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MGM Mirage and Perini Building Co. Disputing $492 million in Construction Bills;
Contractor Filing Liens Against CityCenter Owners

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

Mar. 13, 2010--MGM Mirage and Perini Building Co. are disputing payment of almost $500 million from the total construction budget of $8.5 billion for the CityCenter development.

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.

In the filing, MGM Mirage and Dubai World, its 50-50 joint venture partner in CityCenter, said the amount owed is far less, primarily due to construction defects that halted building of the Harmon Hotel.

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 CityCenter'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 CityCenter 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 CityCenter'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 CityCenter," 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.

The 67-acre CityCenter development opened in December.

The Associated Press contributed to this report.


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