A few days ago, it was announced that a last-minute agreement was reached between Tutor Perini Corporation, the general contractor of CityCenter, located in Las Vegas, and MGM Resorts International. Thus, a huge trial over the development of the so-called Harmon Hotel, that could have lasted more than a year, was avoided.
It was decided that Tutor Perini will receive “total net settlement proceeds” amounting to $189.5 million for the lien claims it had asserted.
No comprehensive information on the matter was released due to a non-disclosure agreement the two parties have signed. Tutor Perini only made a short announcement with the U.S. Securities and Exchange Commission that it had won the dispute with MGM Resorts, which currently owns 50% of the 67-acre CityCenter complex in Las Vegas. The other 50% of the development’s shares are owned by Dubai World.
Tutor Perini stated in its filing that the agreement was reached after negotiations between the two parties that lasted more than a year. Thus, the dispute between the general contractor and MGM Resorts was resolved.
A spokesman for the company refused to give further details.
MGM Resorts released its own filing with the SEC. According to it, the Nevada-based hotel and gaming operator is supposed to pay the total amount of $173 million so as for the lien claims to be resolved and a prolonged lawsuit to be avoided. Of those, $20 million will be going to CityCenter and $153 million to the general contractor.
MGM Resorts’ spokesman also declined to further comment on the matter.
The so-called Harmon hotel was the only part of the CityCenter complex in Las Vegas that was not finished. The venue was supposed to have a total of 47 stories but its building ceased at the 26th story, after the detection of major construction defects back in 2008.
MGM Resorts hired an engineer to inspect the construction site. It was found out that the building could not withstand a severe earthquake, for instance. The company blamed Tutor Perini for the failure of the hotel and stated that it would not pay any construction costs.
Tutor Perini, on the other hand, claimed that MGM Resorts’ engineers were not right about the quality of the building.
The general contractor announced in its filing that it will pay $11 million to CityCenter and the additional sum of $2 million as an insurance bonus, so as for all the claims of the urban complex to be resolved.
And, as mentioned above, MGM Resorts will pay $153 million to Tutor Perini to resolve the lien claims that are not related to the Harmon project. It will also contribute $20 million to CityCenter in relation to the Harmon lien claims.
