Contractor wants to foreclose on PH Towers Westgate; developer disputes claims

By Steve Green

Published Tuesday, May 11, 2010 | 10:02 a.m.

Updated Tuesday, May 11, 2010 | 3:35 p.m.

The developer of the new PH Towers Westgate timeshare and hotel development in Las Vegas on Tuesday disputed allegations it owes the general contractor $19.3 million for construction costs — and said it’s the builder that owes the developer millions of dollars.

Tutor-Saliba Corp. filed a foreclosure lawsuit in Clark County District Court on Monday against Westgate Planet Hollywood Las Vegas LLC, charging $19.3 million is due under a 2007 contract valued at about $495 million for the 52-story, 1,200-room development linked to the Planet Hollywood resort and Miracle Mile Shops mall.

The lawsuit says Tutor-Saliba on April 8 filed a lien against the property for the $19.3 million, that the lien was served upon Westgate and that Tutor-Saliba is now entitled to foreclose on the project and that its claim is superior to claims of lenders against the project.

Clark County Recorder Office records show the Tutor-Saliba lien is one of at least five active liens filed against the project since November 2009. The others were filed by Waco International West, Patrick Callender, Conti Electric Inc. and Component West LLC.

Privately-held Westgate Resorts Ltd., which is based in Orlando and has projects around the country including in Orlando, Miami and in Park City, Utah, said in a statement it will vigorously fight the lawsuit and that the liens filed against the project by parties other than Tutor-Saliba are duplicative of the Tutor-Saliba lien.

"We have exhausted every effort to work cooperatively with Tutor-Saliba to resolve these issues. We have previously provided Tutor-Saliba a well-documented position that has been independently verified by a third-party construction management firm and proves that not only are these claims totally without merit, but in fact Tutor-Saliba owes Westgate in excess of $18 million. In addition, Tutor-Saliba signed an agreement subordinating its claim to the lenders on this project and therefore has no right to pursue this course of action. We not only intend to vigorously defend these claims brought by Tutor-Saliba, but also seek recovery of millions of dollars in claims due to Westgate, including overcharges, credits due for unperformed work, liquidated damages for untimely performance and failure to comply with the plans and specifications of the project," said the statement by Mark Waltrip, chief operating officer of Westgate Resorts.

Tutor-Saliba is owned by Los Angeles-area construction company Tutor Perini Corp., which is also trying to collect $500 million it claims to be owed for work on MGM Mirage's CityCenter, is in litigation over unpaid invoices and alleged construction defects at the One Queensridge Place condominium project in Las Vegas and is a creditor in the Fontainebleau Las Vegas bankruptcy.

"What has now become evident is that Tutor-Saliba is exhibiting a pattern of pursuing claims for monetary sums after a project is complete and attempting to bolster their position by filing unwarranted litigation and self-serving press releases, as recently evidenced by their parent company’s claim for almost $500 million on the CityCenter project," Waltrip said. "It is equally important to note that over the past 28 years, Westgate has built over 12,000 units across the country and we have a well-established reputation for treating our contractors fairly."

PH Towers Westgate, which opened in December, has been described by its owner as the largest single timeshare building in the world and the first timeshare resort to be fully integrated with a major resort and casino.

A planned second phase would lift the room total to more than 2,700 units and the total cost to about $1 billion, but development of that second phase is years away because of the recession. Currently, Westgate said, about 20 percent of the PH Towers Westgate rooms have been sold as timeshares and the rest are used has hotel inventory by the Harrah’s Entertainment Inc.-owned Planet Hollywood resort.