Las Vegas Sun

March 19, 2019

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Adelson: An angel or devil?

As Jason Chudnofsky recalled, Sheldon Adelson was riding in a car in his native Massachusetts when he spotted senior citizens waiting outside their retirement center for a bus.

Adelson rolled down the window, heard an earful about their long wait on the street corner and decided to take action. He bought the retirement center a bus and also paid for the driver.

Chudnofsky, a former Adelson employee who runs the Comdex trade show, said that philanthropic side is just one of many reasons why he believed the owner of the Venetian resort has had the most positive impact on his life.

"If I were running the mile in 5 minutes and 30 seconds, he'd get me to run it in 4 minutes," Chudnofsky said. "I find him tenacious. I find him to be a tough boss, but I also find him to be fair. He dreams big dreams, no question about it. He has the ability to manage with a sense of urgency. He wants things done now."

Henri Lewin also is a former Adelson employee but holds a less flattering view. Lewin, who was fired by Adelson as president of the former Sands hotel-casino in 1990, described his former boss as the type of guy so impressed with himself he kisses the mirror goodbye each morning.

"He's always right," Lewin said. "He does not have a meeting where he is not right. If you want to have a good day, it is no use to argue with him because the next day he's smart enough to change his mind and then it's his idea. He believes he invented the wheel. If God came to Earth, he believed he would have to answer to Sheldon for advice."

All eyes will be on Adelson when he opens his Venetian hotel-casino on the Strip near Sands Avenue on May 3. At a cost of $1.2 billion the resort, inspired by the romantic Italian city of Venice, will open with 3,036 suites. To help make it happen he put up $95 million in cash and $225 million in land.

If he adds 3,000 more suites as planned, he'll wind up with the largest resort in the world. That would make the Venetian as unique as its owner.

Adelson, who refused Sun interview requests for this series, is one of those rare individuals whom people either adore or despise to extremes. His friends and beneficiaries, who refer to him as "Shelly," call him a brilliant entrepreneur and dedicated family man who is warm, witty and generous. His detractors liken him to the devil, an obsessive, ego-driven micromanager who steps on others regardless of the consequences.

"I've been characterized as a lot of different things by a lot of people who don't know me," Adelson told the Latin Chamber of Commerce last fall.

The 65-year-old Adelson, former owner of the defunct Sands, has been arguably the most colorful newsmaker in Southern Nevada in the past few years. Much of that is because he is more outspoken than perhaps any other Strip executive. Brash, dynamic, generous, dictatorial, shrewd, humorous, litigious, charitable, penny-pinching and a few flowery as well as unprintable adjectives have all been used to describe him.

While building the Venetian he has fought the state's largest labor union, taken a major role in local elections and criticized Southern Nevada tourism bureaucrats. But he also has a charitable side that attracts far less media attention.

Even though Adelson has been at odds with the Las Vegas Convention and Visitors Authority for several years over its treatment of him and its own promotional efforts, convention authority spokesman Rob Powers said "we consider him a partner."

"We will do whatever we can as the destination marketer to help him at the Venetian and help him fill his convention space," Powers said. "We don't always see eye to eye on how the destination should be marketed, but he's entitled to his opinion."

But after a heated confrontation with Adelson at an authority meeting on April 13, authority President Manny Cortez told the Sun that the hotel owner couldn't back up his arguments.

"He doesn't understand that we do more than operate a building," Cortez said.

Gut instinct

Often uncompromising in his business dealings, Adelson relies more on gut instinct than market research. He often acts from the seat of his pants, taking risks few others would dare. He has described himself as a "deals junkie," meaning he rarely lets a day go by without working on a business deal.

Forbes magazine ranked him last year as the 327th wealthiest American with a net worth of $600 million, though others report that his fortune is worth nearly $1 billion. And Adelson did it all without earning a college degree.

The founder of Comdex has a reputation for being involved in just about every decision of the businesses he owns, which include computer software companies and charter travel services. He has been known to go on verbal rampages with employees and demand that they answer the telephone by the third ring.

"Everyone thinks I just want them to be yes men," he told the Boston Globe in 1988. "I hate that. Don't stroke me. I don't want to be stroked. I want to hear it the way it is."

The Venetian is his biggest gamble yet, a hotel he hopes will capture both world class high-rollers and convention delegates. One of his goals is to give hotel guests the comforts he believes they crave, such as mini-bars, fax machines and computer hookups, that they are denied at other Las Vegas resorts.

Treadway Industries vice president Bob Hlusak, whose company is duplicating thousands of Venetian statues and other artwork for the hotel, said Adelson has an incredible eye for detail. Adelson can look at duplicated artwork and immediately determine what is missing by looking at a photograph of the original piece.

"He has this sort of laser-like attention," Hlusak said. "There's certain points in the conversation or the meeting where you feel that red laser on your forehead as he's probing for answers. So he's not somebody that you can fool."

UNLV Professor Patti Shock, who chairs the department of tourism and convention administration, is betting that Adelson succeeds with the new hotel because she believes there is demand for suites that cater to convention delegates.

The college faculty made him the first recipient of her department's Industry Leader of the Year award in 1994. Shock fielded criticism from other industry leaders for making Adelson the first recipient, and she credited him with turning Las Vegas into a convention city.

"He can afford to indulge in his fantasies," Shock said. "With the Venetian he's following his gut reaction. If it feels good, he does it. That may be part of his problem (with critics) because he impulsively moves forward."

Big risks

Some competitors and other critics believe Adelson is taking too big a risk with the Venetian. The project is heavily leveraged, including construction loans at rates of 12 percent to 14 percent, much higher than the interest other megaresorts are paying. This has caused mixed reaction on Wall Street. Some fellow gaming executives have also been unimpressed by Adelson's rants about other Strip resorts.

"How much money has Sheldon made in Las Vegas?" Circus Circus President Glenn Schaeffer told the Sun last year. "The majority of the money made in the history of Las Vegas has been made by Circus and Mirage."

But Mirage Resorts Chairman Steve Wynn, who has a closer relationship with Adelson after the gaming competitors got off to a rocky start years ago, described the Venetian boss as an "exciting, eccentric, opinionated, strong-willed man."

"He tends to have a combative personality," Wynn told the Sun last year. "That's one of the reasons why he's so successful. He loves to be fighting against all odds to prove himself. It's not an uncommon trait among great leaders."

Adelson told the Wall Street Journal in 1997 that his critics were "running scared."

"They don't want to see an outsider come to Las Vegas and succeed," he said.

Failure a possibility

Should the Venetian fail, Adelson would still be an extremely wealthy man because much of the financial burden would fall on the holders of the construction bonds.

But he won't concede the possibility of failure, arguing that what the Venetian represents is the Las Vegas of tomorrow. He's already planning to invest about $180 million more of his own money for the hotel's second phase. He has said his total contribution, about $500 million, is the most any individual has ever put into Las Vegas.

Gaming analyst David Wolfe of CIBC Oppenheimer & Co. in New York rode the elevator up the Stratosphere tower with Adelson on its opening night and found him to be delightful company.

"There are people who are skeptical of him producing a successful $1.2 billion project, but anyone who can assemble the wealth he has has to have a good idea of what he's doing," Wolfe said. "Would I like to see him with a stronger capital situation? Yes, but that's not the case."

Fellow gaming analyst Jason Ader of Bear Stearns & Co. in New York, which helped with the Venetian's financing, views Adelson as a strong-willed, "old school" entrepreneur who is only in business to make money. Ader said Adelson is a stickler for costs, the type of guy who counts paper clips and has virtually no fat in his operation.

The Wall Street Journal reported on Adelson's penchant for bargains by noting that he sent an associate to Belgium to buy curtain tassels for $15 apiece rather than spend the domestic rate of $175 each.

"He's a guy that really watches the expense line so closely," Ader said. "I came away from the Venetian tour thinking that people have underestimated what it will be like. When the odds are against him, he always figures out a way to come out on top. He's the guy you'd want to manage your money."

Though fired by Adelson at the Sands, Lewin agreed that his former boss is a sharp businessman whose creation of Comdex was "a magnificent achievement." But Lewin said he and Adelson disagreed on how to improve the Sands. He argued that Adelson already would have been a major player on the Strip had he listened to him.

"To now build a hotel with 3,000 rooms in a city that is overbuilt, he must know something I don't know," Lewin said. "In 1989 when he bought the Sands hotel, he bought a property with an unbelievable location. I told him that he could not compete with Steve Wynn unless he built, too. He didn't build and that's something I didn't agree with."

Even so, Lewin believes Adelson has a chance to succeed by going after convention delegates as long as he also has a top-notch management team to run the hotel.

"He knew the Sands, the way he bought it, outlived its purpose and he closed it, so you can't say he didn't learn from it," Lewin said. "He won't give up. Some people, when they wake up in the morning they want peace. When he gets up in the morning he wants a challenge."

Chudnofsky, who ran Comdex for Adelson at the Interface Group in Needham, Mass., and then retained his position when the show was sold to Softbank Corp. in 1995, said his former boss possesses an IQ that exceeds 140 and can still type 90 words a minutes from his days as a court stenographer.

"His intelligence is very, very strong," Chudnofsky said. "It's hard to knock a billionaire totally. It's not all luck."

Lark Ellen Gould, who was fired by Adelson from her job writing trade show newsletters for Interface in the late 1980s, described him as a tough boss who demanded "110 percent" from his employees and required workers who showed up late to sign in.

"He seemed to be in a permanent bad mood," Gould said. "He was a no-nonsense boss and kept himself isolated from employees."

Mellowing out

But Gould, a former Sun feature writer who now writes for Travel Agent magazine in Los Angeles, said Adelson was generous in the salaries he paid employees and has "mellowed" since his marriage to wife Miriam in 1991.

"He's very open and he's become a person I'd like to know as a friend," Gould said. "He and his wife are very much in love. These are the best years of his life. He's become the man he's always wanted to be. I wouldn't mind being one of his employees now."

Though the Venetian is being built by union labor, Adelson has been engaged in a war with Culinary Union Local 226, which represents employees such as food preparers, cocktail waitresses and housekeepers.

"My Venetian resort is proudly being constructed with 100 percent union labor, with over 3,000 men and women working on the job today," Adelson wrote last year in a letter to Las Vegans. "While I am creating 12,000 new jobs and $185 million a year in taxes, the Culinary bosses use their political puppets to try to put roadblocks in front of my Venetian project."

Employees of his Sands Expo & Convention Center, a separate business entity, are represented by the Culinary Union. But Adelson refuses to open his resort with a Culinary contract, agreeing instead to allow the union only if Venetian employees vote for Local 226 representation in a secret-ballot election.

"The unions are pressuring the politicians to take away the rights of my employees to decide for themselves," Adelson said at a Women in Communications luncheon in January.

Adelson is confident his employees won't need the union because he is promising better benefits. His package includes free membership in the resort's health club, on-site day care, flex time off when needed, paid sick days, a 150 percent-matching pension plan up to a cap, and an employee concierge service that will be able to run errands for workers. All that and employees would save $390 a year in union dues.

Adelson, who is Jewish, also said he would establish an employee peer review board at his hotel to prevent such occurrences as discrimination between workers.

"The Venetian will be the most pro-employee employer in Las Vegas," Adelson told the Latin Chamber last fall at the Gold Coast hotel-casino. "I will not allow any one employee to be persecuted by someone who doesn't like them, so let's have peer review. I've suffered enough discrimination in my life. I don't want anyone to suffer because he's a Jew or Hispanic or Asian."

Chudnofsky said Adelson understands blue-collar workers quite well as the son of a taxicab driver. The hotel owner, he said, generously rewards employees who are productive.

"He just doesn't want to be told how to run his business," Chudnofsky said.

But Tom Snyder, Culinary's organizer for the Venetian, scoffed at Adelson's promise of better benefits for his employees. He noted, for instance, that the employment application for the hotel includes the provision that the worker may be terminated at will, and that wages, benefits and working conditions are subject to change.

Debates over pay

Snyder also noted that, if the hotel's restaurants are independently owned and operated, the food preparers could be paid at around minimum wage and also won't have the benefits afforded Culinary workers.

"When he talks about the best pay on the Strip, he's not talking about the restaurant workers who will make $5.50 an hour with no health benefits," Snyder said.

Snyder added that Adelson had to use union labor to build the Venetian. All other Strip hotels have been built with union labor because they are considered the highest skilled workers available, Snyder said.

Marc Furman, senior administrative assistant of the state Carpenters Union, said the union workers building the Venetian were hired by the contractors, not by Adelson. They are operating under a project labor agreement that prevents them from committing a work stoppage.

The irony is that the carpenters and other trade unions have been involved in litigation with the former Sands hotel. The 9th U.S. Circuit Court of Appeals in San Francisco ruled earlier this month that the hotel violated federal labor laws by breaking negotiators' promises to sign contracts with the unions shortly before the Sands was closed in 1996.

A Sands attorney has said the effect of the ruling is not clear since that hotel no longer exists.

Furman's take on Adelson is that the hotel owner has a "king of the hill" mentality and doesn't like unions because he wants total control over the reward and punishment of his employees.

"He sees the union as worth fighting," Furman said.

As for Adelson's insistence on a secret-ballot election to consider Culinary representation, Snyder scoffed at that, too. Snyder noted that the Santa Fe hotel-casino used stall tactics for five years after Culinary won the election at that property.

"A secret ballot election would give him the opportunity to intimidate and delay when he can use his resources to hold up the results for years," Snyder said. "Adelson would do that."

Former Sands employees Terry Greenwald and Linda Constable added that Adelson has shown he doesn't keep promises to workers. Greenwald, who was the Sands' senior bartender with 21 years on the job when Adelson closed that hotel in 1996, had a job interview for the Venetian late last year.

Greenwald said he was promised a second interview for Feb. 11. But he said that after he was named president of Bartender's & Beverage Local 165 on Feb. 9, the Venetian canceled the interview.

Constable, who like Greenwald is 51, was a Sands cocktail waitress for 15 years and was even an employee of the month with her picture on a Sands billboard. But Constable said she didn't even get a second interview with the Venetian. She believes it has to do with her age, given that the Venetian has contacted modeling and talent agencies for cocktail servers and bartenders.

"They're looking for young, pretty people and people with no union background," Greenwald added. "They don't care about older people. Adelson just wants to throw them out on the street."

Both said they continued to work at the Sands after Adelson took over the hotel in 1989 because he kept promising that he would make improvements there. But when he closed the hotel eight years later, they said many employees who lost their jobs suffered other hardships as a result, including divorces and health problems.

"I don't believe anything he says," Constable said. "He lied to us over and over. He's just not a nice man."

Snyder is confident that the Culinary Union will eventually represent Venetian workers because he said the hotel's heavily leveraged debts will put enormous pressure on Adelson to cut a deal with the union. Otherwise, the Culinary vows to maintain a prolonged picket in front of the hotel, which could keep customers away from the resort.

Adelson's resort filed a federal lawsuit earlier this year to keep the sidewalks private so that pickets could not legally be there. He and the Culinary Union also have been embroiled in litigation over the Sands closing. These are some of the numerous lawsuits that have involved Adelson, either as a plaintiff or defendant, since the 1960s.

Involvement questioned

Adelson was questioned about his involvement in lawsuits when he appeared before the state Gaming Control Board in 1989 to obtain his gaming license for the Sands. He explained that he was sued repeatedly for nonpayment of household and other personal bills after suffering a financial setback in 1969 as the result of a stock market slump. He also settled some lawsuits out of court involving a bar owned by one of his brothers.

But Adelson also told the board he refused to take the easy way out and file bankruptcy as others stung by the stock market had done.

"It was a lot easier to just go into bankruptcy and eliminate all the bills than it was to stick with it and eventually come back and pay them all," Adelson told the board. "And that's exactly what I did."

Later he added, "I think more productive time can be spent than a businessman being involved in litigation."

But Alan LeWinter, who owns the Rosewood Grille restaurant next to the Venetian, cited Adelson's penchant for litigation and his "long-running campaign of harassment against us" as reasons why he felt he had limited freedom to share his opinion of the hotel owner.

Adelson and LeWinter have been wrangling for years, ever since the restaurateur refused to sell his property to his powerful neighbor. They continue to fight over a plan by the Venetian to extend a pedestrian bridge across the street to the Treasure Island/Mirage resorts.

LeWinter contends the bridge would divert potential customers away from his business. He declined to be interviewed but he faxed a letter to the Sun to summarize his thoughts about Adelson.

"Knowing your interest in presenting varied views and balanced reporting, this means you must have found someone to say something nice about him," LeWinter wrote. "Say 'hi' to his mom for me."

As one who speaks highly of Adelson, Chudnofsky said Las Vegas has turned his former boss from a puppy dog into a bulldog because of his battles with the local establishment. Adelson has referred to himself as an outsider, even though he has been on the Strip longer than many current gaming executives.

But Chudnofsky added that Las Vegas is Adelson's type of town because it is an ideal place for entrepreneurs. That's why he believes the hotel owner is here to stay.

"He used to watch me play racquetball, and he'd say, 'Jason, do you know how much money you are losing?' " Chudnofsky said. "He's going to work until the day he dies."

MONDAY: Part 2 of the series examines Adelson's rags-to-riches story.