Arbitrators rule against city over sports complex contract

The city of Las Vegas should pay $2.08 million to the contractor that built the Kellogg-Zaher Sports Complex, an arbitration panel recently ruled.

Two of the three arbitrators said the city provided incomplete and error-containing plans to Asphalt Products Corp., the main contractor on the park, which was completed in 2005.

That led to construction delays and cost increases, the ruling states, laying the blame squarely on the city.

“The city, by its conduct, intentionally interfered with APCO’s ability to timely perform and was in first material breach of the contract,” the ruling states.

City officials could appeal $980,000 of the award to District Court. According to city documents, there are limited means of appealing a decision based on errors of law. The Las Vegas City Council is scheduled to hear the pros and cons of an appeal at its meeting Wednesday.

APCO was awarded a $29.7 million contract to build what was then known as Washington-Buffalo Park in December 2003. Construction was originally supposed to take a year but dragged into 2005, which is also the year the park was renamed.

APCO filed a $6.5 million claim against the city, saying delays and problems with the plans entitled the company to damages. The city countersued, alleging defective work on APCO’s part.

Las Vegas spent more than $3 million defending its claim, City Attorney Brad Jerbic said.

In the end, arbitrators granted $2.4 million of APCO’s claims and $280,770 of the city’s, leaving the balance they say is due APCO.

Jerbic said $1.1 million of that is “retention” — that is, a final payment held until the end of a project. He said that amount was never in dispute.

The $980,000 consists of damages the arbitrators said the city owes to APCO and various subcontractors.

If the city did appeal, Jerbic said, there’s a good chance the matter would end up right back in arbitration, which could easily cost more than $980,000.

“I think there are substantial and real issues we could raise, but I am not going to recommend that the city appeal this,” he said. “It’s been very costly litigation.”

The remaining arbitrator, James Olson, took a sharply different view than the majority opinion. He said APCO didn’t prove the problems with the plans contributed to the delays and said the other arbitrators misconstrued the law in reaching their conclusions.

“If all plans were required to be perfect before construction began, nothing would get built,” Olson wrote in his dissent.

The majority opinion was written by arbitrators Thomas R.C. Wilson and William F. Haug.

Olson said the city should be due $5.8 million for defects, including $3.3 million for replacing tennis courts at the Amanda and Stacy Darling Memorial Tennis Center, which is part of the Kellogg-Zaher Sports Complex.

The other two arbitrators acknowledged that the tennis courts have “excessive” cracks, but said it’s a “cosmetic problem.”

“The Washington-Buffalo tennis courts are the best tennis courts in Las Vegas,” they wrote.

Despite the conflict, Las Vegas has not been shy about promoting its tennis center, which has 23 tennis courts, including a stadium court with seating for 2,800 people.

The city was one of 10 finalists for this year’s Best Tennis Town competition organized by the U.S. Tennis Association.

And on Oct. 26-28, the courts were the site of the Las Vegas Invitational Tournament, which brought in eight players ranked by the Association of Tennis Professionals for a weekend of competition.

Contact reporter Alan Choate at achoate@reviewjournal.com or 702-229-6435.