Casino contractors plead case to panel

Erin Neff

Thursday, March 15, 2001 | 11:35 a.m.

CARSON CITY -- Contractors told a Senate panel this morning they are still reeling from millions of dollars of unpaid work they conducted at big casinos because they felt they were unable to leave the at-risk construction projects.

The highly publicized construction at the Venetian hotel-casino, the bankruptcy of the Regent and the financially strapped Aladdin hotel-casino have left dozens of small contractors struggling to keep their businesses afloat.

As a result, the Associated General Contractors has sponsored a bill to allow contractors to walk away from a project if they aren't paid.

Although that provision technically exists in state law, Steve Holloway of the contractors group told the Senate Commerce and Labor Committee that casino operators often institute huge penalties and fines if a contractor leaves.

"The owners are contracting around that," Holloway said.

Senate Bill 274 would allow contractors or subcontractors to stop work provided they give written notice and their payment is at least 10 days late. The bill would allow the contractor to recoup costs for materials, labor, attorneys fees, interest and expected profits from the project.

"It's the norm now," said Robert Thorniley, president of Image Construction in Las Vegas. "I know every job I do I am going to have a hard time getting my money."

Thorniley's small company is owed $3 million from four different projects completed within the past year.

Richard Peel, a construction attorney whose caseload has flourished as a result of the payment problems, represents contractors owed $35 million from the Venetian, $5 million from the Regent and $20 million from Aladdin.

"This is a huge, substantial burden on contractors and subcontractors," Peel said. "It is forcing the mom-and-pop shops of Nevada ... from being able to stay in business."

Renny Ashleman, a lobbyist representing the Southern Nevada Home Builders Association, said he doesn't believe the problem is as pervasive as the testimony suggested.

"I don't believe it's true that all projects, or almost all projects, have this problem."

The Nevada Transportation Department and the National Association of Counties asked for exemptions to the bill related to public-works projects.

A subcommittee will convene next week to work on the bill. Both Holloway and Ashleman said they were confident a compromise could be reached.