City Center Already Having Issues
The Las Vegas City Center is a point of debate for two major players in the Las Vegas circle. MGM Mirage and Perini Building Co. are disputing payment of almost $500 million from the total construction budget of $8.5 billion for the City Center development. All of this arguing has lead to some serious consequences. In a filing Friday with the Securities and Exchange Commission, the casino operator said the project’s primary contractor intends to file mechanic’s liens to collect on $492 million in construction bills. To support their position, a filing by the MGM Mirage was also introduced. In the filing, MGM Mirage and Dubai World, its 50-50 joint venture partner in City Center, said the amount owed is far less, primarily due to construction defects that halted building of the Harmon Hotel.
One specific point of conflict is the Harmon tower. The Harmon tower was delayed and reduced in size because county officials said reinforcing steel wasn’t spaced at intervals to support it as designed. “While City Center’s investigation into the general contractor’s potential liability regarding the Harmon Hotel is continuing, there can be no assurance at this point as to the ultimate outcome of any action City Center may undertake,” according to a company statement in the SEC filing. MGM Mirage said the amount being claimed against Perini may exceed the amount of City Center’s estimated remaining liability to the general contractor. A message left with Perini Building Co. by The Associated Press on Friday was not immediately returned.
MGM Mirage spokesman Gordon Absher said Friday postconstruction settling disputes are not uncommon. “While $492 million is a significant figure, it is a small fraction when compared to the overall budget for City Center,” Absher said. He added that MGM Mirage wants to try and resolve the matter quickly because small contractors who worked on the project are waiting to be paid. “We’re hoping to have a speedy resolution to this,” he said. Another, although unmentioned, reason the Mirage is eager to have the new hotel opened is that it will produce millions in revenue and help the severely hurting Las Vegas economy. The 67-acre City Center development opened in December.
Tags: City Center, development, finances, Las Vegas
