Drawn-out arbitration case dies

Las Vegas officials decided Wednesday to put to rest a long-running arbitration case over the construction of the Kellogg-Zaher Sports Complex instead of appealing a recent ruling to District Court.

The move was presented as a practical financial decision given the time and expense that proceedings with Asphalt Products Corp. have already sucked up, and the likelihood that an appeal would be just as expensive while resolving little, if anything.

"There are no winners in this one," City Attorney Brad Jerbic said.

"Yes, there is," countered Mayor Pro Tem Gary Reese. "The lawyers. The arbitrators."

Jerbic said the city racked up $3.5 million in legal costs during the proceedings, and he estimated that APCO spent at least that much.

An arbitration panel ruled 2-1 recently that the city should pay $2.08 million to APCO to settle claims arising from the park's construction. The complex, on Washington Avenue between Buffalo and Durango drives, is home to 11 soccer fields and the Amanda and Stacy Darling Memorial Tennis Center.

The allegations included cracks in tennis courts that were designed to attract professional tournaments, defective welds in fencing, and missing playground equipment, among many other items.

The city has most of that money available, said Mark Vincent, the city's chief financial officer. $1.1 million of that amount consists of final payments that were held during the proceedings, and there were some surplus funds from the project set aside. Still, $219,300 will have to be moved from a fund for parks capital projects to satisfy the award.

APCO's original claim, filed in 2005, sought $6.5 million.

The city had the option of challenging $980,000 worth of damages awarded by the ruling. A likely scenario, Jerbic said, was that a judge would send the case back for more arbitration that would cost as much or more than the settlement.

The arbitration panel's majority opinion said that problems at the park stemmed from the city rushing incomplete plans to the contractor to finish construction more quickly. In one paragraph, the ruling singles out the office of former Councilman Larry Brown for unduly pressuring staff members to get the project rolling.

It's a conclusion city officials dispute, saying APCO's work on the site, not city plans, should be at issue.

Brown, now a Clark County commissioner, visited Wednesday's council meeting. He said that he treated the project the same as any other and that he had "no apologies for my role in Kellogg-Zaher."

The wrangling might be over, but one issue remains: cracks in the tennis courts at the Darling Center.

"They are still cracked," said Councilman Stavros Anthony, who inherited the situation when he was elected to represent Ward 4 last year. "We're just going to have to find a way to fix them.

"Obviously, if money is involved, that's going to be an issue. The courts are still playable. They shouldn't have cracks, and that's all we can do at this point."

The scenario faced in the case is not likely to repeat itself because of a change in state law.

It used to be a requirement that public works project disputes had to be settled by binding arbitration.

Now governmental bodies are merely required to use some type of alternative dispute resolution before taking a case to court.

Las Vegas' contracts now contain a clause calling for "nonbinding mediation," Jerbic said. This process is usually over in less than a day.

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