I-Team Finds Businesses Cashing in on Neighborhood ‘Blight'

Los Angeles businesses are profiting from a new kind of advertising blitz that some residents claim is creating visual blight across the city.

Marketers are paying local business owners to place ads for movies, television shows and music on large construction walls that surround their property.

But the I-Team found that in some cases, the permits required to erect the walls and post the ads, have been obtained in violation of the L.A. Municipal Code.

Placing promotional posters on construction walls is known as "street-level" or "out-of-home" advertising. Thanks in part to the recent building boom in Los Angeles, the trend is spreading, generating tens of thousands of dollars in profits for a small group of property owners and marketers.

According to data obtained by the NBC I-Team, the city of Los Angeles has received hundreds of complaints from citizens who say the ads are ruining the visual landscape.

"The proliferation of them is kind of shocking," said Venice resident Mindy Taylor-Ross. "I just want to go and rip [them] down."

"There's a lot of money involved," said Dennis Hathaway, founder of The Coalition to Ban Billboard Blight. "They see an opportunity to make a fast buck and they are willing to do it."

The I-Team found that acquiring the necessary permits to put up a construction wall, and place advertising on it, has been fairly easy.

To obtain a permit to erect a construction wall, the LA Municipal Code requires property owners to apply for a building permit from the LA Department of Building and Safety, and provide details about planned construction. The barricades are meant to protect passing pedestrians from the construction zone.

To obtain a "sign permit," which allows the posting of ads or other signage on a barricade, the city requires that the property be permitted for construction. Sign permits are also issued to owners of vacant lots. In exchange for the sign permit, owners must agree to keep the area clear of graffiti and trash.

The city says the sign requirement was intended to help keep the city clean.

But the I-Team investigation found some outdoor marketing companies are twisting the law, by helping property owners with no apparent construction plans take out building and sign permits, just so they can post advertisements and share in the profits.

Business owner Udi Levy says he was approached by a marketing company at his Venice store.

"They were trying to sell me on fencing my whole place," Levy said. "They just said that if I'd consider blocking out my whole place, they'd pay me a lot of money."

Levy said he was offered $10,000 a month in extra income, but declined, calling the ads "an eyesore."

Down the street, the I-Team found the Venice United Methodist Church surrounded by barricades that were covered with promotional posters for the movie, "The Magnificent Seven." Records obtained by the I-Team show the church applied for a construction permit to replace two doors and some windows, but more than nine months later, showed no evidence of construction.

Church officials declined to comment.

NBC4 found other businesses across Los Angeles that have taken out building and sign permits for construction that never started. Several owners told the city they were erecting awnings; one bar owner obtained the permits by stating plans to re-stripe the parking lot.

The I-Team presented the examples to the Department of Building and Safety, which then investigated them.

David Lara, Assistant Bureau Chief of the LA Department of Building and Safety confirmed that the way property owners and marketers are interpreting the law is not what the city intended, and told the I-Team that immediate action is being taken.

Asked about the properties that had building and sign permits, but no evidence of construction, Lara said "the permits that were generated to do the actual construction work -- those have been revoked."

The LA Planning Department has also announced a change in policy in the wake of NBC4's questions. Effective immediately, property owners in business areas will have to prove a construction wall is needed to protect pedestrians before being granted a permit to build one.

Requirements for obtaining a sign permit will be more stringent as well.

Asked if business owners will still be able to get a building and sign permit for re-striping a parking area, Lara said: "No, that will not be allowed."

"This is a situation where the department and the city as a whole gets to tighten up a few loose ends and make the whole situation better for the communities."

If you suspect a code violation in connection with a construction wall or posted advertisement, you can submit a complaint at the LA Department of Building and Safety.