By STEVE FRIESS

he third-wealthiest American is days away from the official mid-January debut of the world's largest hotel, in the middle of a national economic downturn starting to dent even the stalwart resort destination that is Las Vegas. And yet, as Sheldon Adelson walks around his expansive office looking at a wall of framed magazine covers featuring his likeness and another sporting pictures of himself and his wife with various world leaders, he is unconcerned.

It's his competitors on the Strip who ought to worry, says the 74-year-old CEO and majority shareholder of Las Vegas Sands Corp. "We are not afraid of competition. This building is going to take customers from other hotels."

Those are brash, provocative words in this town full of ambition and confidence. But you would need plenty of both to see through the construction of the new $1.9 billion Palazzo Las Vegas. Attached to the existing 4,000-suite Venetian Las Vegas and the 1.2-million-square-foot Sands Expo and Convention Center, the 3,000-suite structure makes the combined 19-million- square-foot edifice the largest contiguous complex with the most hotel rooms in the world.

It's a staggering effort from a man known for staggering efforts. The Palazzo is the taller, blonder, thinner, slightly more elegant sister to the Venetian, but it was always a planned part of the family, as far back as 1996 when Las Vegas Sands decided to implode the old Rat Pack haunt the Sands and erect a luxury hotel focused on convention business. With 60 acres of prime real estate and the largest privately owned convention center in North America, Adelson foresaw the brilliance of offering amenities like comfortable rooms, top-shelf dining and shopping, great entertainment and a thrilling casino--all under one roof--to thousands of conventioneers.

"It was always master-planned this way," says Robert Goldstein, president of the Venetian and Palazzo. "Mr. Adelson's vision was always to connect two
large-scale hotels to the exhibition center to form one large campus. It's the culmination of a 12-year vision."

Others were skeptical--a 1997 Wall Street Journal feature was particularly critical of Adelson's expectations--and some rivals predicted doom for a man who had never before been involved in the gaming business. But the Venetian was a smash--Adelson says it's the most successful resort in the world--which helped turn Vegas into the nation's top convention city, to go along with its title as entertainment capital of the world. Adelson notes that the sizeable casinos of the Venetian and Palazzo are a mere one percent of the hotels' total square footage.

"Instead of building a casino-centric property, we've become a resort-centric, entertainment-centric, dining-centric company," says LVS president William Weidner. Today, no self-respecting Vegas resort is without at least 100,000 square feet of convention space. . .

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