MGM Mirage officials meet with subcontractors seeking payment

MGM Mirage officials held a closed-door meeting Wednesday with nearly 250 CityCenter subcontractors and their representatives in what the gaming giant hopes starts the process of getting the majority of unpaid bills reconciled by November.

MGM Mirage spokesman Alan Feldman said the 40-minute meeting let the company meet one-on-one with subcontractors, many of whom had previously only dealt with general contractor Perini Building Co.

"This gave us the chance to reach out to them directly and let them know what we need in order to ultimately get them through the process and get them paid," Feldman said.

Feldman said the company has identified nearly 220 "first-tier" subcontractors who worked on the development. He said many of those employed their own subcontractors who the company is trying to identify.

Construction attorney Georlen Spangler with Kolesar & Leatham, which represents seven CityCenter subcontractors seeking payment, also felt encouraged after the meeting.

"At least, there is a line of communication. That's something," she said. "I appreciate the fact that they met us."

MGM Mirage plans to have the majority of the bills paid within the next six months.

"If we can get the information we need and reconcile the various bills, we believe we can get this completely resolved by November," Feldman said. "There might be a certain number of folks where we're not able to do that, and it may go on or even end up in litigation. But for the overwhelming majority of these folks, we think we can get this process done in six months."

Steve Jones, purchasing manager with subcontractor Commercial Cabinet Co., said after the meeting he was concerned that direct negotiations with MGM Mirage could lead to partial payments.

He agreed, however, that the meeting was encouraging.

"I feel better. It was nice to have a line of communication. But the check isn't in the mail yet," said Jones, who has filed a mechanic's lien against the property for money owed. "We will see what happens. Hopefully, it will get worked out."

Construction attorney Brian Pezzillo Robinson also expressed concern that the process could lead to partial payments.

"Sometimes dealing directly with the subs can be more efficient. It can resolve issues quicker," said Pezzillo with Pezzillo Robinson, which represents subcontractor Urata & Sons Cement.

He said dealing with MGM Mirage leaves the door open for subcontractors to sue Perini if the casino company does not pay.

Feldman said the gaming company is not looking for discounts on work done, but will not pay for work completed that is in dispute, such as faulty work at the Harmon Tower or money it already paid to Perini.

Perini has said CityCenter's total construction budget for the five-year building process was $6.285 billion. MGM Mirage has paid $5.8 billion, leaving roughly $485 million in dispute.

Perini said about $390 million of the disputed amount is owed to subcontractors, some of whom are small, minority-owned businesses.

MGM Mirage said in court documents it needs a detailed accounting from Perini, on a subcontractor-by-subcontractor basis, to determine how much is actually owed to the subcontractors.

"We want to get these folks paid," Feldman said. "They did wonderful work making CityCenter come to life. They have bills and they ought to be paid. As long as we can get the paperwork that shows what is rightfully owed to them, we're going to pay them."

Perini filed a lawsuit March 24 in Clark County District Court against MGM Mirage for the unpaid work. The construction company has also filed a master lien against the project for $500 million and many subcontractors have filed individual liens.

"Significant payments" have been made to Perini and MGM Mirage wants to ensure that some of that money isn't owed to the subcontractors now seeking payment from MGM.

"That's part of the process we have to go through," Feldman said. "We received, not even two weeks ago, the so-called final bill from Perini. It's hundreds of thousands of pages that we need to go through."

Contact reporter Arnold M. Knightly at
aknightly@reviewjournal.com or 702-477-3893.