CITY OF NEW YORK V. 149 CHURCH ASSOCIATES LLC.

(The City of New York Environmental Control Board, September 25, 2014)

We represented: 149 Church Associates LLC

Clive Morrick, Administrative Law Judge

Further Findings of Fact and Conclusions of Law

Petitioner charged respondent on 8/28/2012, with displaying an outdoor advertising sign without a permit; displaying an outdoor advertising sign prohibited in the Zoning District; and failing to register as an outdoor advertising company (OAC) while acting as such.

Respondent presented a pre-trial Memorandum of Law. Petitioner declined to respond.

The NOVs are dated 8/28/2012. Petitioner augmented the NOV with two photographs. P ex I, 2. These show a sign on the building at a subway station entrance. It is on the left side of stairs leading down to the station. Above the sign is an awning for a grocery store which is a commercial tenant in the building. Facing passengers as they descend the stairs is another outdoor advertising sign, erected by the MTA.

Respondent objected to the admission of these photographs due to insufficient foundation.

P ex 1 has superimposed text giving the NOV#, date and location. P ex 2 has no superimposed text In P ex I, the NOV# is clearly wrong but the location matches the cited location in the NOVs and the sign matches the issuing inspector’s description: “Hotel Transylvania.” I admit the photographs.

Respondent stated its defense was that it was not an OAC and that because the NOVs were specifically addressed to it as an OAC they must be dismissed.

Mr. Cardinale testified he is the respondent’s facilities manager and manages seven buildings in the area. No other has a sign displayed. He visits the cited building twice weekly. He saw the cited sign but thought it was erected by the MT A.

Respondent leases a ground floor space to a grocery. The lease (Ex A to respondent’s Memorandum of Law) forbids sign displays by the tenant without consent. (Rule 5 of the rules under para 35 of the lease). Respondent has not consented to the display of any signs. Respondent has not agreed with anyone to display signs. Respondent has not entered into any contract to do so. Respondent has not benefited financially or at all from the cited sign. Respondent has not created space for sign displays.

He further testified that on receiving the NOVs respondent told the tenant to remove the sign and it did. He produced a photograph dated 4/3/2013, of the wall without the sign, and of the sign the tenant removed. Rex B, A. (This sign was erected subsequently to the cited sign and advertises a different product.)

He produced an agreement between respondent’s tenant and Contest Promotions, the company that, his tenant told him, erected the sign. Rex D.

Finally, he produced a permit issued to a sign hanger on 8/24/2012, to install a business accessory sign. Rex E.

Summations:

Respondent asserted it had not acted as an OAC and the case was akin to Appeal No. 1000450, NYC v Suh You Pak Associates, Inc.,11118/2010, where the commercial tenant entered into an agreement with an OAC for sign display and the respondent owner was unaware of the sign.

Petitioner responded that an owner is held to have directly or indirectly made space for advertisements whenever an outdoor advertising sign is displayed on a building.

Findings of Fact and Conclusions of Law:

I credit respondent’s testimony.

First, I find the sign is an outdoor advertising sign. Contest Promotions signs of this nature and design have been so held: Contest Promotions v City of New York Bd. Of Standards and Appeals, 116 AD 3d 446 (2014). Further, respondent’s argument in its Memorandum of Law that the sign is an accessory sign is inapplicable (merits apart) because it is directed to a sign that was displayed subsequently to the cited sign.

Second, the cited sign does not have a permit because the permit respondent submitted is for different copy and is inapplicable to the cited sign.

Third, the agreement between Contest Promotions and the grocery, though called a sweepstakes agreement, in fact is an agreement under which the tenant asserts it has authority to lease building wall space for sign display. See, Rex D, para I.

I find that the tenant grocer leased space for that purpose without informing respondent, and that only the tenant received rent for the leased space.

I credit the NOVs and supporting evidence and find that an advertising sign was displayed without a permit and in violation of the Zoning Resolution.

As owner, respondent is responsible for those violating conditions. However, respondent is charged with class I offenses applicable only to OACs. Is respondent an OAC?

An OAC is defined(§ 26-259 of the New York City Administrative Code) as follows:

b. The term “outdoor advertising company” means a person, corporation, partnership or other business entity that as a part of the regular conduct of its business engages in or, by way of advertising, promotions or other methods, holds itself out as engaging in the outdoor advertising business.

c. The term “outdoor advertising business” means the business of selling, leasing, marketing, managing, or otherwise either directly or indirectly making space on signs situated on buildings and premises within the city of New York available to others for advertising purposes, whether such advertising directs attention to a business, profession, commodity, service or entertainment conducted, sold, or offered on the same or a different zoning lot and whether such sign is classified as an advertising sign pursuant to section 12-10 of the zoning resolution.

The Board has held that the presence of an outdoor advertising sign on a building created the reasonable inference that owner either directly or indirectly made space available on signs erected on its building for advertising purposes as part of the regular course of its business (Appeal No. 46583, 12/18/08, Tribeca Tower, Inc.).

Subsequently it held that unless a sign was exhibited for a brief time, a building owner who does nothing more than accept rent from an OAC is, nevertheless, engaging in the outdoor advertising business indirectly, and falls within the definition above (Appeal No. 0900072,7114/09, 126 Chambers Street; Appeal No. 09000123, August 13,2009, Stacy Maou; Appeal No. 48048, August 13,2009, JT Tai Co., Inc.; and Appeal No. 900071, August 14,2009, Robinson Callen.) It has also held that acceptance of rent is not a dispositive factor.

But in all these and other decisions sustaining NOVs related to outdoor advertising signs, the respondent property owner had engaged in a voluntary act, either by directly procuring an outdoor advertising sign for its building, or by entering into a lease with a third party to do so, or because it was aware that a tenant had entered such lease and allowed it to continue. Here, respondent did not so act, nor do I find that it had any role in or knowledge of, its tenant’s action.

The Board has held that failure to remove a sign that a tenant erected does not mean the owner has adopted the sign. Appeal No. 1100379, NYC v. Lexington North Realty Ltd., July 21 , 2011. And I find it not unreasonable that respondent should believe the cited sign was an MTA sign, given its unusual location.

I find that respondent did not engage in the outdoor advertising business and was not an OAC. This case fits within the decision in Suh You Pak.

As stated above, respondent is responsible for the violating conditions of its building, namely displaying a sign without a permit that is forbidden under the Zoning Resolution. However, all the NOVs here are designated class I violations. Class I sign violations are applicable to OACs. And the class is an element of defense. Because I have found that respondent was not an OAC, it follows that petitioner has failed to prove an element of the offenses charged.

Nor is respondent required to register as an OAC.

Accordingly, the NOVs are dismissed.