LVCVA backs off Venetian suit threat

Thursday, Jan. 27, 2000 | 11:17 a.m.

Travel agent magazine

Manny Cortez, president of the Las Vegas Convention and Visitors Authority, and Mike Conway, chief executive officer of National Airlines, have been honored by Travel Agent magazine.

Editors and reporters of the 70-year-old trade publication nominated leaders in the travel industry who initiated innovative strategies and service in their communities for its annual recognition edition. The People of the Year designations are made in 12 categories.

Cortez, who was cited for his leadership in drawing more than 33 million visitors to Las Vegas in 1999, was named U.S. Person of the Year in the "Destinations" category.

Conway, head of the Las Vegas-based company, was among four airline executives recognized in the "Airlines" category.

Travel Agent also cited the chairman of Las Vegas-based Lowestfare.com, Carl Icahn, for his work as a tour operator and Sol Kerzner, chairman and chief executive officer of Sun International, as Gaming Person of the Year. Sun International is acquiring the Desert Inn hotel-casino in Las Vegas in a deal expected to close later this year.

The Las Vegas Convention and Visitors Authority is pressing ahead with plans to expand its convention center, but slowing efforts to sue the Venetian hotel-casino.

LVCVA President Manny Cortez said at a Las Vegas Sun editorial board meeting Wednesday that the burden of proof is greater on a government entity than it is on a private business in determining if it can recover damages for construction delays it blames on Venetian executives.

The LVCVA board of directors voted in November to give Cortez permission to explore filing a suit to recover damages for delaying the $150 million, 1.3-million-square-foot South Hall expansion project.

"I'm not sure that we're ever going to meet the test," Cortez said. "It's a difficult burden on a government entity and we agreed to take a long, hard look at it. We're the guardians of that public money and we're obligated to do that."

Venetian officials had no immediate comment today.

Financial experts told the LVCVA board that the increased expense of the bonds with higher interest rates to finance the project would increase the cost by $10 million. Labor and construction material costs also have increased and the LVCVA has not calculated how much revenue would be lost from the building with a 10-month delay.

Cortez did not disclose at what point it would be worth the agency's effort to file a suit.

"Our focus is now on the expansion," Cortez said.

Cortez said a "surprising number of subs (subcontractors) and generals (general contractors)" have picked up plans on the expansion project and apparently are preparing bids.

He said under the current schedule, bids would be opened at the end of February and the project would be awarded at the board's March meeting. Ground is expected to be broken in April and a fourth quarter 2001 completion date is planned.

Cortez said the construction contract would be laden with incentives to ensure that the building would be completed on schedule. He did not say how much extra the building would cost with the incentive clauses in the contract.

Officials organizing the Consumer Electronics Show in January 2002 say they are counting on the new building being completed so that they'll only have to spend one year setting up part of the show in tent facilities in convention center parking lots. CES officials did not sign a long-term contract with the Sands Expo Center and said the 2000 show was the last one to have been partially housed at the Sands.

The Sands Expo Center is owned by the same company that operates the Venetian hotel-casino, which contends that the LVCVA has an unfair competitive advantage in signing conventions because it is funded by tax dollars. That issue is at the root of the company's lawsuits against the LVCVA.

The Venetian's parent company, Las Vegas Sands Inc., unsuccessfully challenged the sale of revenue bonds to finance the expansion in District Court last summer. Venetian officials contended general obligation bonds requiring a public vote were what the LVCVA was actually using.

The Venetian later filed a District Court suit over the LVCVA negotiating the sale of those bonds to the successful bidder instead of putting it out to a new competitive bid.

The company also filed a U.S. District Court suit against Cortez accusing him of violating the company's freedom of speech. The company said the vote authorizing Cortez to file suit against the Venetian produces a chilling effect on any business wanting to criticize the LVCVA's actions.

Cortez said LVCVA officials have been told other suits are being considered by the Venetian that could hinder construction of the expansion.

"We haven't seen them, but we have heard rumors that there are suits coming on traffic and parking issues," Cortez said. "The county also has been served with a 60-day notice of a group's intent to file suit for a violation of the federal Clean Air Act. We can't lay that at his (Venetian chief executive Sheldon Adelson) feet, but it's got his fingerprints all over it."

Cortez was referring to a Nov. 8 letter the LVCVA received from the Nevada Environmental Coalition stating that Clark County is in violation of the Clean Air Act because it has no implementation plan in place. The letter, from the Washington law firm of Patton Boggs, said the coalition may try to block the LVCVA's expansion project construction in the course of legal proceedings.

The Patton Boggs law firm previously has been retained by Adelson. Representatives of the Nevada Environmental Coalition have not said if the organization has a relationship with the Venetian.

A 60-day notice is required before a suit can be filed under the Clean Air Act.

Cortez said the notification has mobilized officials concerned about several construction projects in Southern Nevada.