During his teen years, Mike McNeilly was a tagger. But with a key distinction that set him apart from most graffiti vandals: He always got permission from property owners before spray-painting their buildings.

“I still get permission to this day,” said the self-proclaimed artist, owner and sole employee of SkyTag Inc., a Beverly Hills company that puts giant supergraphic advertisements on buildings.

But for McNeilly, it’s not the property owners who are the problem. It’s the government. He’s facing a fine of up to $53 million from the city for draping 118 buildings around Los Angeles with signs, allegedly without permits.

He has recently been covering buildings with an image of the Statue of Liberty; those signs could later be converted to ads.

“I’m putting up artistic and political murals, and I totally believe that is my First Amendment right, as well as a property owner’s right,” McNeilly said. “What kind of country do we live in where you need the government seal of approval for artistic expression?”

In response to the Los Angeles Fire Department’s Jan. 28 order to remove 20 supergraphics, including at least one of his, McNeilly said he constructed his signs to meet state and county standards. The materials are used on signs at government buildings such as the Los Angeles County Museum of Art and at regional malls.

The future of SkyTag’s supergraphics will depend on the outcome of one or more lawsuits. SkyTag filed a federal suit in August 2008, alleging that the city’s sign ordinance is unconstitutional because it abridges free speech rights.

In a previous related lawsuit against Los Angeles, Philadelphia-based billboard company World Wide Rush made the same argument. The suit was decided in World Wide Rush’s favor at the federal district court level, but a federal appeals court will make a decision sometime later this year.

McNeilly hires independent contractors to mount the supergraphics on buildings. His revenue comes from advertising. He sells his biggest installations for $100,000. Movie studios and other clients can get their giant images on buildings for four to six weeks for that amount. McNeilly gives building owners a share of the income. SkyTag also puts up supergraphics in New York and Las Vegas.

The city contends that McNeilly cares more about money than constitutional principles.

“What is really at issue is the potential loss of revenues from plaintiffs’ alleged lease agreements with some unknown third parties to display signs,” according to a Jan. 13 filing by the City Attorney’s Office in response to SkyTag’s suit. “Noncomplying signs may cause traffic and other safety concerns, as well as destroy or impair the aesthetic landscape of the 118 communities at issue. Therefore, if anyone should be enjoined, it should be the plaintiffs.”

McNeilly said lawsuits by other billboard and advertising companies repeat the same argument that city officials have granted so many signage rule exemptions to political allies and favored developers that it’s hypocritical for them to punish the sign companies.

“Entitlements and property rights should have equal protection the city shouldn’t use unfettered discretion to give preferential treatment to its friends,” said McNeilly. “That’s what got them into trouble. They’re just not treating property owners fairly.”

Federal Judge Audrey Collins agreed in her preliminary ruling on the SkyTag case Jan. 15.

“The city has initiated enforcement actions as to some billboard companies, but not others, and has agreed to stay enforcement of its regulations against certain billboard companies, but not against others,” she wrote.

“The city of Los Angeles has the most convoluted signage regulations in the country,” McNeilly said.

Residents and office tenants have protested the proliferation of billboard advertising in the city, and McNeilly said he understands their frustration, but believes there are solutions to their complaints.

Office tenants have complained that supergraphics placed on their buildings block light or tint their workplaces. McNeilly said the answer is a type of wrap that looks like window tinting on the inside but displays images on the exterior.

McNeilly thinks that the controversy over signs in Los Angeles is more a product of digital billboards than supergraphics. “I could understand people not wanting bright lights in the window,” he said. “I would recommend that outdoor companies turn down the brightness.”

SkyTag has tried community outreach, without success.

“Property owners have told the city the advertising revenue could be shared with the immediate neighborhood,” he said. “That’s been proposed over the past year. All 118 property owners I work with have supported that.”

However, he wants the money to benefit the neighborhood around the supergraphic, not to be placed in a general fund.

Paul Fisher, a lawyer in Newport Beach who has worked for outdoor advertising clients for 20 years and currently has a lawsuit against the city over its billboard regulations, said he received a similar response to outreach efforts over clients’ billboards.

“We have tried to meet with local residents and offered not to post certain advertisements that residents might find offensive,” Fisher said. “It hasn’t had much resonance. I blame it on the electronic signs, which I think started this whole thing.”

In contrast to the neighborhood activists who portray billboards and commercial imagery as urban blight, McNeilly sees them as an expression of the local economy.

“This is a capitalistic consumer society,” he said. “We should embrace that, not suppress it.”

McNeilly said there’s a place for giant signs, such as Times Square in New York, which is a vibrant attraction thanks to its huge, glowing advertisements.

McNeilly started SkyTag in the late 1980s when he worked with the newly incorporated city of West Hollywood to make Sunset Boulevard a world-famous showcase for giant billboards.

In the current economy, he sees supergraphics as a way to save office towers, given the poor health of commercial real estate and increasing vacancy rates.

“Los Angeles should be grateful advertisers want to spend their dollars here,” McNeilly said.

He doesn’t expect a quick resolution to his legal battles with the city, and already anticipates the end game.

“The U.S. Supreme Court,” McNeilly said. “It could go the distance.”