exercised approvals Council 3 RECOMMENDED 4 FISCAL 1 SUBJECT Outfront the owner ofa Avenue 2 SUMMARY date

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Russell Townsend
5 years ago
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1 SUBJECT Relocation Agreement with Outfront Media LLC for the replacement of a traditional billboard toa digital LED billboard locatedat the SR 55 Freeway and Katella Avenue 2 SUMMARY Outfront the

1 1 SUBJECT Relocation Agreement with Outfront Media LLC for the replacement of a traditional billboard toa digital LED billboard locatedat the SR 55 Freeway and Katella Avenue 2 SUMMARY Outfront the owner ofa The City has receivedarequest from Outfront Media LLC billboard located at 1936 E Katella Avenue to convert the billboard at that location toa digital LED billboard The City s current zoning code does not allow for the constructionof billboards However a 1995 Settlement Agreement witha predecessorof Outfront allows for the existing billboard to remain in place In order for the conversion to take place the City Council is being requested to consider a Relocation Agreement which would 1 allow for the conversionof the existing billboard to digital and 2 require the demolitionof three billboard structures in other parts of the City Asa conditionof approval of the Agreementa change to the Citys zoning code would be required which will be considered at a later date 3 RECOMMENDED ACTION Approve a Relocation Agreement with Outfront Media LLCIf the City Council approves the Agreement staff will move forward with preparing changes to the City s zoning code to allow for the conversionof traditional billboards to digital for Planning Commission and City Council approvals 4 FISCAL IMPACT The Relocation Agreement includes a provision for Outfront to compensate for staff time and costs for preparationof the Agreement and zoning code changes up to In addition the Agreement includes compensation in the form of an annual mitigation fee which would increase General Fund revenue by 1 9 million over the 25 year initial term and 28million over 35 yearsif extensions are exercised

5 STRATEGIC PLAN GOAL 2b Analyze future fiscal needs and potential revenue opportunities 4a Obtain implement and evaluate public input into our services and programs 6 GENERAL PLAN IMPLEMENTATION Not

2 5 STRATEGIC PLAN GOAL 2b Analyze future fiscal needs and potential revenue opportunities 4a Obtain implement and evaluate public input into our services and programs 6 GENERAL PLAN IMPLEMENTATION Not applicable 7 DISCUSSION and BACKGROUND Recently the City was contacted by Outfront owner of several billboards throughout Orange to propose a conversion of an existing traditional billboard located at 1936 E Katella Ave to digital copy Over the years proposals have been made for similar conversions with no action taken because of the potential adverse impacts However staff now believes the technology of digital billboards has come to a point where they are no more intrusive than traditional billboards The billboard being considered for conversion is located near the Shiki Restaurant along the west side of the SR 55 Freeway There are two posters on the structure one facing each direction of the 55 The current billboards are 20 x square feet in size Background The City s current zoning code does not allow for the construction of billboards A series of various ordinances such as prohibiting off premise advertising limitations on size and height of freestanding signs and illumination restrictions effectively ban billboards Nevertheless there are currently eleven traditional billboards in an array of sizes ranging from 12 x square feet to 20 x square feet in the City Four of the eleven billboards were permitted via a 1995 Settlement Agreement with National Advertising all of which front freeways The other seven were built in the 1970s and where already in place when the City annexed the land upon which they were built Additionally there are three billboards that are located in County islands and are therefore not subject to the City s ordinances Through a series of acquisitions over the years Outfront now owns the billboards that are subject to the 1995 Settlement Agreement Conversions to Digital Billboard There has been a trend in the billboard industry to convert traditional billboards to digital billboards Many cities in Orange County and throughout Southern California have permitted digital billboards The vast majority of these digital billboards have been installed subject to relocation agreements This occurs either when a billboard company agrees to convert an existing traditional billboard to digital or construct a new digital billboard in exchange for removing another Some of these constructions have been made on cityowned land such as in Placentia and La Palma for example In the case of locating the digital billboard on city

3 property the revenues are much higher since the billboard company is paying the city rent For those that are not on cityowned property cities have negotiated relocation agreements with mitigation fees attached All nearby cities in central Orange County including Santa Ana Anaheim Garden Grove Tustin Fullerton and Placentia have some kind of digital billboard or digital signage arrangement These uses include billboards and on premise signs such as auto centers and shopping malls Proposal from Outfront Media Earlier this year Outfront proposed to convert the existing traditional doublesided billboard located at the SR 55 Freeway and Katella Ave to digital billboards of the same size In exchange Outfront proposed the removal of five 12 x 25 billboards located on three structures They are as follows Billboard Location Type 140 N Prospect Ave Oust north of Chapman Ave Doublesided poster 2760 N Orange Olive Road Oust south of Lincoln Single sided poster Main Orange Olive unincorporated Olive Doublesided poster While the billboard located at Main and OrangeOlive is not within the City s jurisdiction we do receive complaints about that particular location from Orange residents After several meetings with staff Outfront proposed financial terms for a Relocation Agreement as follows 1 Up to for processing the Agreement and changes to the Orange Municipal Code OMC 2 Mitigation fees as follows Year Annual Payment The Agreement also allows for two 5 year options The first 5 year option would generate per year and the second 5 year option would garner At the end of the Agreement the City and Outfront may negotiate a new agreement to allow for continued operation of the billboard If the parties cannot come to terms the billboard will be removed These terms would generate just over19 million over the initial 25 year term of the agreement and up to28 million if both extensions are exercised Based on our research this would be the most revenue generated out of any relocation agreement executed in Orange County todate ITEM

4 Additionally the Agreement includes provisions to allow for free advertising of City events and for emergency information such as evacuation notices or Amber alerts for example As stated previously the OMC does not allow for these types of signs to be constructed A clause in the Agreement is that in order for the Agreement to be fully effective and allow the conversion to commence the necessary changes must be made to the OMC As such if the City Council approves the Agreement but does not adopt an ordinance to make the necessary changes to the OMC the Agreement is null and void and conversion will not move forward If the City Council does approve the Agreement staff will commence working on changes to the OMC which will be presented to the Planning Commission and City Council for approval and adoption at a later date The OMC changes would contemplate restrictions on illumination and refresh rates to ensure the safety of motorists and to minimize the impact on surrounding neighborhoods The Outdoor Advertising Act Business and Professions Code Section 5200 also places similar restrictions on digital signs that front State highways Noticing The current billboard can be seen from nearby commercial and residential properties on both sides of the SR 55 Freeway However the closest single family residences are over 400 feet away east of the SR 55 Freeway In consideration of that the City sent a total of 346 notices to property owners and tenants in the area adjacent to the billboard site Note that the proposed Relocation Agreement is not a land use determination As such noticing is not required but was still done by the City A copy of the notice and a map of the properties that received the notice are attached As of the preparation of this report we have not received any communication from nearby residents or businesses in relation to this proposal 8 ATTACHMENTS Relocation Agreement with Outfront Media LLC Image of Proposed Upgraded Billboard Map of Billboards to be Removed Public Notice to area residents Notice Map ITEM

Billboard Ordinance Update Project

Billboard Ordinance Update Project MITIGATED NEGATIVE DECLARATION NO. 1860-18 Lead Agency: City of Orange Community Development Department Planning Division 300 East Chapman Avenue Orange, CA 92866-1591