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StumbleNew group enters dispute between MGM Mirage, Perini
Published Thursday, May 20, 2010 | 3:38 p.m.
Updated Thursday, May 20, 2010 | 5:26 p.m.
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- MGM Mirage says it’s working on CityCenter subcontractor claims (5-14-10)
- Gibbons to meet with builder over CityCenter (5-10-10)
- CityCenter contractor critical of MGM Mirage in letter to Gibbons (5-5-10)
- CityCenter slugfest pits owner vs. builder (3-29-10)
- CityCenter contractor says it expects payment from MGM Mirage (3-17-10)
- CityCenter, lead contractor dispute $492 million claim (3-12-10)
On the eve of a meeting between Nevada Gov. Jim Gibbons and Perini Building Co. and its CityCenter subcontractors, another group has entered the fray over CityCenter construction payments by sending a letter to Gibbons critical of Perini.
The group includes homeowners at the luxury One Queensridge Place condominium project in western Las Vegas.
Perini is in litigation with the One Queensridge developer similar to Perini’s litigation with CityCenter developer MGM Mirage.
Both disputes involve unpaid construction invoices and alleged construction defects.
Perini has launched a public relations campaign against MGM Mirage, including seeking the intervention of Gibbons, and claiming MGM Mirage refused to pay $500 million in legitimate construction costs for CityCenter. MGM Mirage has cited construction defects at the Harmon Hotel and elsewhere at CityCenter in denying $500 million is due.
Nevertheless, MGM Mirage has said it’s bypassing Perini and is working to pay subcontractors itself.
A letter to Gibbons from One Queensridge Place homeowners association board member Thomas Spiegel says Perini is seeking to foreclose on condominium units there in order to recover on its claims against the developer; and that Perini has taken the position that homeowners have no right to present a defense in the court hearing a foreclosure action.
"In our experience, Perini is a very different company than the one it portrayed itself in its May 3rd letter to you (regarding CityCenter)," Spiegel’s letter says.
Perini's parent company, Tutor Perini Corp. of Sylmar, Calif., described the Queensridge dispute this way in a recent regulatory filing: "The developer of the project, Queensridge Towers LLC/Executive Home Builders Inc., has failed to pay Perini Building Co. for work which Perini and its subcontractors performed on the project. Queensridge has alleged that Perini and its subcontractors are not due amounts sought and that it has backcharges from incomplete and defective work."
The Queensridge construction contract was valued at about $154 million, court records show.
In his letter, Spiegel complained that the One Queensridge Place developer has been struggling to obtain project records Perini was obligated to preserve -- but that Perini used "sophisticated wiping programs to sanitize its project server and project computers after it was ordered by the District Court to preserve all project records."
Perini today disputed the allegations.
"Perini and its subcontractors have been trying to get final payment on this financially troubled luxury condominium project for over two years without success," the company said. "Mr. Spiegel completely misrepresents Judge Denton’s decision. In reality, and as stated in his decision, no relevant or prejudicial records were lost as a result of Perini’s standard project close-out procedures, which the court agreed are designed, and in fact do, preserve all project records. Unfortunately the developer has chosen to place the property owners in this position. Perini would welcome any efforts to compel the developer to meet its payment obligations on the Queensridge project."
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The HOA is shooting at straws with this one. Firstly, these are separate issues.
Secondly, Perini cannot foreclose on condominium units if they were sold with clear title.
If the units are still held by the developer, then Perini has it rights to the property. However, wouldn't there be construction liens on the property?
Thirdly, why is the HOA getting into the fight with Perini instead of the developer.
This is a circle jerk if I ever heard of one.
The article is not clear on this. But, if Perini holds construction liens, then they can foreclose on the condo units, even if the condo units were sold with clear title. The condo owners have no recourse. Title insurance policies typically take exception to many things, one of which is construction liens.
This should serve as a lesson to BOTH parties that future projects should require gradual payments as work progresses, at the satisfaction of the owners of work performed to date, and to spec, accordingly payments made to the construction companies and subcontractors.
Another Perini #$%^&* up !!!!
I thought the GOVO was for "limited government" - why is he getting involved with the private sector??? Where in the constitution doews it say the Gov is to play "Holmes on Homes"??
Someone should sue him for wasting tax dollars on a private sector issue...what is he going to do inspect the parking garage???
Yeah, I don't see how any Governor can be of any use in this dispute, especially the incompetent LuvGuv.
In just about any project...once change orders hit the contractors, the disputes over payments escalates. Owner issues change order, contractor analyzes, reestimates, completes drawing changes (arch, engineer) and at the same time the project has to continue on schedule. It becomes one giant headache for all parties involved. Who's working from new drawings, who's working from outdated drawings?....
My experience has been that the most smoothly run projects are the ones that limit or simply eliminate change orders thru due diligence in the design process..from ALL parties (owners, architects, engineers and contractors). Make the design documents stick with minimal or no changes. Once MGM changed City Center during construction...the meltdown in communication began
why would Perini want to foreclose on their own pig in a poke?
Could MGM pay Perini if they wanted to?
Can you imagine the greedy scamming going on with these billion dollar construction projects? (before, during, and after).
Another great comment envirn...construction projects are billed monthly. These owners just don't pay up.
TomD very good comment. Change orders are the heart and soul of the dispute surrounding city center. Everyone should realize that the Harmon is an insurance issue not a reason for MGM to withhold money. MGM needs to sell some more bonds and pay up. If there are really defects, then there are specific subcontractor's responsible. MGM isn't paying demolition subs on projects without any defects because of some error another subcontractor made somewhere else. That is ridiculous. Remember CC is 19 distinct projects with individual budgets.
Navadd,
Glad to see you learned how to spell ridiculous. However, your comment about change orders being at the heart and soul of the dispute, and the Harmon is an insurance claim is about as ignorant as it gets. Change orders happen at 90% or more of any large construction project. 1 million or above. You or Tom don't think an 8 billion dollar project isn't riddled with change orders? That this would be different if the customer were Harrah's and somebody else was the super?
The Super is in charge of defects. They are responsible for the Huge screw ups at the Harmon. The fact that MGM is trying to pay subs is extroardinary. With other groups coming forward and making the claims they do against Perini makes them look VERY suspect.
Make an original argument Navadd, don't tack onto somebody else's original thought. Halfwit!!
Really Gov. Gibbions? Is the state of Nevada in such good shape that you have time to spend on a non government related civil suit. Or is that you are friends with a big player or two in the game.
Perhaps you could take a few minutes to pick a phone and call the Dept. of Immigration and Naturalization and ask them to come and get some of the 500 thousand or so illegal aliens hanging around our neighbourhoods!
Taking our jobs, selling their drugs, stealing our tax dollars!!