Editorial: Settle Venetian bickering

Friday, Aug. 6, 1999 | 9:52 a.m.

We do not know who is at fault in the litigious feud between the Venetian resort and construction manager Lehrer McGovern Bovis Inc. The courts will have to decide whether Bovis and subcontractors have a right to collect more than $210 million in claims against the new Strip hotel-casino. The resort, in turn, wants the contractor held liable for construction delays.

We do know that a prolonged battle between a Strip resort and its prime contractor will not be viewed favorably by Wall Street investors. They wield considerable influence over the gaming industry in general and Las Vegas megaresorts in particular. One bad project may dissuade financiers from participating in future Las Vegas investment opportunities. That is why we urge both sides to reach a swift and amicable settlement.

A lengthy battle between a resort owner and a contractor also can create bad public relations for the Strip. Las Vegas had to endure plenty of negative press during the Culinary Union's six-year strike against the former owners of the Frontier hotel-casino. In fact, the Wall Street Journal and the London-based trade paper Construction News have already published negative stories recently about the Venetian's troubles.

A prolonged dispute also has the potential to spill over into the Las Vegas community. Subcontractors, many of whom are small businessmen, potentially have the most to lose. If they do not get paid the money they believe is owed them, many may end up going out of business. The survivors, desperate to replace lost income, could turn around and raise their prices for other jobs. That could end up raising the price of some new homes or local government projects funded by taxpayers.

Unfortunately civil litigation often moves at a snail's pace. Without a swift out-of-court settlement, this feud can only get uglier. The prospects for a quick resolution do not look good, however. Sheldon Adelson, the Venetian's owner, did not become a billionaire by ducking fights. He has been known to dig in and hold his ground. Bovis is no pushover either. The New York-based company's international reputation is at stake.

It is hoped that this Strip resort and its prime contractor stick to what they are good at and stay out of court. Otherwise the only winners will be the attorneys.