Board to re-examine complaints over work on Meridian condos

The Nevada State Contractors Board has reopened its investigation into the condo conversion at the Meridian, an upscale but financially shaky and lawsuit-ridden community near the Strip, according to a Jan. 24 letter from the board.

Unlicensed contracting is the crux of the case, which the board reopened after a small group of Meridian owners met in mid-January with Dan Hammack, the board's enforcement chief, to go over additional documentation.

Owners believe the state should pursue penalties if a nationally known developer spearheads work by unlicensed contractors. In this case, some of the work is substandard as well as performed apparently without a contractor's license. But code enforcement is not the contractors board's job.

Disgruntled condo owners gave board investigators purported internal memos, contracts and emails by and between the Meridian's Chicago-based developer -- American Invsco, which touts itself as the nation's leader in condo conversions -- and Koval Flamingo, the Nevada limited liability company that was formed to assist in the project, located at the intersection for which the LLC is named.

The Meridian owners say they found the internal papers at various times, in boxes abandoned in public areas of the Meridian, after the homeowners association won a state court order ousting Koval Flamingo and several other parties from the premises.

Art Nadler, a spokesman for the board, declined to talk about the Meridian. "We can't comment on pending investigations," he said.

In late November, the board had closed its file on a complaint by Frank and Amy Taddeo that unlicensed contracting took place in the unit they own at the Meridian, 250 E. Flamingo Road. Investigators closed it because they could find no evidence, according to the board's Nov. 22 closure letter.

In addition to electrical and plumbing violations, the Taddeo unit is one of many that has luxury floor tiling too heavy for the wood-frame structure, according to county building inspectors.

The Taddeos attended the Jan. 13 meeting at the contractors board office in Henderson, as did Meridian owners Robert Vance and Dennis Noto. Board lawyers will review the Meridian case again in light of the new paperwork, Hammack told the visitors.

By Nevada law, if unlicensed construction work is more than two years old when the board receives a complaint, it cannot pursue criminal prosecution. Since the Meridian's construction upgrades and sales started in 2005, the board originally decided the Taddeo case had expired.

But one 2008 document that owners gave to the board might shift the time frame for prosecution. It's a proposed construction contract with Koval-Flamingo to "complete" work in multiple Meridian units, including jobs on water heaters and other utilities. Such jobs typically require a building permit, though none were issued during the Meridian conversion.

The contract has a Dec. 15, 2008, acceptance date and is signed by Bruce Seyburn for Koval Flamingo. The Taddeos filed their complaint in summer 2010, which is less than two years after the contract's date.

Board representatives warned the Taddeos that their unit was not listed on the 2008 document and was already converted by 2006. But owners countered that some Meridian units are still awaiting conversion upgrades, so the construction project as a whole is not over, though it has stalled.

After the meeting, Noto said he is disheartened by the board's lack of initiative last autumn to obtain investigative proof, as well as ongoing suggestions that Meridian owners should seek relief elsewhere, such as in civil court or with the state's attorney general or the Nevada Real Estate Division.

The contractors board "kept trying to diminish their responsibility to go forward" in protecting the public from unlicensed construction, Noto said.

Koval Flamingo's lawyer, Kenneth Morgan of Michigan, declined to comment in detail without seeing the documents that owners gave the board. But Monday he said by telephone that he could not name the general contractor for the Meridian conversion upgrades, because that is a legal question.

According to Morgan, Koval Flamingo's present role at the Meridian is only as the owner of three condo units. He also said that Koval Flamingo hired an entity called Realty Services Inc. to develop the former apartment property into the present 678 condos.

At the Jan. 13 meeting, Meridian owners also turned over to board investigators a 2004 fax to a Chicago bank, in which American Invsco leaders Steven Gouletas and Nicholas Gouletas sign on to be among the five people who will control a checking account for Koval Flamingo, which was just embarking on the Meridian project.

The four Meridian owners also said they argued to board reps that because American Invsco or its affiliates had controlled all Meridian units in a leasing program for two years after the first units were converted, owners were not able to verify that the upgrade work was unlicensed -- as well as faulty, in many instances -- until more than two years later. That, according to owners, also should extend the statute of limitation.

Most owners did not regain control of their condos until summer 2008, after the Meridian's leasing program abruptly went under. Most buyers, right after purchase, had turned their units over to the leasing program, not knowing that Meridian property managers were renting most units short-term, to tourists and conventioneers. The practice turned out to be illegal as the site is not zoned for a hotel or motel.

Contact reporter Joan Whitely at jwhitely@reviewjournal.com or 702-383-0268.