A billboard company has activated a digital sign along Loop 101 in northeast Phoenix in violation of city regulations.

The sign, east of Cave Creek Road, lacks the required permit, a city official says.

The structure has been controversial since it was first proposed in mid-2010. The east face began broadcasting digitally in May.

CBS Outdoor, which owns the sign, persuaded the Phoenix Board of Adjustment to approve the sign, which appeared to fail to meet the standards in the city’s billboard ordinance. The City Council declined to challenge the decision.

But the west face of the sign, facing eastbound traffic, was permitted only as a static sign.

Under the old ordinance, which was replaced by an updated law in December, the west face could not be activated digitally because it was in sight of a residentially zoned property.

But when the ordinance changed, that barrier disappeared. The new ordinance says digital signs are prohibited if visible from property that is both residentially zoned and used as a home. The affected property is used as a plant nursery.

So about two weeks ago, CBS Outdoor activated the west face. But according to Phoenix planner Alan Stephenson, CBS Outdoor did not get the needed permit to activate a digital sign, and the Phoenix Planning and Development Department is preparing a notice of violation for the billboard company.

In addition, the planning department is awaiting an opinion from the Law Department on whether activation of the west digital face violates the new ordinance by operating on Loop 101, where billboards are forbidden under the updated ordinance.

John Clements, vice president of CBS Outdoor, said he had no comment.

CBS Outdoor has applied for a permit, but Stephenson said the planning department is holding off on the request because of a separate lawsuit, in which the Arizona Court of Appeals said digital billboards are illegal on state highways.

The lawsuit, filed by an organization called Scenic Arizona against American Outdoor Advertising, is still in progress. Cameron Artigue, attorney for Scenic Arizona, said the company has won two extensions in the time required to appeal to the state Supreme Court. Artigue said he is certain American Outdoor will appeal the decision. Stephenson said the planning department cannot act until the issue is resolved.

Anti-billboard activists were outraged by CBS Outdoor’s action.

“This is a perfect example of billboard-company arrogance, activating a digital billboard without the appropriate permission from the city and knowing it will impact neighborhoods,” said Jim Mapstead, the volunteer chairman of Save Phoenix Views, an initiative campaign working to place tighter restrictions on billboards. “When you couple flouting the law with filing a lawsuit to keep our initiative off the ballot, you see what the billboard companies are all about — making a profit at the expense of residents and our scenic views.”

CBS Outdoor sued to stop Save Phoenix Views’ initiative effort on the grounds that zoning matters, under previous court decisions, cannot be challenged through the initiative process.

Save Phoenix Views’ attorney, Andrew Gordon, said he is confident the initiative will pass court muster.

The Save Phoenix Views campaign has until May to collect more than 25,000 valid signatures to get a different billboard ordinance on a city ballot. It would forbid new billboards as well as conversion of static billboards to digital along city streets and highways.