More structural testing planned for Harmon hotel


The long-running and expensive legal battle over the CityCenter's unfinished Harmon Hotel has likely ground to an indefinite halt.

Attorneys for CityCenter, the mammoth Strip development operated and half-owned by MGM Resorts International, opted in a two-page court paper filed Tuesday night for more testing to find more structural defects. This would lay the foundation for recovering larger monetary damages from contractors.

At the same time, CityCenter held open the possibility it would appeal to the Nevada Supreme Court the conditions that Clark County District Judge Elizabeth Gonzalez attached to the testing, including the revocation of her July ruling that the Harmon could be imploded.

Last week, attorneys for general contractor Perini Building Co., locked in the nine-figure lawsuit with CityCenter over unpaid bills and whether the defects stemmed from bad workmanship or design, all but promised an appeal of their own if CityCenter went that route. Attorneys estimate that moving the main arena of the case to Carson City could delay by several months the start of a jury trial over the Harmon from the current June 24, 2013, date and probably into the following year.

In the meantime, the 26-story Harmon would continue to stand as the world's most expensive billboard amid conflicting opinions over its safety.

However, a trial over payment disputes and construction problems in the rest of CityCenter would proceed in June, effectively cutting the case in half.

The potential flurry of appeals stemmed from a two-week hearing in July, when Gonzalez ruled not only against contractors, by allowing the Harmon's demolition, but against CityCenter, by not permitting it to use extrapolation. This legal technique would have allowed CityCenter to use a sample of defects to project defects for the entire building. But Gonzalez found that the sampling techniques used by CityCenter's experts fell short of judicial muster.

CityCenter attorney Steve Morris termed the setback on extrapolation "unfair," potentially crippling the case. Last week, he sketched out a scenario using sample numbers in which extrapolation would allow a jury to award CityCenter $200 million for Harmon defects. Without extrapolation, that total would plunge to $54 million, because the development's experts tested only 27 percent of certain pieces of the structure by chipping away the finished concrete and examining the steel inside.

As a result, CityCenter requested the chance for more testing to build a larger database, even though that window closed last year under court order. But contractors fought the request, contending that more testing amounted to a "do-over" after CityCenter botched the first effort.

Gonzalez's ruling Oct. 10 was a package that allowed more testing but with several conditions, including leaving the Harmon standing and reimbursing contractors for possibly several million in legal and expert fees tied to Harmon matters.

Perini and subcontractors claim $191 million in unpaid bills on CityCenter, although CityCenter disputes many of the charges.

CityCenter contends that pervasive construction defects have made the $275 million it spent on the Harmon a total loss. Perini experts say the project could be repaired for a small fraction of the amount.

Contact reporter Tim O'Reiley at toreiley@reviewjournal.com or 702-387-5290.

 

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