Las Vegas’ $8.5-billion CityCenter development – the country’s largest privately backed project – may soon have the country’s largest mechanic’s lien. Tutor Perini Corp., Sylmar, Calif., recently notified co-developers MGM Mirage Inc., Las Vegas, and Infinity World Development Corp., that it planned to file a $492-million mechanic’s lien on the seven-building, 18-million-sq-ft complex of hotels, homes and entertainment space. The news was disclosed in a Mar. 12 MGM Mirage (NYSE: MGM) Securities and Exchange Commission filing.
The lien covers unpaid work as well as a progress payment on the still under construction Harmon Hotel & Spa, which won’t open until later this year. Although CityCenter debuted Dec. 16 at 3780 S. Las Vegas Blvd., Perini and its subcontractors have been performing punch-list work. Perini officials could not be reached for comment.
The property additionally had 102 active mechanic’s liens totaling over $73 million as of March 3, Clark County public records show. The largest single lien involved $7.35 million worth of tenant improvement work by Chicago-based subcontractor Tiffiny Decorating Co.
“This kind of post-construction ‘settling up’ process is not uncommon, especially on major projects,” says an MGM Mirage spokesman. “The amount in question, $492 million, while substantial, is actually only a small fraction of the overall cost of building City Center.”
MGM Mirage plans to pursue available remedies against Perini, including arbitration, and is pressing to resolve the matter within the next six months. MGM Mirage also believes that CityCenter’s claims against Perini exceed the amount due. The development is assessing alleged construction defects at the Harmon Hotel project involving improper reinforcing steel work. Perini has claimed design conflicts caused the problems.
"We are investigating Perini’s liability to CityCenter due to construction defects at The Harmon Hotel & Spa,” Absher says. “We believe CityCenter’s actual obligation to Perini is significantly less than the amount claimed.”