Opening statements aired over construction of PH Towers Westgate

When construction began in early 2007 on the PH Towers Westgate as the world's largest time-share building, it followed the fast track that was popular during the boom days on the Strip.

Bids were added up, and crews went to work, after only 60 percent of the drawings were complete, with many of the details filled in along the way.

The trial to sort out the aftermath began Monday in front of Clark County District Judge Elizabeth Gonzalez, as general contractor Tutor-Saliba Corp. and developer Westgate Resorts traded claims in opening statements over what went wrong.

The nonjury trial is expected to run at least four weeks.

Tutor-Saliba, part of contracting giant Tutor Perini Corp., claims it is owed $11.1 million in unpaid bills, an amount cut by just more than half last week when subcontractor Conti Electric Inc. settled out of the case.

Westgate, on the other hand, has set the amount at just $46,000 after deducting what it contends are several instances of padding the bill.

And Westgate has countered with a request for nearly $30 million, including $10.5 million in contract penalties for finishing the 52-story, 1,201-unit glass-skinned tower more than three months late. But Tutor-Saliba pinned blame for the tardy opening, in mid-December 2009 instead of the Aug. 21 date spelled out in the contract, on thousands of change orders issued by Westgate that slowed work for months.

The trial comes against the unusual backdrop of the PH Towers Westgate and its financial problems having played a major role in the recently released documentary movie "Queen of Versailles."

In reality-TV style, it portrayed the opulent lifestyle of Westgate chairman and CEO David Siegel and his family as they set about building a 90,000-square-foot mansion called Versailles in the Orlando, Fla., suburb of Windmere. The filming then follows them as the economy sinks into recession, threatening the Westgate's viability as the world's largest privately owned time-share company.

The PH Towers Westgate, the worst of the problems facing the company as depicted in the movie, was sold in November under pressure by lenders after Siegel had strongly resisted it. It has since been reflagged as Hilton Grand Vacations.

Versailles sits unfinished, listed for $65 million, including 13 bedrooms, 21 baths, a 20-car garage, 10 kitchens and two movie theaters.

The economic meltdown and the impact on Westgate "is the reason we are here," said Tutor-Saliba attorney George Ogilvie III, and not the construction failings.

"Westgate ran out of money and had to find ways to stop the bleeding, find a way to manufacture counterclaims so it could reduce the cost of this project," he said.

But Westgate attorney Robert Schumacher brushed off any connection to the recession and instead contended that Tutor-Saliba had violated several sections of the construction contract when submitting bills.

In several instances, he said, Tutor-Saliba had charged Westgate for defective work. The attitude was, Schumacher said, "We (Tutor-Saliba) don't pay for our mistakes, you do."

Contact reporter Tim O'Reiley at
toreiley@reviewjournal.com or 702-387-5290.