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December 20, 2014

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Fontainebleau builder agrees to six-month license suspension

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Justin M. Bowen

Fontainebleau Resort on the north end of the Las Vegas Strip is shown under construction.

Fontainebleau Resort

The Fontainebleau, construction stopped, is seen dark along the Strip. Launch slideshow »

Fontainebleau Las Vegas resort builder Turnberry West Construction Inc. has settled a complaint filed by the Nevada State Contractors Board by agreeing to a six-month suspension of its license.

The settlement, approved by the Contractors Board July 23, relates to a subcontractors' claim that it's owed millions of dollars for work on the casino-resort project on Las Vegas Boulevard.

Work on the $2.9 billion project, which was 70 percent complete, was halted in June when Fontainebleau filed for bankruptcy reorganization after major banks halted funding.

The banks said they did so because of cost overruns and other problems -- but Fontainebleau is seeking a court order requiring them to provide $656.5 million it says is needed to get the project back on track.

Miami developer Jeff Soffer is the developer of the Fontainebleau resort and also controls Turnberry West Construction.

While Fontainebleau has filed for bankruptcy protection, Turnberry West has not. Several subcontractors have sued Turnberry West in Clark County District Court alleging they are owed money for work on Fontainebleau.

The settlement with the Contractors Board involves contracts between Turnberry West and F. Rodgers Corp., which says that in one contract it was hired to install insulation and is owed $2.089 million for that work. Under a second contract for insulation, F. Rodgers says it is owed $1.933 million.

Under the suspension, Turnberry is allowed to continue work on current projects but is prohibited from taking on new jobs.

Under the deal, it agreed to resolve undisputed outstanding claims against its license with the Contractors Board.

Turnberry West also agreed to provide the board, within four months, a current financial statement for all cash accounts supporting its license limit. If the statement does not support the currently unlimited license limit, the limit may be lowered.

``If all the money-owing claims are not satisfied and a current financial statement is not provided that supports the license limit within ... six months timeframe, license number 67865, Turnberry West Construction Inc. shall be revoked,'' the settlement says.

Separately, Fontainebleau supplier ThyssenKrupp Safway Inc. asked the bankruptcy court in Miami on Friday for permission to pursue legal action in Nevada so it can recover funds due from Turnberry West and remove its scaffolding valued at $878,602 from the Fontainebleau project.

Safway claims Turnberry West has not made payments for renting the scaffolding since March 30 and now owes it $134,421. Turnberry West had agreed to pay $26,226 per month plus taxes of $1,800 per month for the scaffolding, Safway said.

``Safway seeks relief from the automatic (bankruptcy) stay to pursue an action for claim and delivery in the Eighth Judicial Court for Clark County,'' the company said in its motion. ``Included in that action will be a claim against Turnberry to liquidate and recover the costs of dismantling and demobilizing the scaffolding.''

A request for comment on the Contractors Board settlement and the Safway motion was placed Friday with Fontainebleau.

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