Charges still flying between Venetian, Bovis

Gary Thompson

Friday, Aug. 6, 1999 | 11:34 a.m.

Lehrer McGovern Bovis Inc. reacted angrily today to the Venetian's claim it has made payments due to Bovis and other subcontractors working on the $1.5 billion resort.

"Mr. Weidner's comments Wednesday are absurd because all payments to Bovis and the subcontractors were made directly by the owner (Sheldon Adelson) and didn't pass through our hands," Bovis spokesman Sam Singer said.

Bovis and the Venetian are engaged in a legal fight over construction delays at the Strip resort and claims that Bovis and its subcontractors are owed money for their work.

Venetian President William Weidner issued a statement Wednesday saying the Venetian has "made all its payments ... in a timely fashion right up through July 12. We believe it is unconscionable that some of Bovis' subcontractors may not have been paid by Bovis since May."

But Bovis said today the Venetian "is issuing unsupported press releases about Lehrer McGovern Bovis to divert attention from the fact that the Venetian hasn't paid many contractors on the project, possibly due to their own financial difficulties."

"That's completely untrue," Venetian General Counsel David Friedman responded. "We signed a guaranteed-maximum-price contract with Bovis to deliver the project for a certain amount.

"We also paid Bovis' parent, Peninsular & Orient Steam Navigation Co., $6 million as an additional fee to guarantee that price. For Bovis to now claim there is some other obligation outside that agreement defies logic. Bovis knew, and the contract says, anything over the guarantee price is completely and totally their responsibility."

But Singer said Bovis, which filed $145 million of liens against the Venetian earlier this week, had informed Adelson that design and schedule changes would result in cost overruns that Venetian officials approved.

"Bovis has issued all requisitions for payments to the Venetian and the Venetian has failed to cut checks both to Bovis and the trades. In certain instances, Bovis has actually advanced money to the trades to keep them working when Mr. Adelson wouldn't do so," Singer said.

Friedman and Singer confirmed that trade-contractor invoices had to be approved by a Bovis official, a third-party mortgage guarantor assigned by Goldman Sachs & Co. and Venetian executive Bradley Stone.

"The Venetian and its lender have then cut the checks both directly to trade contractors and to us," Bovis President Peter Marchetto said in a statement. "This is required by the contract that the Venetian required of our company."

"What Bovis is intentionally forgetting to point out is we only pay what they present for payment," Friedman said. "We can't pay for things they haven't presented for payment."

"My concern is we may have paid Bovis money that may have been more properly paid to subcontractors. It was Bovis' responsibility to make sure the money we paid them wound up in the right place."

Friedman also said Bovis hasn't submitted invoices supporting the $145 million in claims "to us or the bank."

"When we received notice that they had filed the liens, we were completely incredulous and couldn't even begin to imagine what claims they could be talking about," Friedman said.