Contractor and MGM Mirage Dispute Costs of Non-Casino Hotel

Author: Chris  //  Category: Las Vegas Casinos

The 67 acre CityCenter project on the Las Vegas Strip was hailed as one of the saving graces of a dismal 2009. It opened in December just in time to be celebrated along with the Christmas Holidays and a Rocking New Year’s Eve party. It brought some visitors back to the casino town. MGM Mirage is claiming it to be the crown jewel of the Strip. It was not without controversy, though. Last spring there was a lawsuit filed against MGM Mirage by its 50-50 joint partner in the CityCenter project, Dubai World. Even though the legal matters seem to come out of the blue, all the issues were resolved, and everyone made up.

Now it seems that there may be some post construction matter for casino and casino resort company to deal with. According to a filing with the Securities and Exchange Commission, Perini Building Company and MGM Mirage are disputing close to $500 million of the $8.5 billion total construction budget. Perini Building plans to ask for mechanic’s liens so that they may collect on $492 million in construction bills. Of course MGM Mirage and their partner, Dubai World, are disputing this claim. The feel the actual number is much smaller.

MGM Mirage feels Perini Building’s figure should be reduced due to some construction defects to one of CityCenter’s non-casino buildings, the Harmon Hotel. During construction Clark County officials found that reenforcing steel was not spaced at popper intervals that would allow it to support the original construction designs. This forced delays in the completion of the Harmon Hotel and caused a reduction in the size of the building.

For the time being MGM Mirage is following through on the proper legal procedure, and do not seem to be overly worried. A spokesperson for the casino empire stated that post-construction settling disputes are not that uncommon. All parties are hoping for a speedy resolution as subcontractors are waiting to be paid.

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