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Making billboards into dollar signs
(Indianapolis Star, The (KRT) Via Thomson Dialog NewsEdge) Feb. 15--Even with tougher restrictions on billboards in Indianapolis, Jerry Neighbors has developed dozens of billboard sites across the country, including many in Indianapolis.
He has focused here the past four years and won approvals for 12 new billboards despite tougher laws on outdoor advertising that the city passed in late 2003.
Recently, Neighbors offered to tear down for free 10 prominent interstate billboards that the city won the right to remove in a zoning lawsuit.
In an interview with The Star, Neighbors shared his observations about the market for billboards here:
QUESTION: Pinnacle Media recently was ordered to tear down 10 of its interstate billboards that were involved in a long-running zoning dispute with the city of Indianapolis. What is your proposal to Pinnacle?
ANSWER: I made them an offer to remove the signs at no cost. The signs would belong to me when I removed them. I think another proposal could be made to the city. For example, you could take down five signs and keep five as electronic signs. You could utilize them for Amber Alerts, communicating with tourists, as well as advertising. I would be interested in making the city a proposal if in fact anyone would be interested in taking it seriously.
Q: Indianapolis has no digital billboards, which flash several different advertisements every minute. Are they coming here?
A: It will depend on how the city planners and people who oppose billboards react. It will also depend on whether the state allows it. Probably you'll see some proposals from Clear Channel first, or Lamar, the city's two largest billboard owners. I know they're interested.
Q: How expensive are digital boards?
A: Most of the time they convert existing boards to this type of technology. It costs about $350,000 to convert a 14-by-48-foot face to a digital sign, then another $50,000 to wire it up.
Q: What benefits do digital signs offer?
A: It's a whole new world for outdoor advertising. It can endear us to the community more than in the past, by offering us an opportunity to give back. Companies can donate a face on a digital board to municipalities to use for public messages, time and temperature, and Amber Alerts. In Cleveland-Akron, they probably have a dozen digital signs on the major freeways. If you have a missing child in Cleveland, within hours you have a message up on the signs.
Q: How have you been able to win approvals for new signs despite the tougher sign ordinance in Indianapolis?
A: I know we've gotten 12 out of about 15 or 16 new signs permitted in Marion County since the new ordinance went in. I think it's due to hard work on our part and an expertise we possess through experience.
Q: What's your strategy in finding billboard sites?
A: I take the path of least resistance. I work only on use-by-right: signs that are permitted by the current rules and regulations the city has in place. You come up with a location that meets all those criteria, and no one can stop you from developing.
Q: Which sign locations are you most proud of?
A: They're so hard to get, I'm proud of every single one of them. I tell my property owners, if you have a location that meets all the criteria for an outdoor advertising sign and you can find a company that wants to build a sign, it's like hitting the lottery. Because over a period of 20 years, it's worth many thousands of dollars to own a legal location. There's nothing you have to do except go to the mailbox to pick up your check.
Q: How do you respond to people who want billboards removed?
A: If you look at cities that have what the anti-billboard people would call sign problems, they happen to be the biggest and best cities we've got in the country. Las Vegas has a tremendous number of signs. And LA, Miami, Houston. It's been blown out of proportion that Indianapolis has sign problems. San Antonio has 1,940 outdoor advertising locations in the city limits. That's probably three times as many as in Indianapolis. Some people may say they emit visual pollution, but I say beauty's in the eye of the beholder.
Q: Where are you looking now for new signs?
A: I don't really focus on Marion County anymore. I get in the car and drive to other cities. I can't work in this area. There aren't enough locations left to warrant my effort.
Q: No good locations or just reluctant property owners?
A: There's probably another 25 or 30 spots for signs here in town that haven't been developed because the property owners aren't interested in leasing. An outdoor advertising sign is not the highest and best use for a property. Particularly a property that's zoned commercial or industrial. The owner may feel it might encumber the property for resale or development because it has a long-term sign lease.
Q: Besides digital signs, how has outdoor advertising changed?
A: We don't use a lot of telephone poles anymore. The monopole is one single pole supporting the entire structure. The next big thing was vinyl, in the early '90s. We used to paint the signs and had a problem of paint dripping on cars. Now the vinyl is printed on a computer and is actually wrapped around the sign. You can do magazine-quality ads.
Q: How profitable is the business?
A: It is an extremely lucrative business if run properly. We were paying ground rent of 8 to 10 percent of revenues 20 years ago. Now you pay a lot more, 20 to 25 percent. So it's not as lucrative as it was.
Q: Why are signs so valuable?
A: Signs did not become valuable until Lady Bird Johnson in 1965, when they passed the highway beautification bill. Up to that point, you could pretty much put signs wherever you wanted to put them. That highway bill mandated the states write outdoor advertising laws to govern the placement of signs. Once you started controlling the supply, all of a sudden they became more valuable. Today, with as many restrictions on new signs, their value is higher than ever.
Q: Why haven't you developed signs in Carmel or Fishers, where you live?
A: We would if we could. This happens to be the eighth-highest median income place in the country. Which means we could get some high rates for signs. But I have checked the rules and regulations. I don't think you can put a new sign up in Hamilton County, period. They just say, "We don't allow them." For whatever reason, they take a great amount of pride that there aren't any signs.
Q: What market are you most active in?
A: Canton-Akron. We've constructed eight signs up there, have another six we're ready to build and the possibility of five more.
Q: What's J&B Outdoor's revenue?
A: The company was founded four years ago, and we have either exceeded or been right at $1 million of business every one of those years. This year should be our best. We'll probably approach or exceed $3 million. For two guys, that's not too bad.
To see more of The Indianapolis Star, or to subscribe to the newspaper, go to http://www.IndyStar.com.
Copyright (c) 2008, The Indianapolis Star
Distributed by McClatchy-Tribune Information Services.
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