Billboard Fight May Change State Landscape

By TED ROHRLICH

Aug. 6, 2002 12 AM PT

TIMES STAFF WRITER

Mark Kudler first looked at the Century Freeway viaduct a decade ago and didn’t see concrete. He saw gold.

To the billboard entrepreneur, each passing car, each pair of eyes was worth money--$15 million total, he figured.

Once Kudler went to work, he wasn’t the only one who saw a chance to get rich.

A billboard lobbyist asked Kudler for $1 million to help get approval from the city of Lynwood. A competitor promised the city as much as $4 million. The mayor’s sister got in line for up to $1 million.

Kudler’s vision triggered a volatile mix of big money and small-town politics that has raised questions of corruption and influenced local elections.

Now, Lynwood’s billboard war threatens to spill past the borders of this working-class city in south Los Angeles County and dramatically change much of the remaining advertising-free landscape of California.

A lobbyist in the Lynwood fight, caught in the continuing stalemate, has taken on the state law that bars billboards from the 80% of California freeways bordered by landscaped greenery.

Today, a state Senate committee will consider a proposal that gives local governments, not the state, primary control over where billboards can be built.

The proposed legislation might solve Lynwood’s troubles, but not Kudler’s.

Kudler, the scion of a family firm that built billboards for others, wanted to make his mark in Lynwood by building them for himself.

He figured that a significant gap in landscaping along the Century Freeway’s viaduct, which towers several stories over the nearest blade of grass, made it an exception to the state’s prohibition.

He began signing long-term leases with private property owners whose land bordered the viaduct. Then he asked Caltrans for state permits to build what would be the largest cluster of billboards on the freeway, which extends from Norwalk to Los Angeles International Airport.

Caltrans refused permission, and Kudler spent years and $300,000 fighting the state agency in court, eventually winning approval for his family’s firm, Bulletin Displays.

He stood to make $15 million in advertising revenue over the life of the signs, which base rents on the number of people who drive by and their estimated buying power.

While Kudler was still fighting in court, he began seeking building permits he needed from the city.

He reached out to Paul Richards, Lynwood’s mayor at the time and the city’s most influential officeholder.

But Richards was a busy man. By 1997, Kudler had spent a year trying to get a meeting.

Finally, a friend suggested that Kudler contact a billboard industry lobbyist who knew Richards. Ken Spiker Jr.’s own family firm had long been involved with the Independent Cities Assn., where Richards had served as president.

Spiker got Kudler the meeting, and then offered his services in exchange for 7% of billboard revenue. Kudler figured that would come to about $1 million.

Kudler’s father, Robert, opened Spiker’s letter and scrawled on the envelope, “Mark, who are these guys and what the [expletive] are they talking about re 7%?”

Kudler said his father told him it was a shakedown.

Spiker said he customarily asked for a percentage. Both he and Richards deny any improprieties.

But the Kudlers, who pride themselves as fighters, declared war.

They tried to fight City Hall by changing it.

In 1997 and again in 1999, they backed opponents of Richards and Richards’ council allies but lost both times.

Kudler, of Buena Park, then faced the challenge of trying to win city permits from a council controlled by Richards, who describes Kudler as “mean and wicked.”

Kudler didn’t give up. He contacted Richards’ nephew and asked him to engage in some back-channel diplomacy. He said the nephew, Julio Naulls, told him he could get the needed city permits for $25,000 in cash.

Kudler said he refused to pay, figuring the $25,000 was “the tip of the iceberg.”

Kudler’s account was verified by Enrique Vela, a political consultant who said he accompanied Kudler to a meeting with Naulls.

Naulls, who described himself as a political consultant in Lynwood and neighboring Compton, denied Kudler’s account, saying, “The matter of compensation never came up.”

Richards said he knew nothing of Naulls’ alleged solicitation and that Naulls was not representing him.

Richards said he was not on speaking terms with Naulls at the time. Voter registration records show that Naulls was then living at Richards’ house.

Naulls was one of five of Richards’ siblings and nephews who gave Richards’ address as their own to voter registration officials, records show.

Richards said none of them actually lived with him and offered a series of explanations.

He said, for example, he believed his father, now deceased, encouraged relatives to declare Richards’ house as their permanent residence as a symbolic way of holding the family together.

After Kudler rejected Spiker’s offer, the Los Angeles-based lobbyist found another client, Regency Outdoor Advertising.

Kudler was offering the city relatively meager benefits: a program to tear down some existing billboards, discounted advertising for local businesses, $60,000 to repair aging storefront signs, and one unusual palliative, financing for a “museum of slavery.”

In a letter to Richards dated Feb. 1, 2001, Spiker presented Regency’s much more generous offer. The four-page proposal called for Regency to pay the city $2.4 million for six signs around the viaduct and an amount to be negotiated for 12 signs elsewhere along the freeway.

Two months later, Richards voted to name his sister, Paula Harris, the city’s exclusive negotiator on the deal.

Richards voted to put Harris in charge of negotiations that would earn her 20% of whatever the city collected. Because the final deal called for the city to get $4 million, it meant up to a $1-million fee for her.

Richards voted even though he said he wasn’t exactly sure what his sister did for a living. Richards said he knew only that she has been “in banking and other related businesses for 30 years.”

Harris said she is a manager in Bank of America’s legal department and has been an employee for 35 years. She declined to answer other questions, referring inquiries to her lawyer.

What Harris did to earn a fee is also a matter of dispute.

The letter Regency originally sent to Richards proposed many of the same terms that appeared in the nearly $5-million agreement later hammered out under his sister’s auspices.

The city also employed an attorney to negotiate contract language with representatives of the billboard company.

Harris, through her attorney, Rickey Ivie, defended her work, saying she earned her commission in arduous talks that he led. Richards also defended the arrangement, noting that his sister would be paid only if the billboard company and the city made a deal.

Richards, an attorney, also said there was no need for him to disqualify himself from a vote that could make his sister rich.

State conflict-of-interest law prohibits a public official from taking actions that would enrich himself or a member of his immediate family, which is defined as a spouse and children. Adult siblings don’t count.

Harris, too, was registered to vote at Richards’ address.

She got the contract as Allied Government Services, a sole proprietorship.

Her nephew, Julio Naulls, who had allegedly asked Kudler for $25,000 to get city permits, wrote Lynwood on his aunt’s behalf.

Identifying himself as Allied’s vice president of government affairs, Naulls suggested that the city hire Allied on a contingency basis both to negotiate fees for new billboards and to collect fees from billboard scofflaws. In both cases, Allied would get a commission equal to 20% of whatever the city got.

Harris was already making money in Lynwood.

The City Council required a local bus operator to pay her $90,000 a year for “supplemental services” as a condition of getting its contract renewed.

Seven months later, the operator complained that Harris had not done any work.

Despite trouble with the bus contract, Naulls’ letter got a quick response. Within days, the request was placed on the agenda for a special council meeting and approved.

Only one council member, Arturo Reyes, a Richards rival, had a question.

Reyes asked how much the city could expect to make from the deal. He got no answer, but voted for the proposal anyway, along with Richards and two of Richards’ allies, figuring that, because the arrangement called for payment only if the firm brought in a new deal or collected old debts, the city could lose nothing. Reyes said he cast his vote not knowing Harris was Richards’ sister.

Harris signed a contract with the city on behalf of her company. She retained Ivie to negotiate with Spiker, the lobbyist who represented Regency.

The details of Regency’s deal called for it to pay for the use of city-owned land, alongside, on and over city streets as billboard sites.

California law prohibits use of city streets and is murky about allowing billboards to hang over them.

But the legislation pending in Sacramento sponsored by Spiker and other billboard interests would solve that problem.

Last fall, with the Regency negotiations well underway and Richards running for reelection, Kudler expanded his offensive against Richards, who has been a member of the Lynwood City Council for 16 years.

Kudler filed a racketeering lawsuit against Richards, Spiker, Harris and Naulls in federal court. He alleged without proof that Allied had been created as a vehicle to funnel hundreds of thousands of dollars in bribes to Richards through his sister. He later dropped the case.

Those named in the suit denied Kudler’s charges. They said that the day after the lawsuit was filed, its allegations began appearing in pamphlets funded by Kudler, aimed at defeating Richards and his council allies.

Because the charges had first been made in a lawsuit and were only being repeated in the pamphlets, it was difficult for Richards and the others to sue for defamation.

Richards retained his seat, but another member of his council majority lost, shifting the balance of power.

Before the new council took office, Richards and his allies completed the billboard deal with Regency.

But as soon as the new council majority took over, they rescinded Regency’s and Allied’s contracts, and voted to restart negotiations.

This time, Bulletin Displays sought to match Regency’s offer. Kudler said he is now offering to pay the city between $4 million and $5 million.

“But the money will end up going to the treasury rather than to somebody’s sister,” he said.

Regency has threatened to sue the city.

Harris has filed a claim against the city for $2 million--the nearly $1 million she said she is entitled to as commission for the Regency deal and another $1 million she anticipated would have come from negotiating future billboard deals.

Harris’ lawyer, Ivie, said he is perplexed. He said he does not understand how the new council could rescind a deal in which Regency would pay nearly $5 million to a struggling city with an annual budget of about $50 million.

“The heck with one of the representative’s sisters being involved,” Ivie said. “Why turn down $4 million? Does that smack of something insane?”

Pointing to Kudler’s campaign contributions, he said successful candidates for public office are often “sensitive to their backers.”

He suggested politics might be at work.

Spiker, too, saw a political opportunity.

In recent months, he drafted a bill that would give cash-starved cities greater leeway to follow the profit-sharing model he tried to set up in Lynwood.

The bill, carried by state Assemblywoman Jenny Oropeza (D-Long Beach), would give cities financial incentive to approve signs visible from hundreds of miles of landscaped freeways, where they are now banned.

Spiker said he already has deals lined up with 25 cities and school boards.

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Billboard Bonanza

A state Senate committee will consider a lobbyist’s proposal to remove restrictions on freeways in the state where billboards are now barred,potentially transforming hundreds of miles of freeway landscapes into billboard havens. Locations and miles of “landscaped freeways” in Southern California: Landscape Freeways by County

Los Angeles

Fwy. Miles

2 5.56

5 34.1

10 32.66

57 3.84

60 18.92

91 9.95

101 30.2

105 17.58

110 26.82

118 11.18