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December 22, 2014

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Judge gives OK to raze flawed Harmon hotel tower

Image

Steve Marcus

A view of the Harmon at MGM’s CityCenter looking westbound from a helicopter Monday, May 21, 2012.

Updated Thursday, July 19, 2012 | 5:59 p.m.

A Nevada state judge gave the go-ahead Thursday for casino giant MGM Resorts International to implode a flawed hotel tower that was partially built but never opened as the centerpiece of the glittering $8.5 billion CityCenter project on the Las Vegas Strip.

Clark County District Court Judge Elizabeth Gonzalez's pretrial ruling sounded a death knell for the 26-story Harmon Hotel before trial next year in a massive construction defect case involving project general contractor Tutor Perini Corp. and resort owner MGM Resorts.

But it doesn't mean immediate demolition.

Attorney George Ogilvie, representing Perini, said outside court that he'll appeal to the state Supreme Court.

The high court is the only appellate court in the state, and it could take months to rule. Meanwhile, Gonzalez scheduled additional pretrial hearings next week.

"Essentially, your honor, MGM wants a do-over at Perini's expense," Ogilvie protested prior to Gonzalez's order. The ruling came after the judge said she'd heard enough after three days of testimony to decide from the bench whether the building should stand or fall.

Ogilvie argued that demolishing the tower will forever prevent a civil court jury expected to hear a nearly $500 million construction defect case next summer from viewing work that was completed. Ogilvie also said it would leave the impression that the building was demolished because it was unsafe.

"Allowing MGM to demolish that building is allowing MGM to bury its mistakes," he said.

The judge said she'll tell jurors that the demolition was a business decision by MGM Resorts, not an acknowledgement that the building was badly built.

MGM Resorts officials point to a determination by Clark County officials last year that the building as it stands is an earthquake safety risk.

The company issued a statement Thursday saying approval to demolish the structure only means spending another $30 million "to demolish a defect-riddled building that we spent $275 million to construct."

"When Clark County demanded that CityCenter abate the potential hazard created by faulty construction at the Harmon, we determined that demolition is the surest, safest and fastest way to do so," the statement said.

Perini and other contractors challenged the safety finding. They called witnesses this week to testify that repairs could be made at a cost of about $20 million.

Perini and several other contractors allege in a lawsuit filed in 2010 that designs for the blue, glass cylindrical tower were faulty.

CityCenter filed a construction defect counterclaim accusing Perini and contractors of shoddy work.

At 49 stories, the Harmon was designed to add a notch to the Las Vegas Strip skyline. It was cut short when inspectors in 2008 found flaws in the steel reinforcements built into lower floors.

The building today sits empty and festooned with massive advertisements at the Las Vegas Strip entrance of the master-planned complex, which opened in December 2009.

The surrounding 67-acre development includes the glassy Aria, Veer, Vdara and Mandarin Oriental hotel towers, a casino and the upscale Crystals shopping and restaurant complex. It is co-owned by MGM Resorts and Dubai World.

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  1. Chunky says:

    Makes a great billboard and it's doubtful that the city has enough guests to fill it if it were built.

    If Chunky were on the jury he'd want an opportunity to see the alleged defects in person. It's doubtful many people will fully understand all the structure / engineering testimony or whether we'd know what we were looking at. Not sure on this one.

    By the same token, it's understandable that MGM Resorts would want it down ASAP so we can have another margarita / burger bar on that corner.

    Then again, razing it might predispose the jury.

    That's what Chunky thinks he thinks!

  2. When's the last time we had a Cali type quake? My point is that with the building empty, MGM had better be careful, because Perini will cause endless litigation if they take the building down. Yes, MGM paid off most of the subcontractors, but you don't want to kick the main contractor to the curb unless you're ready to have your deep pockets picked clean. I know, I wrote and administered large contracts for 25 years, and the costs of removing/rejecting a contractor are staggering. Be careful, MGM.

  3. even if it could be fixed, can you imagine how hard it would be to rent or sell the space inside. it will forever be considered or thought of as a damaged structure. even getting insurance for a space would be difficult, if not impossible. it seems tearing it down is about the only choice at this point.
    so if this has been a scam from the beginning its been a good one.

  4. Tear it down and rebuild it. Think of all us construction workers who might get work, and those who will for sure get work. Perini, in my mind, will forever be known as who developed this project and failed. Perini and building structurally unsound buildings go hand in hand. A company with too much money and not enough oversight.

    Apparently the costs of reinforcing this structure out weighs the cost of this proposed action. What a joke.