These advertising “murals” in the downtown club district have city officials battling with lobbyists. Photos by Richard M. Brooks

Hours before entourages of hipsters clad in the hard-core of name-brand chic and hundred-dollar T-shirts descended upon the gritty downtown Miami club district, a man pushed a shopping cart down the street overloaded with his possessions. Nearby, an elderly woman sat on an abandoned wooden planter, craning her neck to peer down a benchless North Miami Avenue as she waited for a bus in the shade of a tree. A building-sized ad for Jaguar towered behind her.

In the urban core of the downtown club district, one word says it all: location, especially when it comes to advertising.

There are as many as 35 unpermitted advertising murals in Miami, amounting to $2.5 million in fines not collected by a city that expects to see a $20 million shortfall next year, according to Miami Commissioner Marc Sarnoff.

City officials have discussed how to regulate “mural” advertisements since 2004, but the commission has never voted on the issue. Then Sarnoff waged war against a dream team of lobbyists and proposed an ordinance to regulate the huge, and illegal, ads cropping up all over downtown buildings. That proposal was quietly pulled off the Jan. 24 commission agenda. Now, the city manager’s office has proffered a new, more business-friendly version of the original plan that would allow far more downtown murals and charges less in fines and fees. Both plans will be presented to the commission Feb. 14.

“Sarnoff is trying to regulate the visual pollution,” said Peter Ehrlich, one of Sarnoff’s consultants. Ehrlich estimates that a mural ad visible from I-95 can bring in as much as $40,000 per month, with half of that going to the outdoor advertising agency and half to the property owner.

Sarnoff’s proposed ordinance would create a downtown zone, bounded by the Miami River, I-95, Biscayne Boulevard and Northeast 15th Street, where mural advertisements would be permitted. However, his proposal would allow just 15 permits in that area, with none allowed within 500 feet of residential properties.

The proposal would mandate strict licensing requirements, background checks for mural advertisers, experience in the outdoor advertising field, public liability insurance among other stipulations. Applicants, who would be chosen through a lottery process, would also have to pay $2,500 to prequalify, secure a $1 million bond and pay $10,000 per year in application fees and between $6,000 and $10,000 per month for each mural. Half of the money generated would go to the Miami Arts and Entertainment Trust Fund, the other half to park site acquisition.

“The mural legislation in question was not considered by the City Commission” on Jan. 24 because “it was agreed that additional time was needed to further [vet] the legislation proffered between the administration and the sponsor (Commissioner Sarnoff and his staff),” according to a statement from City Manager Pete Hernandez’s office.

However, the city crafted a version more lenient to advertisers and property owners. It allows advertisements to cover windows, exempts government buildings, reduces fees to $8,000 per month and allows the ads to cover up to 20,000 square feet of wall space, as opposed to Sarnoff’s 2,000. The new version also increases the size of the permitted zone for murals.

“I think the lobbyists pretty much control the ordinance,” Sarnoff said. “My version was the version the city crafted two years ago — before the lobbyists got involved.”

The city of Miami’s 2008 lobbyist list reveals four individuals registered to lobby for the mural issue: über-lobbyist Ron Book; Francois Illas, Miami Mayor Manny Diaz’s onetime chief of staff and a lobbyist for Fuel Outdoor Advertising and World Wide Rush, LLC; former City Commissioner Rosario Kennedy, a lobbyist for City Outdoors and Muralis, LLC; and former state Rep. Manuel Prieguez, a lobbyist for Capitol Outdoor.

“The properties are owned by wealthy nightclub owners,” Ehrlich said. “They’re pocketing tens of thousands of dollars every month.”

Mural-plastered buildings line the streets of the downtown club strip on Northeast 11th Street. At 1035 N. Miami Ave., an ad for Jaguar wraps around the corner of an otherwise nondescript building, with a Majestic Properties sales sign hanging below it. Sky Vodka pays Fuel more than $40,000 per month for a similarly sized ad on a neighboring building. According to code enforcement records, the property owes the city $242,500 in fines.

“We pay our fines,” Fuel Outdoor CEO Mike Freedman said.

Freedman said Wednesday he was not aware that any proposed mural ordinance had been placed on the commission agenda. “I don’t believe our lobbyists have the power” to affect an ordinance, he said. “I wish I had that type of power, but I don’t.”

About a block away, the building at 1236 N. Miami Ave. displays a building-wide car ad in Spanish. That property, owned by Fast Park II, LLC, currently owes about $39,000 in outstanding fines.

Down the street, the property at 1040 Biscayne Blvd. displays a stories-tall iPod mural for which the property owner, 1040 Biscayne Association Inc, owes the city $242,500 in fines.

“There’s a tremendous amount of money involved,” Ehrlich said. Outdoor advertising is “the nation’s second biggest lobby. Sarnoff brought up the ordinance to regulate murals in July and the administration wouldn’t let it go on.”

Although the ads change with the season, the mural discussion has been going on for what seems like forever.

City records from as early as May 2005 show that commissioners had requested a staff update on mural regulations and “anticipated changes to the code.”

Then in March 2007, advertising agency Fuel Miami, LLP, a subsidiary of New York-based Fuel Outdoor, was awarded a bid to build 600 new Miami bus shelters in three years. Heralded by elected officials as a means of doing away with the city’s “barbecue benches” and revitalizing public transportation, the city traded Fuel Miami the benches in exchange for $12 million in advertising revenue generated from ads on 100 of the benches. The deal took place in a no-bid contract orchestrated by City Manager Hernandez.

Hernandez can legally ask the City Commission to approve a vendor contract and not entertain bids from other companies if the bid process would be neither “practical nor advantageous” to the city. The commission passed the item.

At the time of the contract, Fuel already had advertising rights to 1,700 of the city’s 1,900 bus stop locations. Those rights expire in 2017.

About 200 bus stop shelters that were installed under a previous contract with Sarmiento Advertising Group, LLC, came under Fuel’s maintenance via a contract that expires in 2012. At that time Fuel has the exclusive option to extend its contract another five years. In November 2006, the Miami City Commission approved Fuel’s complete buyout of Sarmiento, allowing Fuel to maintain 89 percent of the maintenance and advertising rights to city bus benches.

In May, Fuel jumped into the mural game by purchasing local mural advertising company World Wide Rush. Fuel later hired one of Miami’s top code enforcement officers for its Dallas area operations. Irain Gonzalez, a former aide to Mayor Diaz, left his code enforcement position citing Miami property owners for having illegal murals to assume a position seeking out sites for the very advertisements he was previously paid to regulate.

“We always wondered why there was no enforcement,” Ehrlich said.

Late last year, Fuel Outdoor, City Outdoors, Muralis, Kennedy and other outdoor advertisers donated funds to the re-election campaign of Miami Commissioner Angel Gonzalez. Gonzalez was the driving force in removing the mural ordinance from the agenda when it first appeared almost six months ago.

In total, outdoor advertisement companies gave Gonzalez’s campaign about $12,000. Book, his law firm, Muralis, Kennedy, Club Space owner Louis Puig and other related entities also donated money to the re-election campaigns of Sarnoff and Commissioner Tomas Regalado. Commissioner Michelle Spence-Jones accepted thousands of dollars in contributions from the owners of mural-adorned properties during her 2005 campaign.

“We spent eight months negotiating this ordinance,” Sarnoff said. The code proposed by the city manager “allows 20 more murals than I have, and murals up and down Biscayne [Boulevard]. It’s more or less opening the city up for business,” he said. “It’s up to three commissioners to do the right thing.”

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