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Perini files $492 million lawsuit against MGM Mirage over CityCenter work

CityCenter — the country’s largest private development — faces a large lawsuit.

General contractor Perini Building Co., a unit of Tutor Perini Corp., filed a lawsuit Thursday against several entities controlled by property owners MGM Mirage and Infinity World Development Corp., a unit of Dubai World, seeking $492 million for unpaid construction work.

“We are doing whatever we have to do to protect ourselves and our subcontractors,” said Tutor Perini Chairman and Chief Executive Officer Ronald Tutor. “They simply stopped making payments and started offering excuses.”

The 13-page complaint says the CityCenter construction contract grew from $3.5 billion to $6.8 billion as a result of “numerous design changes and substantial project modifications.”

MGM Mirage delivered those changes 132 to 520 days late, the lawsuit said, and continued making changes “well after the agreed upon dates,” adding $500 million to the project tab. It cites “tens of thousands of owner changes” to the $8.5 billion Strip development.

The lawsuit claims that CityCenter owners demanded “that Perini cease all construction activities at the Harmon” on Tuesday and directed security to escort the contractor off the site. The oval-shaped glass Harmon Tower was scaled back from 48 stories to 26 stories in January 2009 because of construction problems that will require pricey repairs. Harmon was scheduled to open this year.

Perini this month informed MGM Mirage of its intention to file $492 million mechanic’s lien against CityCenter.

“Both parties see these final billings differently,” MGM Mirage Senior Vice President of Public Affairs Alan Feldman said. “We have submitted this for arbitration, which is what the contract calls for, but they don’t think arbitration is appropriate. Ultimately, the legal system will determine what jurisdiction it will go to and how it will all get worked.”

Contact reporter Tony Illia at tonyillia@aol.com
or 702-303-5699.

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