Billboards: Commercial Lot & Billboard Easement

[David VanSteenkiste]

I know almost nothing about billboard investing except what I recently learned on a Ken McElroy podcast. Here is what I have. I recently acquired a prime commercial lot on the main drag in Coolidge Arizona. Bought the lot for almost nothing and will flip it for a nice 2,000% (not a typo two thousand percent) profit. But before selling it I want to investigate creating a Billboard Easement so that I can keep that easement and either build my own billboard and lease it out or whatever. I just want to create the option prior to selling it. 

I understand that the first call needs to be to planning and zoning to see what they will allow. But beyond that, what do I do, who do I call next? 

*BTW, if there is a billboard expert here who can help me, I am happy to help you understand how to find and flip land for huge margins. 

[Seth Williams]

Hey @David VanSteenkiste! Here are some things to think about:

Zoning: You can typically construct billboards in commercial, industrial, and sometimes agricultural areas, but almost never in areas zoned for residential (so, the fact that your lot is zoned commercial is a good thing).

Keep in mind, though, commercial zoning isn't the only issue you'll need to pay attention to. There are federal, state, and even city ordinances that govern the use of outdoor advertising (how big they can be, how far from the road they need to be, whether they're allowed at all, etc). Get your state ordinance and the ordinance for the city your property is in (hint: if your property isn’t situated within a city, it will typically go by the state’s ordinance).

Traffic Count: I'm not sure what kind of traffic is going by this property of yours, but the most ideal billboard locations are on roads with traffic of at least 10,000 cars per day. If you aren't sure what the traffic count is, you can get road maps and traffic count maps from the state department of transportation (or just do a google search for traffic counts by county or city and you'll probably find something). More traffic = more money. This will tell you which roads to focus on (they will be mostly interstates and county roads).

Spacing Between Signs: The federal ordinance requires that there should be at least 250 feet of space between a proposed sign location and any other existing billboards (or 500 feet spacing from at-grade intersections), so check the neighboring properties to see if there are any existing billboards already there.

In a lot of states, there will be more restrictive spacing requirements than the federal ordinance, and many cities will be even more restrictive than the state. Some states might require 500 feet between signs, others may require 800+ feet.

Distance from Road: For federally funded roads in non-rural areas, the sign location should be within 660 feet of the road. This is another common area where states and cities can be more restrictive than the federal rules. Figure out what the spacing away from the road needs to be in the state/city where you’re looking, and make sure the property provides the space needed to make a billboard location work.

Moratoriums: I'm not sure what Arizona's situation is, but check to see if there are any moratoriums on new billboards. I looked into this in Michigan a couple of years ago and found that the entire state has a "cap and replace" rule in effect right now (you can't build a new billboard unless you take another one down somewhere else), which makes it much harder to place new billboards for the time being. States like Alaska, Hawaii, Vermont, and Maine don't allow billboards at all.

You could also try calling an outdoor advertising company like Lamar, Viacom, Clear Chanel, or CBS Outdoor to see if they have a presence in Arizona. If they do, they can probably look at your property and tell you pretty quickly whether it's a good billboard candidate or not.

Good luck!