Tile deal costs state $5 million

CARSON CITY -- When all was said and done, the state of Nevada lost more than $5 million trying to get contractors to prevent tiles from falling off the exterior wall of the Sawyer Building in Las Vegas.

State Budget Director Andrew Clinger told the Nevada Board of Examiners on Tuesday that the state has accepted a $6.25 million settlement with a group of contractors. But he noted the state spent $11.8 million investigating the problem and replacing the tile.

The settlement cancels a trial that was scheduled to begin in January.

A panel of lawmakers also recommended approval of the settlement to the Interim Finance Committee, which meets today.

"Nobody really wins on this deal," said Sen. Bill Raggio, R-Reno, a member of the committee's subcommittee to review public works board matters. "We spent eleven-some million dollars to get the tile replaced to get back six million dollars. It's a lot better than eating all of the eleven-some million dollars that we had to put forth to get the tile back on that building."

During hearings in 2005, legislators argued the repairs would cost the state nothing because the falling tile problem was caused by faulty construction.

Tile began falling off the wall of the building in 2003 and 2004, forcing the Legislature to approve an emergency $1 million appropriation to install nets to prevent passersby from being hurt. Later the tile was replaced by other material.

The building on Washington Avenue was constructed in 1997 for $29 million.

Employees told legislators two years ago that 15 to 20 tiles fell from the wall on the west side of the building and five others fell near the building entrance. A tile falling from the sixth floor almost hit one Gaming Control Board employee. Tile debris actually fell into the pants cuffs of another employee.

The state Public Works Board accepted the settlement on Oct. 3. The Board of Examiners, chaired by Gov. Jim Gibbons, only listened as Clinger spoke of the agreement. The board had no authority to reject the agreement.

Under the agreement, the general contractor, Precision/Kitchell, will give the state $1.365 million, while the tile subcontractor will pay $2.85 million.

The Lucchesi, Galati Architects Inc. architectural firm will pay $500,000.

Review-Journal Capital Bureau writer Sean Whaley contributed to this report.