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$1.2 million suit says SLOC breached engraving contract

A foundering fund-raiser is coming back to bite Salt Lake Organizing Committee officials in the form of a $1.2 million lawsuit.

The civil lawsuit, amended and filed late last month in 2nd District Court, alleges that SLOC breached a contract with the company it hired to engrave bricks for the yet-to-be-built Olympic Legacy Plaza at the Gateway complex.

Originally, SLOC had intended to sell, for $50 each, sandstone bricks engraved with the purchaser's name. The sandstone bricks, to pave the plaza floor, were donated free to SLOC and seemed to present a can't-lose cash cow.

Later, however, SLOC discovered the bricks were erodible. It opted to use a harder stone instead, which incurred additional purchasing costs and made the program less profitable. It also led SLOC to cancel a deal it had arranged with a local engraving company.

Last June, after receiving bids from local and national businesses, SLOC awarded the engraving job to Randy Kelso, owner of MBM Architectural Moldings and Monument Signs in Ogden. Kelso, whose company produced the stone dinosaur facade on the Natural History Museum at Thanksgiving Point, constructed a water jet machine to do the engraving.

The machine cost more than $200,000, and Kelso began turning down other clients in anticipation of the new workload.

"My hopes were very high," he said. "I had my whole world on the line and I was dealing with what I thought was the most responsible company in the world."

Last summer, Olympic organizers had similarly high hopes for the "Olympic Legacy Brick Program." They said if Salt Lake could match Atlanta's brick-selling total SLOC would gain $10 million.

Almost a year later Kelso has yet to engrave a brick. His lawsuit claims SLOC breached its contract, leaving his business deep in the red.

Since opening in 1995 the business's gross income had doubled yearly and was around $600,000 in 1999. Kelso, 54, runs the company along with his son Dustin, 19, who is battling testicular cancer. When he was awarded the contract he hired four additional workers for the small, family-owned operation.

Those workers, while paid, have been idle, and Kelso hasn't been able to regain his clientele base that he had before he began referring customers to other companies.

Signs outside his business now read "For Sale" and he expects to close his doors April 16.

The lawsuit seeks $1.2 million to compensate for business losses, employment costs and the unusual machine Kelso constructed.

SLOC has filed an answer to the suit and denies it had a standing contract with Kelso despite mailing him a letter of intent confirming that his company was awarded the engraving bid.

Justin Toth, assistant general counsel for SLOC, said organizers were caught off guard when they discovered the sandstone bricks were highly erodible and couldn't be used for the project. SLOC attorneys also said the deal they had with Kelso was contingent on sandstone being used for the project.

After learning sandstone couldn't be used, Toth said SLOC attempted to renegotiate the financial agreement they had offered Kelso, but he refused. SLOC officials would not say how many bricks they had sold.