Mayor Nutter said Monday that he would veto a controversial wall-wrap bill, which City Council passed Dec. 1 despite a letter from the state saying it violates federal law and jeopardizes federal highway funding for the city.

The wall wrap, planned for a building at 7th and Willow near Callowhill Street, would violate Federal Highway Administration regulations and the Highway Beautification Act because it would be within 660 feet of the Vine Street Expressway, according to the Dec. 1 letter from the Pennsylvania Department of Transportation.

On Monday, Nutter called the bill "bad public policy" and "probably, unfortunately, a very, very bad example of, in essence, spot zoning." He said the city needs "a more-comprehensive policy around issues related to wall wraps and that kind of advertising."

Nutter's remarks came after the Daily News asked about a legal memorandum sent to him last week by City Solicitor Shelley R. Smith pointing out "a serious legal issue" with the bill. The memo, dated Dec. 8, said the bill "makes just one zoning change to the area within its defined boundary: it permits a single wall-wrap billboard on a specific building."

Federal Highway Administration regulations consider that kind of change "sham zoning," Smith wrote.

The building owner, Callowhill Center Associates, which had been run by New York developer Myron Berman, has fought the city in court after being cited for erecting illegal wall-wrap signs in 1999, Smith's memo said.

The building, which has an illustration of Benjamin Franklin and the words "Electric Factory," can be seen by motorists from the Ben Franklin Bridge and the Vine expressway.

Noting that the zoning-code commission is addressing outdoor advertising, Nutter said: "We should not be doing these on a building-by-building, one-off kind of way, and we should have a more-comprehensive policy about how to deal with wall wraps and certainly any wall wrap that involves advertising. . . .

"I am going to veto the bill, and I'm asking certainly as many members of City Council as possible, just dealing with the opinion and what is at risk, to support that veto."

Councilman Frank DiCicco introduced the bill Sept. 8. On Dec. 1, it passed by a vote of 12-5, with some who voted against it citing the letter to Council President Anna Verna and DiCicco from PennDOT regional executive Lester C. Toaso.

DiCicco would need 12 votes to override a mayoral veto.