Nonprofits Dragged into Legal Dispute over a Billboard

Empty Billboard” by Pat Guiney

June 26, 2017; WTAE (Pittsburgh, PA)

The city of Pittsburgh and Lamar Advertising have history. In particular, the two are embroiled in a lawsuit over the legality of a billboard on Mt. Washington in Pittsburgh and the tax implications that come with it. Now, it appears some nonprofits have been brought into the dispute, as Pittsburgh’s mayor, Bill Peduto, is alleging that Lamar is withdrawing from plans to support green infrastructure and community development initiatives.

One nonprofit, Nine Mile Run Watershed Association, seems to confirm the withdrawal of support from Lamar but did not go as far as to say it was due to the company’s legal dispute with Pittsburgh. The mayor of Pittsburgh calls this “bullying” nonprofits to gain leverage in negotiations. Lamar, an outdoor (billboard) advertising company, is understandably reluctant to give up any advertising property that it owns, as those billboards are their source of revenue. Nine Mile Run Watershed Association makes clear that any projects it conducts would not require that Lamar take down any existing billboards.

Coming to a head here are at least two issues that seem to be poorly defined, or at least understood. The first is the ownership of the land in question. As the article reads, Lamar was cooperating with a purchaser of the land on which the sign sits, and has recently decided to cease cooperation. Insofar as the contracts between parties allow, this seems reasonable, albeit troubling.

The second issue seems to be a zoning matter, although it is not clear in the article what about the billboard is problematic besides its being “illegal.” It seems that finding a solution will depend on determining the legal status of the billboard first. If it is indeed ruled illegal, the value of that land to Lamar drops, and probably sharply. That might not be a bad thing for the nonprofit purchasing the land. After the legal dispute is resolved, then it becomes Lamar’s job to do with that land what it wishes. The Coase Theorem suggests that the land will go to whomever values it the most. However, Lamar may decide not sell to a nonprofit (be it the highest bidder or not) because of its toxic relationship with the city.

In any event, these nonprofits have been put in the unenviable position of being thrust into a legal dispute that they did not start. It will be interesting to see how future negotiations between nonprofits and Pittsburgh—and nonprofits and Lamar—are impacted by this affair.—Sean Watterson