WILMINGTON — Wilmington hates billboards. Staff loathes them; city council would do away with them if they could.
At the same time, billboards provide the city with a continuous public benefit with massive financial savings.
Through a special arrangement with a large billboard company, the digital advertiser gives the city and New Hanover County valuable ad space for free (that’s why you’ll frequently see public Covid-19 messages, election information, hurricane warnings, financial assistance programs, foster care needs, etc. displayed around town).
If the advertiser chose not to feature public service announcements, it’d have to display digital ads every 15 seconds, as opposed to the exempted 8-second rotation offered in exchange for providing public messaging space on a permanent basis, per city code.
Shorter ad times mean higher revenue for the company. So even though it’s missing out on hundreds of thousands of dollars in revenue by giving local governments free ad space, it’s still able to book more clients in the rotation.
The exchange isn’t technically a requirement — but it may feel like one for some billboard companies. Grey Vick, owner of Grey Outdoor LLC, described the arrangement as such to the city’s planning commission last month. “Typically on a digital sign, we would obviously like to run the most amount of slots in there,” Vick said.
Mark Stocks, general manager of Lamar Advertising in Wilmington — the national firm that owns the majority of billboards in town — said the company’s partnership provides local governments with a valuable service.
“Under that provision, because we want our signs to have the ability to change every 8 seconds, we provide a public service,” Stocks said.
The value of one 8-second ad slot in Wilmington that appears roughly once a minute over a four-week time period is about $1,000 to $3,000, according to Stocks. Quotes vary depending on which billboard ads appear on. City or county messages are permanently displayed on all 16 of Lamar’s digital billboards in town. This equates to roughly $208,000 to $624,000 in revenue the company is giving up.
The city and the county work exclusively with Lamar, according to their respective spokespeople (the company owns all but one of the city’s digital signs).
While the exchange isn’t an uncommon practice in the industry, Stocks said the city’s billboard regulations are among the strictest he’s seen in his 32-year career in the business. “Wilmington has a very restrictive ordinance,” he said. “For some reason, billboards and signs bring out a lot of passion in people.”
Tuesday, Wilmington City Council strayed from its staff and planning board’s 5-2 recommendation for denial by unanimously approving an amendment to the outdoor advertising ordinance. The change will allow four billboards to relocate elsewhere in town with the option to digitize. Staff opposed the proposal on the basis that it increased the number of digital signs in town, contributing to clutter and possibly introducing hazardous distractions for drivers. Council approved it on the basis that the change would incentivize the sign’s removal from gateway areas of the city.
“Billboards themselves are — they’re a land use that is dependent solely on the public infrastructure surrounding them,” zoning administrator Kathryn Thurston explained to council Tuesday. “The use would not generate any revenue if not for the roadways that they’re visible from.
“And that’s public dollars serving that private interest.”
Pressured Hooters out
The public-service advertising exchange arose out of the city’s mid-2000s attempt to get rid of the glaring Hooters billboard that, for years, greeted drivers just as they exited the Cape Fear Memorial Bridge and crossed into city limits.
City officials realized they couldn’t legally force the owner to remove the sign, so they worked out a compromise to prohibit billboards in certain high-traffic “gateway districts,” while permitting advertisers to covert the signs to digital, if they agreed to move them. The city’s gateway districts are located along Wooster and Dawson streets downtown before reaching the 17th Street intersection, a short section of Third Street near the Isabel Holmes bridge, and a portion of North College Road before the Market Street intersection.
Technically, billboards have been banned in city limits since 2008, with their relocation out of gateway districts and into “receiving zones” permitted through a grandfather clause.
Regulating the signs is a tricky local endeavor.
“Commercial speech may not have the same protection as core, first amendment political speech does, but it still has protection,” city attorney John Joye told council.
The city can’t force the removal of a billboard without fairly compensating the owner, pursuant to a combination of state and federal laws that protect sign owners. Instead, the city has pressured their removal or relocation through compromise and incentives.
Grey Outdoor LLC requested several changes to the city’s billboard code in an attempt to “level the playing field.” The company owns only two billboards in town. One, visible from Third Street next to the 1898 Memorial Park, attracted unprecedented attention in recent months. Donning a “TRUMP 2020” slogan, the billboard appeared to violate federal law because it failed to disclose a disclaimer showing who paid for it. Prominent protesters from the Lowercase Leaders were arrested in late October for allegedly damaging the sign, ripping it in half.
Though it’s right next to one of the city’s gateway districts, the downtown sign technically fell outside of the official designation. Grey Outdoor asked the city to change its definition of “gateway” to include signs visible from the district (which staff later narrowed down to defining as being located within a 250-feet distance of the district). Relocated gateway signs (four meet the new definition) may be placed in the city’s receiving zones (select sections of Market Street, South College Road, Oleander Drive, Shipyard Blvd., and Carolina Beach Road). The signs must keep the same square footage but may convert to dual-sided with two smaller sign faces.
Represented by the law firm Lee Kaess PLLC, Grey Outdoor also sought to allow smaller billboard companies to digitize their signs. Before the city adopted Tuesday’s changes, digital signs were limited to billboard companies that owned three or more signs. These billboard owners are eligible to upgrade 40% of their signs to digital, per the 2008 changes.
Now, just the four new gateway district signs that choose to relocate are exempted from the 40% ownership rule, allowing smaller operators to digitize. The exemption does not apply to gateway signs that already relocated.
Besides Lamar, the only other digital sign in town is owned by Tedder Media Management. In 2015, city staff accidentally approved an application Tedder submitted to digitize his sign off Eastwood Road near the Racine Drive intersection. By the time the city realized its mistake and issued a stop work order, Tedder had already spent more than $250,000 on the upgrade.
As an owner of just one sign, Tedder was granted a variance to keep it digital in 2016.
“They’re really an unnecessary blight on our corridors,” Thurston told council, explaining staff’s aversion to digital signs. “The aesthetics, the distraction, the potential public safety issues and they’re advertising for things that aren’t located on the same site that they are. They contribute to sign clutter and don’t have the same redeeming qualities that an on-premises sign would.”
Councilman Neil Anderson reminded Thurston of how frequently the city takes advantage of digital signs to display its own messages. “We’re contributing to the clutter is what I’m getting at,” he said. “We’re kind of playing both sides.”
Responding to Thurston’s assessments, Mayor Bill Saffo cut to the chase.
“I see your passion about it, but I have to say: These signs are protected by law. And they’re protected by state law. If we could do away with the signs, I can guarantee you, we would have done away with them. But with no compromise, we’re not going to get rid of this sign,” he said.
Thurston warned council that digital billboards created hazardous driving conditions for drivers. When asked, she could not cite specific evidence to back up the claim.
Studies on the topic have mixed results. One found digital signs lure longer glances, but the extent the glances exceed 2 seconds (a general benchmark for when the risk of collision increases) remained uncertain.
Amy Schaefer, former assistant city attorney, representing Grey Outdoor on behalf of Lee Kaess, cited a 2012 Federal Highway Administration study. That study concluded while digital signs attract more attention, they don’t impede a driver’s focus on the road ahead.
Addressing concerns about beautification, Schaefer argued the high-traffic roadways are already cluttered. “There’s already a lot of things that take your eye away from the aesthetics,” she said. “All he’s asking for is a level playing field.”
City attorney Joye said he was comfortable with the changes, which gave the four near-gateway district signs more leniency and an incentive to relocate.
“In my opinion, our current code — not this amendment — but our current code, Wilmington walked right to the edge of the limit of its authority in restricting these signs,” he said. “You are as restrictive as I believe you have the authority to be.”
Tuesday’s changes didn’t impact Lamar’s operations. Stocks said he felt “neutral” about the decision.
“We’re monitoring the situation and want to make sure our interests are not in any way damaged in this situation. It was a surprising evening for me,” he said. “But I guess the city really wants to get those signs removed.”
Send tips and comments to Johanna Ferebee Still at email@example.com