Paul Wright of SignValue.com is one of the smartest people Insider knows when it comes to valuing billboards.  Wright is a General Certified Appraiser who has been valuing billboards for 20 years.  Wright is also author of Billboard Appraisal: The Valuation of Off-Premise Advertising Signs.   Wright recently gave an OAAA sponsored webinar on billboard valuation.  OAAA members can listen to the webinar here.

Paul what projects have you been working on?

We’ve been involved in lots of recent cases for sign owners, attorneys and banks.

We worked on a case with GEFT Outdoor in Indianapolis.  They were denied digital permits.  The Court said they’d been financially damaged.  GEFT came to us and we estimated the damage.  GEFT was able to get a settlement with the City to install two digital billboard structures that were successfully sold to Lamar for a large undisclosed sum.

We also do appraisals for financing.  The W hotel was building this digital sign in downtown Atlanta.  The bank asked us to appraise the sign component.  We did that.  Based on our estimates the bank was able to lend the developer the money they needed to finish the project.

Here are a couple signs we appraised on an Atlanta freeway for estate planning and tax purposes.

We worked on a Texas eminent domain case involving a billboard owned by Arrington Outdoor.  We were lucky because we were brought in before a sign was taken down.  It lends a lot of credibility to an appraisal if the expert can say they saw a billboard before it was taken down.  We testified at trial and the jury awarded $968,000.  The State of TexasDOT appealed.  The Texas appellate court said that (1) sale info is admissible in court and (2) sign owners can testify as to value.  At the end of the day, Texas ended paying $1.2 million for this sign.

Talk about billboard condemnations.

There are 200-400 billboard condemnations in the United States every year.  It can be for a new road, municipal project or flood control area.  We worked on a case recently in Denver where the city wanted to grant land to a retail developer.  We worked with the landowner to defend their value.  Some government entities argue that billboards are just a business or personal property, so the sign owner does not need to be compensated.  However, the 5th Amendment of the US Constitution is clear.  The government must “compensate citizens when it takes private property for public use.”  Billboards are private property.

Governments are under pressure to keep costs down on road projects and sometimes this leads to creative valuations of billboards subject to eminent domain.  You need a good appraisal to be able to fight back.

How should you prepare for a condemnation proceeding?

Act like you would if you were selling your sign.

• Gather information on your permit, land leases and sign structure, sign specs, ad contracts, sign photos, partnership agreements and surveys.  A good real estate rep can pull this information together quickly.
• Get a professional appraisal.  Think of the appraisal like a special key that will open doors for you and settle cases more quickly.  Traditional banks will want this.  It’s also compelling to have a third party opinion in a trial.
• Get an Eminent Domain attorney or experienced out of home lender.  OAAA can help you to find a good attorney.
• Work closely with your landowner.  Stay in close communication.  A lot of government agencies won’t communicate with everyone who has an interest in a property.  They’ll only communicate with the landowner.
• Be reasonable and look for opportunities.  Can you relocate to another site instead of taking a cash settlement?  Maybe you’ll be offered a perpetual easement or a permit to convert a static board to digital?

How often are condemnation cases settled out of court.

Our experience is that 90-95% of billboard condemnation cases are settled out of court.

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