MGM Mirage: Try case in court, not media

MGM Mirage said Wednesday that its dispute with Perini Building Co. and the subcontractors over CityCenter will be resolved in the courts, not through the media.

"While we disagree with all of the claims made in Perini's letter to the governor, unlike Perini, we are not going to litigate this case in the media," Alan Feldman, MGM Mirage's senior vice president of public affairs, said in a statement. "The matter is before a judge, and the courtroom is the appropriate venue in which this dispute should be heard."

Also Wednesday, Perini, many subcontractors and a few trade unions formed a coalition, Citizens Holding MGM Accountable, to pressure MGM Mirage to release the money.

Perini Building Chief Executive Officer Craig Shaw said in a statement Wednesday that unlike MGM Mirage, Perini is "very sensitive to the hundreds of subcontractors and vendor businesses that are being impacted by (MGM Mirage's) failure to pay what is owed.

"Many Nevada-based small businesses and the livelihood of their employees are being jeopardized by their actions," Shaw said. "The very minority, woman and disadvantaged business owners that MGM Mirage encouraged to become involved in CityCenter are now at risk for losing it all."

Perini on Tuesday sent a nine-page letter asking Gov. Jim Gibbons to investigate why MGM Mirage is not paying more than $500 million the builder claims it and its nearly 600 subcontractors are owed for work completed on CityCenter.

Gibbons' office said late Tuesday that the governor had yet to receive the letter.

The letter was also sent to various government officials including both of Nevada's U.S. senators.

A spokesman for Sen. Harry Reid, D-Nev., said the dispute is an issue between the two companies and Reid hopes it can be resolved. MGM Mirage Chairman and Chief Executive Officer Jim Murren has publicly touted the Senate majority leader as having saved CityCenter by calling bank executives to secure financing to finish the project. Reid said in a campaign ad last year that his efforts helped save 10,000 construction jobs.

Sen. John Ensign, R-Nev., could not be reached for comment.

The letter to Gibbons details issues raised in a lawsuit Perini filed seven weeks ago in Clark County District Court. MGM Mirage has yet to file a response to the lawsuit.

Perini also filed a $500 million master lien against the project March 29. Subcontractors have continued to file individual liens through Wednesday.

Perini expresses concern in the letter to the governor about what the builder believes is the gaming company's deteriorating financial position.

Perini said that MGM Mirage has paid only $5.79 billion of the $6.29 billion construction contract. Of the nearly $500 million owed, Perini said $400 million is due the subcontractors.

Perini said the original construction contract grew from $3.5 billion due to MGM Mirage's many design changes and modifications, including many that came well after agreed-upon dates.

MGM Mirage also presented a claim of $60 million to $80 million for the Harmon Tower. The company now claims the tower is a total loss valued at $412 million.

Perini said "it now appears that (MGM Mirage) do not have sufficient funds to meet their obligations," due to the economic downturn and the company's financial struggles.

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