As a battle between the owner and general contractor of the $8.5 billion CityCenter development in Las Vegas continues to percolate, it appears subcontractors will be able to largely avoid the western-style standoff and, perhaps, some financial woes.
International (MGM), whose board and shareholders on June 15 approved a
change in its name from MGM Mirage effective immediately, told
subcontractors on CityCenter that it will pay all legitimate claims of
money owed to them for work on the Las Vegas Strip project, NACM has
been told by sources with MGM and multiple subcontractor organizations
present at the meeting.
source at MGM, still facing a $492 million mechanic's lien filed by
Perini Building, said the pace of payments depends almost solely on how
quickly the subs turn around documentation and/or billing materials and
discredited media reports that such payments could be held up until
November. The source alleged they are taking this route with struggling
subs because Perini badly mishandled its own paperwork for billing to
the tune of 300,000 haphazardly organized documents strewn about in
dozens of bankers boxes.
Randy Clark, of Nevada-based Young
Electric Sign Co. (YESCO), which worked on the CityCenter project, said
subcontractors he knows appear somewhat relieved by the development, and
that he has never seen a company take this kind of approach when a
hefty mechanic's lien is involved. Clark noted that it appears MGM
officials "are going to try to be good local corporate citizens."
which previously met with Nevada Gov. Jim Gibbons (R) without MGM and
called for the corporation to pay the subcontractors despite the lien,
were not invited to the subcontractors meeting and again did not respond
to requests for comment from NACM. MGM Mirage has alleged the general
contractor failed to even present MGM with a final bill before filing
the record mechanic's lien and botched the construction of CityCenter's
Harmon Hotel so badly that it needed to be reduced by more than 20
floors from its original design.
For its part, Perini alleged MGM
abruptly stopped paying for work already completed earlier this year,
made thousands of change orders on the project's design well after an
agreed-upon deadline and is trying to buy time because of its financial
struggles of late. Perini said nearly $400 million of its mechanic's
lien filing represented what was owed to subcontractors.
Powelson, director of NACM's Mechanic's Lien & Bond Services, called
the ongoing spat "a mess" and said MGM and Perini were likely still in
the first stages of an 18- to 24-month process. Like disputes with other
massive Las Vegas projects such as Fontainebleau and the Venetian, the
situation doesn't appear to be one that will be fully settled quickly.
Brian Shappell, NACM staff writer