THE SIGNAGE FOUNDATION FOR COMMUNICATION EXCELLENCE, INC.

The omni technique incorporates the market comparison, income capitalization, and matched paired analysis approaches into a single technique. Under this approach, the valuator can usually identify the "extra" income the sign brings to the business. In essence, the question to be answered is: "What, if any, economic benefit is there for having on-premise signage?" Using this approach, in 1996 a certified, Florida-based signage appraiser, Richard Bass, did an economic analysis of the impact of a newly installed, on-premise freestanding sign that identifies a men's clothing store located in Sarasota Quay, a mixed-use retail, office and restaurant complex.^[52]

Prior to the installation of the new sign, the retailer had no external visibility to either of the major arterial streets adjacent to the mall. The business had been in the same location for eight years and was making a profit. A major tenant moved out of the retail space resulting in available on-premise signage for the men's store, and a sign had been installed in December 1995. Subsequent to the sign's installation, a one-year analysis indicated a seventeen percent increase in sales volume for the business. Can this increase in revenues be attributed solely to the signage? According to Bass, yes it can. Further, as a result of the increased advertising effect of the on-premise sign, the storeowner was able to reduce his expenditure on print advertising from $24,000 in 1995 to $13,000 in 1996. The appraiser looked at other non-signage factors that could have had an impact on sales during the study period, including roadway improvements, presence of competition, the addition of other major draws to the center; he found that there had been no significant changes. However, during the period of time the signage effect was studied, two other small retailers in the same complex that did not add signage went out of business, and another relocated.

Assuming for the moment that the example business' sign had to be removed due to a regulatory "takings" by the municipality, and further assuming that the subject jurisdiction required monetary compensation because the sign was considered a partial real estate interest, the cost to the municipality might be considerable.If the increase in sales volume can be traced to the sign, then its compensatory value will be based on this increase. For illustration, assume that the increase in sales following sign placement averaged $20,000 per year. To protect the business's income stream - and based on a realistic capitalization rate of 07% - the compensation for removal of the sign could be as much as $285,000. On the other hand, if one looked only at the savings in other media advertising costs the business enjoyed because of its on-premise sign, at a capitalization rate of 07%, the compensation would be $160,000. But because other-media advertising appears less effective in increasing sales volumes, the actual award might be somewhere in the middle, e.g., $200,000, which if invested at 07% would generate income generally sufficient to sustain pre-regulation sales volume as well as provide funds for other-media advertising.

In yet another compensatory scenario, one might assign a "remaining useful life" to the sign, and structure compensation accordingly. Thus, if it was determined that the sign had a remaining life of 10 years, the award might be $200,000 as compensation for 10 years of reduced sales volume, or it might be $110,000 as compensation for increased advertising costs, or again somewhere in the middle to compensate for both lost income and increase in advertising costs.

Based on the above example, then, it is clear that municipal efforts to retroactively limit or restrict on-premise signage, particularly size or height, should be undertaken only with great caution by the municipality and vigorously opposed by businesses that can prove adverse economic impact will result from downsizing or removing on-premise signage legally placed under the existing code.