has a different situation. The Illinois legislature abolished its personal property tax in 1979. But assessors in DuPage County's York, Naperville and Lisle townships have found an other way to collect revenues by taxing the value billboards add to land. This means landowners, not sign companies, would be responsible for the extra tax, though they probably would pass on their increased tax burden to sign owners.
Such a tax would generate the most money from medium and large billboards on major routes, which generally earn $30,000 to $100,000 in annual ad revenue. Billboards near O'Hare International Airport reportedly get more than double that amount.
York Township Deputy Assessor Mike Sovereign said assessing his area's 38 billboards garnered $60,000 in new taxes in 1989. If his system were ever to come to Chicago, that amount would be multiplied many times since a company like Patrick has close to 3,000 medium and large billboards here.

"The owners of billboards apparently have fallen through the cracks. Homeowners have to pay a higher amount [in property taxes] because the billboard companies are not paying," said Patrick Quinn, a candidate for Illinois state treasurer and a former member of the State Property Tax Appeal Board.

Patrick and National 3-M Advertising are appealing York Township's assessment to the tax appeal board. They argue that billboards were considered personal property before the state tax was abolished and that the Illinois General Assembly determined that personal property could not be converted into real property.

Others say that billboard owners cannot use that defense because they never actually paid personal property taxes on the signs.

But a spokesman for the Cook County's tax assessor's office, Dick Vanecko, agreed with the billboard companies' claims. Even if taxing billboards were possible, he said, "it would be an administrative nightmare."

"It's not a burning issue around here," Vanecko said.

Charles Floyd, the former president of the anti-billboard lobbying group Scenic America, said the real issue was whether billboard companies should be exempt from any taxes whatsoever. "Why should a business that depends wholly on the use of the roadways for its income not pay taxes?" he asked. "A trucking line may not pay personal property taxes on its trucks, but it sure pays a lot in road-user fees."

Paul Davis, a Chicago anti-billboard activist, was more graphic: "How many ways are we going to let billboard companies take revenue from poisoning us?"

-Research Assistant Lisa Capitanini and intern Aurelio Huertas Jr. helped research this article.