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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Governor meets with Perini officials over MGM Mirage dispute

24 May 2010

LAS VEGAS, Nevada -- In the simmering rift between casino operator MGM Mirage and general contractor Perini Building Co. over a payment dispute for CityCenter, both sides agreed on one aspect.

Officials from the feuding companies want the more than 600 subcontractors and vendors caught in the middle of the legal skirmish to be paid money they are owed for work on the massive $8.5 billion Strip development.

Perini recorded a lien on CityCenter's property for $490 million and filed a lawsuit seeking payment. Subcontractors are owed about $390 million of the disputed funds, roughly 80 percent of the total.

"Get the subs paid," Perini Chairman Ron Tutor said Friday after a 45-minute meeting between Perini officials, subcontractor and building trade representatives and Gov. Jim Gibbons. "We would love to get this down to just between us and MGM."

Last week, MGM Mirage said in a court filing it would begin efforts to pay the subcontractors. However, company officials have not yet been able to resolve some of the payment issues because, according to court documents, Perini's backup materials were highly disorganized.

Tutor said MGM Mirage is creating excuses.

"We have no problem litigating with MGM, we're big boys," Tutor said. "They are just contriving a lot of reasons not to pay subs that killed themselves to get the job done."

MGM Mirage officials did not attend the meeting with Gibbons, which was requested by Perini.

In a statement released after the meeting, MGM Mirage spokesman Gordon Absher said the casino operator stood behind its previous comments on working toward paying subcontractor bills.

"MGM Mirage has never refused to pay the subcontractors the money they are owed," Absher said. "Contrary to claims made by Perini in the media, CityCenter is prepared, willing and able to pay all legitimate bills to subcontractors."

Absher said CityCenter is willing to resolve the dispute in arbitration, but the lawsuit and other public efforts by Perini halted the arbitration process.

The owner of one CityCenter subcontractor, Six Star Janitorial Services, said she tried to attend the meeting at the Sawyer Building but wasn't allowed inside. In the parking lot, subcontractor Rosemary Phillips said that MGM Mirage officials have said they would try to pay her $900,000 bill.

Phillips said her business handled cleanup jobs for CityCenter and employed between 30 and 100 workers at various times on the site. She said Six Star has worked for MGM Mirage for three years and never had trouble being paid. She is now in danger of folding her business.

"This needs to be resolved quickly," she said. "MGM says they will try to help, but don't send a doctor to the funeral."

Mel Hawkins, the president of Apex Electric, attended the meeting with Gibbons because he was asked to participate by a Perini official. However, he still holds MGM Mirage in high regard and is taking a neutral stance on the matter.

Because he owns a minority-owned business, Hawkins said, he was encouraged by former MGM Mirage Chairman Terry Lanni to bid on work at CityCenter. Hawkins, who chose his words carefully, didn't want to disclose what he is owed for work on CityCenter. However, his 120 employees who worked on the project have been paid. If the dispute lingers, it could curtail his business's future efforts.

Tutor was hopeful the meeting, which had about a dozen participants, could resolve some issues.

"(The governor) was sympathetic to the issues, so that's got to be helpful," Tutor said.

Gibbons, who included several members of his staff in the meeting, said he wasn't sure if his office could do much more than bring both sides together to talk out the issues. He said he would reach out to MGM Mirage executives to hear their side of the dispute.

The governor also agreed that both companies should make sure the subcontractors are paid.

"Don't penalize and damage these small contractors who have fully performed their jobs," Gibbons said.

Beyond having the state's business and insurance division look into the contracts and insurance claims, Gibbons wasn't sure what else his office could do.

Gibbons' biggest concern is the potential loss of jobs if subcontractors have to lay off workers. Nevada announced Friday that unemployment hit 13.7 percent statewide and 14.2 percent in Las Vegas.

"We just can't have any further degradation of jobs in Nevada," Gibbons said.
Governor meets with Perini officials over MGM Mirage dispute is republished from Online.CasinoCity.com.