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MGM Mirage Aims to Settle Claims for Work on CityCenter;
Schedules Meeting Open to All Subcontractors Who Worked on Project

By Howard Stutz, Las Vegas Review-JournalMcClatchy-Tribune Regional News

May 26, 2010--Subcontractors caught in the middle of the legal skirmish between MGM Mirage and Perini Building Co. have been invited to a mass meeting with the casino operator to discuss how the companies can settle some $390 million in disputed claims over work on CityCenter.

The meeting will take place at 10 a.m. on June 9 in the Bristlecone Ballroom inside the Aria convention center.

MGM Mirage spokesman Alan Feldman said Tuesday the meeting is open to all subcontractors who worked on the $8.5 billion Strip development, which opened in December. He said it was unclear how many subcontractors are owed money for their work on CityCenter.

Perini officials said there are some 600 subcontractors, vendors and small businesses owed money, but Feldman said some of the companies could have multiple claims. That is why MGM Mirage is opening the meeting to all subcontractors.

"We just don't know who they all are and the total number," Feldman said.

CityCenter Chief Executive Officer Bobby Baldwin is expected to oversee the meeting with the subcontractors and will discuss how MGM Mirage plans to handle the closeout process for the project.

MGM Mirage, which owns CityCenter in a 50-50 joint venture with Dubai World, is in a legal battle with Perini, the project's general contractor, over $490 million Perini claims it is owed for work on the project. Subcontractors, who were hired to work on the project but have not been paid, are caught in the middle.

Perini executives have said the general contractor is owed about $100 million of the disputed amount and the rest belongs to subcontractors.

Perini filed a lien against CityCenter and a lawsuit in Clark County District Court to get MGM Mirage to pay the disputed amount. The company has also embarked on a media, Internet and publicity campaign.

Last week, Perini officials and subcontractor representatives met with Gov. Jim Gibbons and some of his staff members over the dispute.

Late Tuesday, Perini President Craig Shaw released a statement that said, "We are pleased to hear that MGM is moving forward with payment of the subcontractors. We appreciate the Governor's involvement and are hopeful of full resolution of all outstanding issues."

Mel Hawkins, president of Apex Electric, a small Las Vegas company that worked on CityCenter, said Tuesday he would attend the meeting at Aria. Hawkins attended the meeting with the governor with Perini but said he is taking a neutral stance in the dispute between the two companies.

Gibbons spokesman Dan Burns said the governor and MGM Mirage officials "are working to make their schedules come together" to have their own meeting on the CityCenter matter.

"The governor views (MGM Mirage's planned meeting with subcontractors) as a step in the right direction," Burns said.

MGM Mirage said two weeks ago it was taking the closeout process away from Perini because the casino operator said the general contractor breached its contractual obligations when it filed a lawsuit over payment.

MGM Mirage officials have said the company is willing to pay subcontractors, but the backup materials provided by Perini were "confusing and disorganized." MGM Mirage also claimed Perini mismanaged the project and performed defective construction work on the Harmon Hotel tower, which was reduced in size and delayed indefinitely.

In a statement, MGM Mirage asked all subcontractors attending the meeting to use the North Harmon Avenue arrival area at Aria, where special valet parking will be available.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

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Copyright (c) 2010, Las Vegas Review-Journal

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