MGM Resorts seeks to demolish CityCenter’s Harmon Hotel
Proposed timetable calls for demolition to be completed in 6 months
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The Harmon Hotel at CityCenter sits unfinished with the Veer Towers seen in the background on July 29, 2011.
Monday
15 August 2011
11:51 a.m.
Updated
15 Aug. 2011 7:13 p.m.
Sun Archives
- Legal skirmish over flawed Harmon may never reveal defect blame (8-9-2011)
- Engineer: CityCenter’s Harmon would collapse in earthquake (7-11-2011)
- Harmon flaws haven’t brought big fallout (5-27-2009)
- Perini redirects blame for errors at Harmon (2-9-2009)
- Adaptation or ‘disaster’?: Depends on your view of the Harmon (2-8-2009)
- County wants proof CityCenter structures are free of defects (2-6-2009)
- Watchers were not watched (1-15-2009)
- How did CityCenter tower flaws persist? (1-8-2009)
- MGM Mirage cancels CityCenter condo project (1-7-2009)
- CityCenter hotel project slowed by corrective work (9-17-2008)
MGM Resorts International today said it’s recommending to Clark County that the quarter-billion-dollar Harmon Hotel at CityCenter on the Las Vegas Strip be demolished because of construction defects.
MGM Resorts said it is seeking Clark County Building Department approval to raze the empty, unused building. With that approval, MGM would then seek court approval for demolition.
An initial proposed timetable calls for the demolition to be accomplished in six months, followed by five more months of debris cleanup and site restoration.
At least $279 million had been invested in the building before construction was halted in early 2010 – with all $279 million already written off by CityCenter. CityCenter is half owned by MGM Resorts International.
By court order, the building cannot be demolished while CityCenter and the building's general contractor, Perini Building Co., slug it out in court over defects in the 26-floor structure and unpaid CityCenter construction costs.
The demolition recommendation is sure to be opposed by Perini, which insists the structure is safe and that it can be repaired.
MGM Resorts and Perini are mired in litigation over the Harmon, with the latest twist being concerns that the Harmon could collapse in an earthquake. Because of those concerns, the county had required CityCenter to come up with a plan for the Harmon.
In a letter to Ron Lynn, a top Clark County Building official, William Ham, senior vice president of CityCenter facility improvements, said: "CityCenter has decided that to abate the potential for structural collapse in case of a code level earthquake ... CityCenter will demolish the Harmon Building."
Perini on Monday called MGM Resorts' statement about plans to implode the Harmon "self-serving and intellectually dishonest" and reiterated charges that design errors contributed to the building's problems.
"Perini agrees that the fastest way to end the dispute over responsibility to repair MGM’s design errors would be to blow up the building and destroy the evidence. However, that would be far from the end of the dispute. MGM is seeking to implode the building to hide the fact that the Harmon is not a threat to public safety and to avoid having the repairs made that Perini and its third-party structural engineers have offered to do," the builder said in a statement. "The real reason for MGM’s eagerness to implode the building is clear. MGM is looking out for its own economic interests and trying to shift responsibility for its business decisions and its own engineer’s design errors onto Perini and its subcontractors. There is no question that MGM had buyer’s remorse in moving forward with the gigantic CityCenter project during the dramatic downturn in the real estate market in Las Vegas."
Perini also disputed studies suggesting the Harmon could be felled by an earthquake, saying in its statement: "MGM’s contention that the Harmon is unsafe is absolutely untrue. The Harmon does not present any current life safety issues even for a 'code-level' seismic event."
In what turned out to be a day marked by dueling press releases, MGM Resorts fired back late Monday with this statement: "Perini’s accusation of an evidence-destroying conspiracy demonstrates a ridiculous irony considering their consistent refusal to perform any testing of their own on Harmon and aggressively opposing testing by others. By seeking to avoid the depth of the problems at Harmon, Perini shows it has no concern for public safety or the truth, only for itself. At this point, Perini is simply a defendant trying to blow smoke and limit its financial liability.''
Gordon Absher, an MGM Resorts spokesman, said the company had consulted with experts who reported that repairs may not be possible and that it would take 18 months to conduct tests and come up with an approved, permitted design to fix the Harmon -- if repairs are even possible.
Such repairs then would take another two to three years to complete, Absher said.
“Based on their expert advice, CityCenter is recommending that the structure be demolished by implosion. We have been assured by demolition experts that a properly executed implosion will not pose health or safety problems for residents, visitors and adjacent businesses,’’ Absher said in a statement.
Perini has charged that MGM Resorts is using the defects as a pretext to get rid of a building for which it has little use because of the economic downturn – while publicity about potential earthquake dangers would likely forever taint the building and make its rooms difficult to market.
Unless their lawsuit is settled, MGM Resorts is likely to argue in court that if the Harmon had opened in solid shape and on time, it would have added substantially to the overall CityCenter experience and its profitability as it was envisioned at one point as a luxury, hip property.
Because of the construction defects involving concrete and reinforcing rebar at the 400-room, nongaming boutique hotel, it was limited to 26 of the 49 originally-planned floors.
Before the construction defects were discovered, the Harmon was intended to have some 200 condominiums atop the 400 hotel rooms.
In its latest quarterly filing with the Securities and Exchange Commission, Perini’s parent company, Tutor Perini Corp. of Sylmar, Calif., in the Los Angeles area, said that as of June 30 it and its subcontractors were owed some $222 million for work at CityCenter including the Harmon. This is down from the $490 million Perini initially claimed was owed in a March 2010 lawsuit, as the amount at issue has been reduced by MGM Resorts paying some subcontractors directly.
MGM Resorts, in its own filings, has asserted its claims for defective construction at the Harmon and said its damages at least offset Perini’s claim over the unpaid bills.
The lawsuit has been stalled in Clark County District Court for months as the parties wait for a ruling from the Nevada Supreme Court on whether certain attorneys can participate in the case.
The Harmon sits on a strategic piece of land on the Strip south of The Cosmopolitan and across the street from Planet Hollywood.
MGM Resorts International has not yet announced plans for the parcel should the building come down.
Sun reporter Joe Schoenmann contributed to this report.
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Discussion 7 comments
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level it and bill mgm/perini for services rendered. fireworks are optional.
Oooh, this should be fun. I'll have to visit Vegas to see this.
600 million dollars goes whoosh! Brand spanking new everything to be leveled to dust and debris...disgusting.
You'd think some of these idiots would learn a thing or two about greed and hubris after something like this, but how much you wanna bet that they won't? They'll just move on to the next clusterf***.
While MGM Grand and Perini fight this out, the real questions are:
Who were the Clark County building inspectors who signed off on the continuing construction? and more importantly...
How much were they paid off?
LV and Clark County are more corrupt than Cook County, Illinois, and that's pretty hard to beat, at least outside of a third world country.
What does the interior look like?
"What does the interior look like?"
Huh????
It does make sense to demolish the building. Enough damage has been done to its image that people will not feel safe in it - regardless of what some competing engineers may say.
logic..just asking how much of the inside of the Harmon is finished.
It should be possible to document the "as built" condition during demolition to preserve and allow the Court to resolve the parties' claims in the litigation while mitigating the continuing damage to City Center.from the as built condition.
I've been saying it for the past year: CityCenter is going to be sold for scrap by 2012. This is just the beginning.
Mgm was in a big rush to finish City Center. What do have now. A building that has to be demolished and half empty City Center.
Where were the Clark County Bulding Inspectors during this construction? My simple home plumbing replacement required three inspections by the City, one before, one during and a final inspection before the walls were closed up. What about all those steel workers, cement workers and construction workers, they didn't the see the problem? Where was the union, after this was a proud union project? This construction stinks and deserves a Grand Jury criminal investigation to find out what happened.
@mar100 - You hit the nail on the head. Where were the Clark County Building Inspectors? They were paid off to go away.
Look for the union label
The City Center is a gigantic fail. It's the most boring place on the Strip.
Hire only Union quality contractors.
If Perini thinks it's as sound as he thinks it is why don't he buy MGM'S Interest.
Damned if you do and damned if you don't. It's a lawyer feeding frenzy. So what's wrong with LV. A great example.
It has GOT to be brought down. Imagine it a trembler did take this down, and here we had had the chance to safely demolish it. Perini is at fault for their lack of oversight as the general contractor which hired Converse Consulting (which was the third party that signed off on each of the inspection documents without actually bothering to do the inspections). And now Perini is simply being scumbags by trying to halt the demolition and convince everybody that the building is safe, just so that they can avoid paying the piper. Don't ever want to see Perini's name (or another incarnation of them) on a construction sight in this Valley, again.
As for the charges made by some that Clark County is at fault: I don't claim to know. Yes, you would think they have the ultimate oversight responsibility. I do know that the third party -- Converse -- had the inspection responsibilities delegated to them. I do not know if this is the widespread practice elsewhere in the country. For precisely what happened here, this practice of delegating inspections to private companies (companies that are hired and paid by the contractor, no less) should be terminated. If the county doesn't have the manpower to physically inspect every last project that was simultaneously being slapped together during the go-go years of the past decade, then dammit, maybe that's a sign that growth was out of control. In the least, the county should have demanded special funding from the various developers for the temporary hiring of out-of-state inspectors; just as much of the union manpower for construction was "borrowed" from other locals, maybe the same should have been arranged to properly man-up the inspection work force.
In any event, I won't defend Clark County against the accusations made by others. If nothing else, they didn't make waves when they should have when they realized they were obviously undermanned. The building commissioners and county commissioners and various city councilors were, indeed, corrupt, in that they just wanted growth, growth, and more growth. To hell with the risks. Bruce Woodbury, Oscar Goodman, and all the public officials of the past decade are the true villains, here.
I agree samjung--cc is about as interesting as that dump on the end of Fremont street, the Golden Gate. I just saw this documentary on Las Vegas history beginning with the Flamingo and Bugsy Siegel. The narrator said that LV is in the midst of its third dark age--the first being the 70's (that era was portrayed in the movie "Casino"), the second beginning with the MGM hotel fire in 1980 (another Kirk Kerkorian disaster), and the third beginning with the crash of 2008. CC was supposed to be a model for the new LV but instead it has been an example of everything that can go wrong with a big construction project.
This surpasses their first construction faux pax, by far. Remember, it was the MGM that built the MGM Grand with a giant lion at the opening. Turns out, Chinese are superstitious about entering a lions mouth. If I remember correctly, it cost MGM 100 million to redesign the entrance to the Grand.
if all else fails, let it be a monument to the face of corporate greed.
Neither the LVRJ nor the Sun ever bother to define "Code Level Earthquake" in their stories, perhaps pandering to MGM's rhetorical line in its litigation with Perini. Clark County's building officials, who abjectly failed in executing their duty to inspect the Harmon Tower while it was being built, are also pandering to MGM in their desire to win the litigation against Perini. However, poking around the internet, looking for Nevada's definition of "Code Level Earthquake", I found a lot of research and models by the Nevada Seismological Laboratory at UN Reno. They show that in terms of credible scenarios, the largest earthquakes in Las Vegas would emanate from faults on Black Mountain and Frenchmans Mountain. The size of the largest credible earthquakes would be roughly the size of the Northridge Earthquake, which lasted for 10-20 seconds, and had a "strong" moment magnitude of 6.7. The largest earthquakes predicted for the Las Vegas Valley would be in the range of 6.4-6.5. In the Northridge earthquake, a large number of reinforced concrete structures, in the San Fernando Valley and to a lesser extent in West LA along the 405 Freeway corridor, failed and collapsed. However, according to the research by the Nevada Seismological Laboratory, an earthquake that large, in Las Vegas, would occur once every 15,000 to 35,000 years. In "balancing the equities" in terms of preserving evidence versus protecting the public from a sudden collapse of the Harmon Tower, I would be very surprised if the Nevada Supreme Court or the District Court would enforce an order by Clark County or MGM that the tower be imploded. A judge allowing evidence to be destroyed based on a 20 second in 15,000 year risk would be laughed off the bench in this gambling town. That's why this mysterious and scary term "Code Level Earthquake" has been coined by the MGM pandering press and the County, rather than using the real statistical risk of the tower collapsing in a Northridge sized earthquake.
They can open a gift shop in it dipstick