Sign companies and building owners are taking down their supergraphic signs in Los Angeles after a crackdown by City Attorney Carmen Trutanich, but they’re not happy about it.

Some plan to continue to fight for their right to put up the giant ads, which can cover entire buildings.

Saying that the high-profile jailing of a Hollywood building owner on $1 million bail for posting a supergraphic and a rash of cease-and-desist orders are “over the top,” sign companies intend to fight back. They say the city is singling out some sign companies and building owners while cutting deals with others.

“For us, this is extreme when it concerns equal protection and free speech,” said Michael McNeilly, owner of SkyTag Inc., which has installed several dozen supergraphic signs throughout the city. “Government is using too much power here.”

Many building owners and their attorneys, most of whom declined to comment on the record or didn’t return calls for this article, are said to be stunned and upset by the crackdown, especially after the Feb. 27 arrest of Kayvan Setareh, owner of a building at the corner of Hollywood Boulevard and Highland Avenue. Setareh was jailed on $1 million bail, which was lowered to $100,000 after he agreed to take down the supergraphic draped on his building.

That arrest, along with subsequent warnings and warrants from Trutanich, sent shock waves through the ranks of building owners, who now find themselves targeted in the controversy – in the past, enforcement talk has focused on sign companies.

Many building owners have taken down their supergraphic signs fearing arrest and confiscation of revenue from the signs, which can generate millions of dollars each year.

‘Bewildering and confusing’

One of those is Jeff Anthony, who runs a film storage archive at a 14-story building on Santa Monica Boulevard and Highland known for its supergraphics advertising Apple products.

“This whole thing is bewildering and confusing for us,” said Anthony, vice president of Iron Mountain Film and Sound Archives, a subsidiary of Boston-based Iron Mountain Inc. “To say we’re going to take the signs down now, it leaves a bad taste in our mouth.”

Iron Mountain posted two of the city’s first supergraphic signs 15 years ago, among the largest such signs in the city.

Anthony said that the signs were taken down by March 22 after he received a letter from the City Attorney’s Office threatening to collect past revenue from the signs.

Building owners and sign companies had been expecting Trutanich to enforce sign laws, as he had promised to do in his campaign last year. However, they were caught off guard by the sudden escalation of the crackdown.

As a result, building owners are now focused on minimizing their own exposure to these penalties.

“Sign companies and building owners that have received criminal complaints and cease-and-desist orders have taken their signs down because they want to reduce or eliminate their liability,” said Phillip Recht, a senior partner with the downtown L.A. office of law firm Mayer Brown LLP who represents several sign companies. “But most of them think that these prosecutions are misguided and are not really justified. They will continue to fight them as time goes on.”

The crackdown began in late February, when Trutanich’s office filed a lawsuit against 27 sign company executives, building owners and attorneys, alleging that they had posted supergraphic signs without permits. Among the defendants are World Wide Rush Outdoor LLC of Washington Crossing, Pa., and its founder Barry Rush, one of the major supergraphic companies operating in Los Angeles. Among the signs that the company has installed is a Charles Schwab ad on an office building on Sepulveda Boulevard in the Palms neighborhood.

Trutanich then obtained arrest warrants for other sign contractors and building owners in Hollywood.

Steve Madison, attorney for sign contractors Alexander Kouba and France Luanghy, who were under threat of arrest, told the Business Journal last week that Trutanich overstepped the bounds by getting warrants.

“This will change the way building owners approach supergraphics,” Madison said. “This raises the specter of criminalizing what people in many cities regard as appropriate commercial activity.”

Earlier this month, Trutanich sent more than 20 cease-and-desist letters to building owners and sign companies with supergraphic signs the City Attorney’s Office regards as unpermitted. The letters gave the building owners and sign companies three days to remove the signs or face further legal action, including the confiscation of revenue generated by the supergraphic signs over their history.

“We were receiving multiple communications from the City Attorney’s Office warning us to take down the sign or face possible penalties,” said Iron Mountain’s Anthony. “The letter said that if we didn’t take the sign down, the city would seek ‘disgorgement of all revenues gained from the sign.’”

Anthony said a substantial portion of the revenues from the signs have gone to support non-profit organizations in the community, including Children’s Hospital and the Los Angeles Free Clinic. He said that the company would continue its non-profit contributions, but that it would be challenging for him to convince corporate headquarters to keep the contributions at the same level.

The storage facility’s windowless concrete exterior walls had been regarded as an eyesore in the past; they were once decorated by artists with the goal of urban beautification. The supergraphics were introduced later, and Anthony said the company hadn’t been threatened with enforcement until Trutanich took office.

“We’ve had all sorts of elected officials here at the building, from former Mayor James Hahn to current council members Tom LaBonge and Eric Garcetti,” he said. “All of them had nothing but praise for the tasteful nature of the signs and this was through three different city administrations.”

‘Good neighbor’

Anthony said the signs will remain down for now. He said Iron Mountain might consider contacting city officials about getting permission to put the signs back up, but not until the current furor dies down.

“We’re trying to be a good neighbor and we’re being sensitive to what the city wants us to do,” he said.

The Hollywood Roosevelt Hotel also received a letter from Trutanich over a supergraphic on the hotel. The hotel was in litigation with the city over the sign before the letter, said attorney Ben Reznik, a partner with Jeffer Mangels Butler & Marmaro LLP.

The hotel had a temporary permit for the sign before the supergraphic moratorium, but has not been able to renew the permit. “We’re in court with a lawsuit to establish the legality of the supergraphic,” Reznik said.

Hotel executives are trying to schedule a meeting with Trutanich to discuss the issue.

Jeff Isaacs of the City Attorney’s Office said Trutanich is only targeting supergraphic signs that don’t have the proper permits, particularly those that have been put up or changed out since the city’s interim ban on supergraphics was made permanent in August.

“If the building owner or the sign company can produce a permit or if the owner has a vested right, then they have nothing to be concerned about,” said Isaacs, chief assistant city attorney for the criminal branch.

Isaacs said the city attorney has the right under state law to seek all past revenue from a sign that has been put up illegally. He said that the threat of such large fines was intended as a deterrent and that it’s working because building owners and sign companies are taking down the supergraphics.

‘Deterrent value’

“What’s the deterrent value of a misdemeanor violation with a $1,000 fine when you’re dealing with millions of dollars a year in revenue?” Isaacs said. “People must realize it’s not worth it to put up one of these supergraphic signs.”

Leron Gubler, president of the Hollywood Chamber of Commerce, points to a perception of unfairness regarding the enforcement action. Much of Hollywood was designated one of several sign districts when the City Council passed the ordinance banning supergraphics except in those districts. So building owners may have assumed they could continue renting their space for supergraphic ads. However, Trutanich is cracking down on allegedly unpermitted signs regardless of their location. Some say it’s unfair that the new W Hotel is allowed to have supergraphics and other buildings in Hollywood aren’t.

“There’s a feeling among some building owners that if you have a big new project that the city values, then you can get supergraphic signs included and can use their revenue to make the project pencil out. But if you’re a small landlord of an existing building and you want to put up a supergraphic sign, you can’t,” Gubler said.

Sign industry executives said they want to see the city try again to craft a sign ordinance that doesn’t discriminate among sign and building owners.

“We have challenged the city on the grounds of unfettered protection, granting rights to some property owners and denying it to others even if they’re only a block away,” SkyTag’s McNeilly said. “We will continue to challenge the city on this, especially now that the city attorney is using arrest, criminal prosecutions and the threat of extreme fines.”