Signage often Slips through the Cracks

I came into the office a few months ago after a long weekend. The weekend had been a good one. There were waves down here in Florida, so I managed to get a few surf sessions in and that always puts me in a good mood to start the week.

Now normally I do not check my voice mails or emails first thing in the morning. That may sound strange, but I have found that if I can hold off for at least an hour, preferably two, I am way more productive. This allows me to actually start my day focusing on the most important tasks at hand (i.e. uploading pictures of my kids to facebook) before I get inevitably sidetracked by that crisis email or phone call. All kidding aside, this simple strategy has been a lifesaver for me. It works.

Anyway, I didn’t do that this particular morning. I made the crucial mistake of glancing at my email inbox and that is when I noticed 4 separate emails from Steven Jacoby.

Steven was a new client of ours. He had just hired us to handle the civil engineering for the development of a small outparcel in Daytona. Normally, my engineering firm wouldn’t take such a small job, but Steven’s situation was different. Steven was tied in with an international restaurant chain that was aggressively expanding in Florida. (I don’t want to say who the restaurant chain is, but I will say they make a nice cup of coffee.)

Steven had already built a couple of restaurants for this chain and he would be doing 5, possibly 10 more in the next 12 months. With that volume it made financial sense for us to provide civil engineering services.

I glanced at the subject line of Steven’s first email: We may have a problem on the Panama City site.

“We aren’t doing a project in Panama City”, I thought to myself, “this must be a mistake.”

I glanced at the next email subject line and it read: EMERGENCY! Bart check your voicemail, need help.

“This is exactly why I don’t check email first thing Monday morning”, was my next thought because I just knew my day was about to get completely sidetracked.

So, I checked my voicemail and there were several messages from Steven and he was frantic. Long story short, construction was nearly complete on a restaurant in Panama City when it became clear that the restaurant chain was not going to be allowed to put a sign up advertising their store. Except for the normal sign on the building above the front door, they would not be allowed to have any other signage anywhere on the property. There would be no freestanding sign out by the street.

You may not realize it, but signage is a huge deal, especially for an international company where image and branding are almost as important as the product.

Steven’s voicemail stated that the restaurant chain that he had just constructed a custom building for was threatening to walk on the deal if there is no freestanding sign for advertising. He had already spent nearly a million dollars on this project and there was about to be no tenant to pay the bills. And it wasn’t like he could turn around and get another tenant, because nobody local could pay the rents that this large company was willing to pay with their aggressive expansion campaign. Without this tenant, this deal would turn into a major financial loss.

Well, as you read this, you might be thinking “Bart, this isn’t even your project, how is this your problem?” And technically you’d be right. But it was my problem for this reason.

If the Panama City deal goes south then Steven’s relationship with the restaurant chain will go south. And that means the Daytona project, which we had actually been hired to do, could disappear. And those 5 to 10 other projects this year? Well, you get the idea, they’d be gone too.

So that is how at 9:00 on a Monday morning, instead of doing what I should be doing (bragging to my friends about the waves I caught this weekend), I found myself making phone calls to the Panama City planning department on a project that we weren’t even hired to do.

After a couple of hours of phone calls and reading city development codes, the problem was pretty clear. I have drawn a quick sketch below.



(I know. You are in awe at my artistic talent. Try not to let it distract you.)
The restaurant was built on an outparcel of a large shopping center development. If you look at the closeup in sketch #2 you will see that the shopping center’s main sign was located on the outparcel property where the restaurant was being constructed. (The shopping center had an easement but they no longer owned the land the sign was constructed on.)



According to the City, because the Shopping Center sign was on the outparcel property, the code did not allow the restaurant to construct its own sign because there already was one.

I know what you are thinking … “Can’t the restaurant just put its sign on the already constructed Shopping Center sign?”

Well, Steven the developer had that same idea and he called the owners of the Shopping Center to find out. But the answer was no. You see the Shopping Center has multiple tenants and all of their leases are very clear about how much signage there will be and who gets how much.

In order to add the restaurant sign to the Shopping Center sign you’d need to change every single one of the lease contracts. And they weren’t going to do that. Especially since the outparcel was already sold to Steven and at this point Steven didn’t have much bargaining power.

Steven was stressing hard. And rightly so. We needed a solution and we needed one fast. After looking at a number of options, the final solution that we came up with is shown in the following sketch.



The portion of the outparcel where the Shopping Center sign was located was sold back to the shopping center (for $1). All expenses for the transaction were paid by Steven the developer. Now Steven was able to construct his own sign on his property (shown at the north end of the parcel) and satisfy his corporate restaurant client.

Luckily for everyone it worked out, but the point of the story is that it all could have been avoided. A proper due diligence report would have clearly shown the potential sign problem before Steven ever signed a contract.

Steven could have even used this sign issue to negotiate a lower price for the land if he had been aware of it up front. But instead of making more money on the deal, he ended up losing part of the land he had purchased and paying all the legal and recording fees to do it.

As the saying in golf goes – The money is made or lost on the first tee my friends.

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