AGENDA ITEM
TO: HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM: CARLO TOMAINO
CITY MANAGER
BY: GREG KAPOVICH
COMMUNITY DEVELOPMENT DIRECTOR
SUBJECT:
title
BILLBOARD RELOCATION AGREEMENT WITH CLEAR CHANNEL FOR THE CONSTRUCTION AND OPERATION OF A DIGITAL BILLBOARD
summary
Summary:
Following the March 10, 2026, City Council approval of a 20-year Digital Billboard Site Lease Agreement with Clear Channel Outdoor, LLC (CCO) to modernize the City-owned billboard at 3100 California Avenue, the City Council is now considering a companion Billboard Relocation Agreement. This next step allows CCO to secure required municipal and state regulatory approvals, including mandatory permits from the California Department of Transportation (Caltrans).
The City constructed the existing billboard in 1993, predating the vast majority of off-premise sign regulations that Caltrans currently enforces. Although the 1993 billboard adheres to standard local zoning and setback requirements, its location sits on a highway segment that Caltrans currently classifies as a "landscaped area." State guidelines strictly prohibit new billboards in these designated areas, meaning the City and CCO must resolve this conflict to secure the necessary state development permits.
To preserve the current location the parties are pursuing an inventory offset option that Caltrans permits. CCO will utilize its regional network to modify an alternative billboard located on a landscaped segment elsewhere. This satisfies the state's strict mandate against a net increase of non-conforming off-premises signs, allowing the parties to successfully rebuild the 3100 California Avenue billboard in place.
Strategic Plan Goal(s):
Goal No. 1 Financial Stability: Ensure the City’s long-term financial stability and resilience.
Goal No. 3 Economic & Downtown Development: Improve the local economy, support local businesses, and create a vibrant downtown core.
Goal No. 4 Infrastructure: Maintain and Improve the City’s physical infrastructure, waste system, and recreational spaces.
recommendation
Recommendation:
Approve the proposed Billboard Relocation Agreement between the City of Signal Hill and Clear Channel Outdoor, LLC. This action satisfies Caltrans regulatory requirements, clearing the path for state permit issuance, as well as demolition of the existing structure, and the subsequent installation, operation, and maintenance of the new modern digital billboard at 3100 California Avenue.
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Fiscal Impact:
The approved lease agreement established a stable and predictable positive revenue stream for the City over the 20-year initial period. The agreement includes a Minimum Annual Guarantee in base rent beginning at $150,000 in Year 1 and $225,000 annually in Years 2 through 5, with scheduled ten percent escalations every five years thereafter. Based on the Minimum Annual Guarantee schedule, the City would receive more than $5 million in guaranteed payments over the initial 20-year term. If 35 percent of net advertising revenue exceeds the annual minimum guarantee in any year, the City would receive the higher amount.
While the City Council approved the financial terms of the Lease Agreement during its March 10, 2026, meeting, executing this Relocation Agreement is the required next step in the State’s process. CCO cannot pull demolition or construction permits from Caltrans without a fully executed relocation agreement.
Background:
The City-owned digital billboard at 3100 California Avenue, adjacent to the I-405 Freeway, was constructed in 1993 as part of the Signal Hill Auto Center redevelopment efforts. The Auto Center Association originally owned and operated the structure. In 2011, the City acquired the underlying property by utilizing Redevelopment Agency funding. Since acquiring the billboard, the City has utilized the structure to promote Auto Center dealerships, support other Signal Hill businesses, and display public service announcements and City programs. The sign serves as a primary marketing tool for the Auto Center, which generates a significant portion of the City’s sales tax revenue. Given Signal Hill’s limited geographic size of approximately 2.2 square miles and limited opportunities for new large-scale commercial development, the City must preserve and strengthen existing revenue-generating commercial districts. The freeway-oriented billboard plays an important role in supporting this economic base.
On March 10, 2026, the City Council approved a 20-year Digital Billboard Site Lease Agreement with Clear Channel Outdoor to modernize the aging billboard. That action successfully secured a long-term revenue stream and transferred all operational and maintenance oversight to Clear Channel Outdoor.
The action before the City Council tonight is the consideration of a companion Billboard Relocation Agreement. Following the execution of the lease, CCO must now obtain all required municipal and state regulatory approvals. This process includes pulling local building and electrical permits, alongside securing mandatory state permits from the California Department of Transportation (Caltrans).
The City constructed the existing billboard in 1993, predating the vast majority of off-premise sign regulations currently enforced by Caltrans. While the billboard structure successfully adheres to standard zoning, setback, and distance separation requirements, it sits on a highway segment that Caltrans currently classifies as a "landscaped area."
Current Caltrans guidelines strictly prohibit the placement of new billboard signs within designated landscaped areas. To resolve this conflict and secure the necessary Caltrans development permits, state law requires the City and CCO to fulfill one of two options:
• Relocate the proposed digital billboard to an entirely non-landscaped parcel.
• Enter into a formal relocation agreement where CCO selects a separate, independent billboard that also happens to be located on a landscaped area and modify that billboard to be compliant with current Caltrans standards.
Analysis:
Staff received and evaluated a compliance inquiry from Caltrans addressed to the City regarding the nonconforming status of the legacy Redevelopment Agency sign. Staff met directly with CCO corporate representatives to review the notice.
To preserve the existing location, the parties have pursued the inventory offset option. Rather than requiring the City to alter the physical site (such as paving over the existing landscaped area) or relocating the sign to a new location within city limits, Caltrans permits industry operators to "trade" sign inventory. CCO will use its extensive regional network to modify an existing billboard that is also located on a landscaped segment elsewhere. This satisfies the strict state mandate that no net increase of non-conforming off-premises signs occurs along freeway segments and allows the City and CCO to rebuild the billboard in its current location.
The proposed agreement provides the exact legal mechanism needed to clear the state regulatory hurdles and activate the terms of the previously approved March lease.
The permitting and construction phase will follow a coordinated timeline managed entirely by CCO:
• Parallel Review Window (90-120 Days): CCO will step in on the City's behalf as the primary operator to resolve the Caltrans nonconforming issue. The proposed relocation agreement would satisfy Caltrans requirements. CCO anticipates review of the relocation agreement to occur concurrently during the standard 90-to-120-day Caltrans permit review process that CCO was already prepared to traverse for the billboard itself.
• Local Permitting: Once the final Caltrans permit is secured, CCO will immediately transition into the standard City administrative pipeline to pull municipal building and electrical permits before proceeding to construction.
Environmental Assessment
As established during the lease review, the approval of this Relocation Agreement does not constitute a physical commitment or approval of a definite development plan under State CEQA Guidelines § 15352(a).
Final permission to construct the modern digital display faces remains subject to standard local building, electrical, and engineering permits, alongside mandatory state approvals. Full environmental review under the California Environmental Quality Act (CEQA) will occur during that formal permitting pipeline. This agreement does not bind the City to a definite course of physical action prior to CEQA compliance, nor does it restrict the lead agency's authority to consider environmental mitigation measures, evaluate alternatives, or deny the final development permits outright (State CEQA Guidelines § 15004(b)(2)(B)). CCO estimates state permit processing will take approximately six months or more.
Conclusion
In March 2026, the City Council fully approved the business terms, lease revenues, and community protections for this project. The proposed Relocation Agreement is a State-required tool that allows Clear Channel to step in, resolve our outstanding Caltrans asset vulnerability at no cost to the City, and clear the path to activate a predictable $5 million General Fund revenue stream once the new billboard is constructed. Staff recommends approval.
Reviewed for Fiscal Impact:
_________________________
Siamlu Cox
Administrative Services Officer/Finance Director
Attachment:
A. Billboard Relocation Agreement (City of Signal Hill / Clear Channel Outdoor)