Root Outdoor Advertising, Inc. v. City of Fort Collins

Citations: 759 P.2d 59; 12 Brief Times Rptr. 942; 1988 Colo. App. LEXIS 203; 1988 WL 71419Docket: 85CA1454

Court: Colorado Court of Appeals; June 23, 1988; Colorado; State Appellate Court

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The Colorado Court of Appeals affirmed a trial court's declaratory judgment requiring the City of Fort Collins to provide just compensation to plaintiffs before enforcing its sign code, which mandated the removal of nonconforming signs after a five-year amortization period. The court ruled that the city's authority as a home-rule municipality does not exempt it from the just compensation requirement established by the Colorado Outdoor Advertising Act. The court emphasized that zoning regulations must adhere to state statutes regarding statewide concerns, and any conflict between local ordinances and state laws results in state law superseding local provisions. The court noted that the regulation of outdoor advertising along state highways is a matter of mixed statewide and local concern, and thus the city's ordinance was invalid to the extent that it conflicted with state law. The appeal was against the backdrop of established legal principles regarding home-rule authority and the necessity of complying with eminent domain statutes when requiring the removal of signs.

The Outdoor Advertising Act aims to ensure Colorado's eligibility for federal highway funds. It allows municipalities to implement local regulations on outdoor advertising alongside state laws, provided these do not endanger federal funding. Municipalities may impose stricter regulations as long as they comply with the Federal Highway Beautification Act and do not compromise the state’s funding eligibility. The Act mandates that just compensation be paid to owners when their advertising devices are removed, aligning with the Federal Highway Beautification Act’s requirement for compensation regardless of sign removal status. This compensation is necessary for effective control of outdoor advertising and is partially funded by the federal government. The Act prohibits enforcing the removal of advertising devices until the federal compensation is secured. Recognizing the economic impact, the Act allows nonconforming signs to remain until compensation is received. A key issue in the case concerns whether the City’s five-year amortization schedule for removing nonconforming signs meets the just compensation requirement. The trial court suggested that amortization might equal just compensation in some cases; however, it was concluded that amortization alone does not fulfill the just compensation obligation under both federal and state law.

City's argument relies on *Ackerley Communications, Inc. v. City of Seattle*, asserting that the Outdoor Advertising Act is not overridden by the Federal Highway Beautification Act, as the latter does not mandate just compensation for signs in commercial and industrial zones. However, the court disagrees, aligning with the California court's reasoning in *Metromedia, Inc. v. City of San Diego*. The court emphasizes that the Colorado General Assembly's intent to secure full federal highway funding necessitates strict adherence to both state and federal statutes, affirming the constitutional principle that private property should not be taken without just compensation, as established in *Srb v. Board of County Commissioners*.

The City also cites *City of Fayetteville v. McIlroy Bank & Trust Co.* and *Art Neon Co. v. City & County of Denver* to argue for amortization of billboards as a valid exercise of police power and a constitutional alternative to compensation. The court counters this by stating that statutes must be interpreted holistically, ensuring every element is meaningful. The Outdoor Advertising Act permits municipalities to use local police powers, provided they do not risk federal funding or conflict with state interests. The court finds *City of Fayetteville* inapplicable due to the absence of a superseding state statute in Arkansas, and *Art Neon* irrelevant as it predates significant legislative changes and court rulings that clarified the parameters of the Outdoor Advertising Act. Furthermore, the court notes that amortization merely provides notice to sign owners without implying compensation, reinforcing its position with references to *Battaglini v. Town of Red River*, which mandates just compensation for the removal of lawful advertising structures.

The New Mexico court held that granting an amortization period does not fulfill the statutory requirement for "just compensation" when required. The court rejected prior judicial reasoning and emphasized that under the Outdoor Advertising Act, no advertising device can be removed until federal compensation is available. Just compensation must be paid for each lawfully permitted nonconforming sign, as established in related case law. The court noted that just compensation is mandated by the Federal Highway Beautification Act, even if local laws necessitate the removal of nonconforming signs. 

The court clarified that the city may not remove these signs until federal compensation is available and highlighted that eminent domain proceedings are the only permissible method for removal apart from voluntary acquisition methods. The court further stated that fairness dictates that a condemning authority's liability must equal that of a private party regarding the property’s market value. The court affirmed that just compensation is the full monetary equivalent of the property taken, to be paid at the time of acquisition.

Additionally, the court did not address the city's arguments concerning the plaintiffs' administrative remedies and failure to conform their signs, as these defenses were waived. The court found no substantial issue under the Tenth Amendment regarding federal funding availability and affirmed the trial court's judgment.