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Rod Smith

Asbestos-Removal Challenges May Hamper Hotel Projects

9 February 2004

Workers on Friday completed asbestos removal and demolition of the Vagabond Inn and Tam O'Shanter Motel on the Strip and Sands Avenue, Las Vegas Sands officials said.

The asbestos-removal project, which took 19 days to complete and cost between $500,000 and $1 million, was the first step in the site preparation for the Sands' new $1 billion, 3,000-room resort, now called The Venetian Phase II, at the corner of the Strip and Sands Avenue.

But the work at the defunct Strip properties is only one example of the widespread asbestos contamination in downtown Las Vegas and along the Strip, and how it has to be addressed by developers.

Sources said recently that asbestos materials lacing Binion's Horseshoe could further delay its sale and reopening and also slow and add major expenses to any renovation or redevelopment.

Indeed, environmental consultants say many of the older Las Vegas hotel-casinos are riddled with asbestos. Just last year, operators filed 32 notices of abatement programs with the Clark Country Department of Air Quality Management.

Plans for repositioning less profitable hotel-casinos such as the Horseshoe may be stalled not only by the cost of redevelopment, but by the challenges and costs of complying with environmental and other regulations illustrated by the demands of asbestos controls.

Larger, more profitable operators such as Sands Las Vegas, however, are neither slowed nor challenged by the rigid regulations involved.

Among other major operators, for example, Caesars Entertainment filed the most abatement notices with the county in 2003, and they illustrate the range of successful projects tangled in asbestos-removal regulations.

Bally's, for example, filed an asbestos abatement notice to repair a small ceiling area of a single guest room, a company spokesman said.

The Las Vegas Hilton also filed two notices for work to "encapsulate," rather than remove asbestos material chipping off in the showroom area.

And three notices were filed for Caesars Palace for work involved in the renovation of its entire casino area.

However, the large Strip resort was already 98 percent asbestos-free and the company explained notices have to be filed whenever any work may involve disturbing asbestos.

Gary Miller, compliance supervisor for air quality management with Clark County, said whenever an older property is being renovated, the owner is required to hire a company that can provide oversight and testing to measure compliance with regulations and air quality, and contract with another company to remove asbestos.

Lori Headrick, Las Vegas branch manager for Forensic Analytical, a mold, lead and asbestos consulting company, said when asbestos needs to be moved or loose asbestos is detected, the consultants assure full compliance with strict federal and state environmental regulations.

The consulting firm or the owner then is required to file notices with the state that asbestos has been found and a program is being implemented to remediate the site and usually remove the material, she said.

Following a required identification program that determines areas with asbestos, a qualified contracting company typically is hired to remove asbestos from properties and move it to approved dump sites for the owners, Headrick said.

"If (the owner is) not going for remodeling, but just holding or buying the property as is, they don't have to remove it," she said. "They just have to make sure none is airborne."

Kurt Goebel, vice president of Converse Consultants' environmental division, added that when buildings are being renovated, asbestos only needs to be removed from areas being remodeled, not from the whole building.

However, he said the asbestos must be dealt with before any renovation or demolition can start.

He said the time it takes to address asbestos situations depends on the age of the buildings involved, since older buildings used more asbestos.

It also depends on whether the building can be cleared of asbestos all at once, or whether the work has to be done stages, Goebel said.

Still, Headrick warned that many owners with older buildings are avoiding dealing with asbestos.

All it will take is one workers' compensation claim, and the number of claims and cost of cleanup will increase exponentially, she predicted.

At the Las Vegas Sands, Executive Vice President Brad Stone said in a recent conference call with Wall Street analysts that his company is proceeding as quickly as possible with site preparation so it can launch the new resort when plans are completed.

"We want to make sure that when we're ready to pull the trigger, so to speak, on Phase II, that we don't have certain obstacles in the way, and certainly get a jump on it by demo'ing those properties currently," he said.

Company officials agreed that no complications have arisen with the asbestos removal and demolition of the two hotels, and that excavation can begin shortly.

"You just clean the rooms, scrape down the walls and remove (the asbestos) to a special dump," said Stu Mason, vice president of development at The Venetian. "It's pretty elementary stuff. In boiler plants, it's much more complicated, but our buildings in Las Vegas are not difficult at all."

Asbestos, used for most of the 20th century as a fire retardant and soundproofing agent, is commonly found in the insulation, ceiling tiles and exterior stucco of buildings built before the early 1980s.

Nevertheless, it has conjured up images of environmental disaster and costly containment programs since the late 1970s when it was determined to be a hazardous substance and its manufacture was banned.

Consultants and public officials, however, agree the cleanup campaigns today are simple, cost-efficient and easy to manage if regulations are followed.