One boss means lower costs, Marnell says

Justin M. Bowen

Fireworks are set off right before the official opening to the public Sunday night at the M Resort.

By Liz Benston (contact)

Monday, March 2, 2009 | 2 a.m.

In 2000, a year after his father sold his Rio casino and began planning Steve Wynn’s Wynn Las Vegas and Encore casinos, Anthony Marnell III founded a company that makes planning software for contractors, architects and engineers.

Tririga claims its products reduce the duration and cost of large-scale construction jobs.

But it wasn’t necessarily fancy software that made it possible for Marnell to open his $1 billion resort Sunday under budget and two months ahead of schedule.

(Marnell used the cash saved on the project to build a gas station, rooftop restaurant and wine cellar at the resort. Whether opening the property in March rather than May will yield much more profit in this economy is yet to be seen.)

The process of creating the M Resort — built and designed by the elder Marnell, of Marnell Corrao Associates — was something of a collaborative dictatorship.

His father’s company came up with ideas for the resort and brought him various options — from expensive to more cost-effective — to choose from. Marnell was responsible for making every design and purchase decision at the property.

Every detail of the 390-room property — from carpeting and cutlery down to the wattage of thousands of light bulbs throughout the building — came across his desk. Controlling the decision-making process and the flow of information accelerated what is typically a cumbersome process delegated to various managers, Marnell said.

Having more people involved in decision making can inflate costs as people leave their mark on a project by adding design elements or ordering more materials than are needed, he said. Without controls on the communication process these decisions can take on a life of their own, he said.

To keep his contractors and designers in line, Marnell met with them every weekday morning for more than a year leading up to Sunday’s opening. For the past three months, the group also met on Saturdays and Sundays.

Being gatekeeper on such a big project “was a huge commitment of my time,” he said.

One sign that his approach paid off is the fact that he hasn’t needed to redesign parts of the resort, he said. It turned out, for the most part, as planned.

Sometimes on a big project the finished product doesn’t always look as good as it seemed at first, either on paper or in the mind of the developer, he said. Before opening their doors, some Strip resorts have ripped out millions of dollars’ worth of work because the owners didn’t like what they saw.

“We were cautious,” Marnell said. “We priced out various options.”

As expected, some areas ran over budget. But others came in under budget, keeping costs level, he said.

During the real estate boom in Las Vegas, resorts commonly went over budget — including those still under construction. Some of this was inevitable, especially when labor and materials costs were spiraling upward with demand.

Now that the economy has cooled, these costs are coming down — perhaps not soon enough to benefit developers in the final stretch of construction.

Though some items at the M Resort were purchased recently for less money than anticipated, the project wasn’t able to take advantage of significant price reductions because it was mostly complete by then.

“We haven’t seen the bottom of that, because there’s so much supply and no demand” for materials and labor, Marnell said. That adjustment, he said, could reduce the budgets of future resorts.

Now that Marnell has shown that he can plan a resort, he has the tougher task of selling it to a skeptical public in a recession.