LAS VEGAS (CN) – A construction company says MGM Mirage Design Group failed to pay $490 million for its work on a high-rise condo at the troubled CityCenter, the nation’s largest-ever privately funded development project. Perini Building Co. says MGM is trying to wriggle out of paying through bogus claims of construction defects.
Perini’s lawsuit in Clark County Court was filed just two days after MGM security closed construction at the Harmon Hotel and escorted Perini’s workers off the site. They even changed the locks, the lawsuit states.
Perini says the 66-acre CityCenter site on the Las Vegas Strip was plagued by delays and cost overruns because of design changes that arrived as many as 520 days late. Perini says such delays caused the budget to balloon from $3.5 billion to $6.8 billion.
The lawsuit cites changes in designs that added 3 million square feet of additional space, “dramatic, unique and extremely costly building geometry, and lavish and one-of-a-kind finishes throughout the project.”
Perini says MGM falsely claimed that Perini is responsible for construction-related defects at the Harmon in an attempt to get out of the contract.
“MGM/CityCenter Land’s claim that Harmon is a total loss has no validity and is a recent fabrication … for the sole purpose of improperly withholding amounts due and owing,” the lawsuit states.
So far, only 26 floors of the Harmon’s planned 48 stories have been built, according to the complaint.
Perini says MGM and CityCenter decided that the hotel would be reduced to 26 stories, “which included the removal of the condominium portion of the Harmon and … would defer the buildout of the hotel portion for one year.”
Perini also says defendants “admitted” that the upper levels of the Harmon project “were being eliminated due to ‘market conditions’ and ‘cash flow considerations,’ rather than any alleged construction defect.”
Also listed as defendants are: Citycenter Land; CityCenter Harmon Hotel Holdings; CityCenter Vdara Development; The Crystals at CityCenter; Citycenter Veer Towers Development; Aria Resort & Casino Holdings; CityCenter Boutique Hotel Holdings; and CityCenter Boutique Residential Development.
Perini wants its money, along with damages and attorney’s fees.
It is represented by George Ogilvie with McDonald Carano Wilson LLP.