CityCenter contractor says it expects payment from MGM Mirage

By Steve Green

Wednesday, March 17, 2010 | 8:39 a.m.

CityCenter general contractor Perini Building Co. today weighed in on its lien dispute with the $8.5 billion resort complex in Las Vegas, saying it will continue with efforts to collect the $491.2 million it says is owed.

Last week, CityCenter managing partner MGM Mirage disclosed Perini had delivered an intent to file liens against the project for about $492 million.

MGM Mirage at that time said it would dispute the claimed amount and also said it has counterclaims over construction defects at the Harmon Hotel part of the project, where construction has been suspended. MGM Mirage said its counterclaims could exceed the $492 million in threatened liens.

Today, Tutor Perini Corp., the parent company of Perini Building Co., confirmed in a Securities and Exchange Commission filing that on March 11 Perini Building filed a "Fifteen-Day Notice of Intent to Lien" with CityCenter for $491.24 million.

"Under Nevada law, the company was required to deliver this notice at that time to preserve its ultimate lien rights in the event of non-payment by MGM of amounts owed to the company. The amount referenced in the notice consists primarily of contract receivables, but also includes claims for additional work, for the company and its subcontractors and suppliers," Tutor Perini, based in the Los Angeles area, said in its filing.

"The company continues to expect to receive payment from MGM of amounts due for work on the CityCenter project. The company intends to continue to pursue collection of all amounts owed, to exercise all rights and remedies available to it and to defend itself vigorously against any claims that MGM ultimately decides to pursue," Tutor Perini said. "The company also has contractual indemnities from the responsible subcontractor, as well as existing insurance coverage that it expects will be available and sufficient to cover any liability associated with the Harmon Hotel situation. The company is not aware of a basis for other claims that would amount to material offsets against what MGM owes."

Construction remains suspended for the Harmon and no opening date for that component of CityCenter has been set. When work resumes, it's scheduled to be completed at 28 floors, rather than the planned 49 floors, because of the construction defects.