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Gaming Guru

Tim O'Reiley
 

Judge gives OK to demolish Harmon Hotel

20 July 2012

CityCenter's half-finished Harmon Hotel received a death sentence Thursday.

Concluding four days of often technical testimony, Clark County District Court Judge Elizabeth Gonzalez ruled that CityCenter Holdings LLC, developed and co-owned by MGM Resorts International and Dubai World, could proceed with plans to implode the troubled building. The demolition is a business decision permitted under state law, she said.

With her ruling from the bench, Gonzalez stepped around hours of testimony over who should bear the blame for the Harmon's numerous defects, whether they could be repaired and if the building is a risk to public safety.

All of those factors will almost certainly resurface if the construction defect case goes to the jury trial now scheduled for late June. CityCenter spent $275 million on the Harmon before work was halted four years ago; the cost of imploding the 26-story tower is estimated at $30 million.

Thursday's outcome does not mean that CityCenter can start wiring up explosives. An engineer hired by a sub­contractor in the case will be allowed two weeks to apply for permission to conduct about a week's worth of testing on the structure.

More important, Perini Building Co., the general contractor and CityCenter's main target in the lawsuit, will almost certainly appeal to the Nevada Supreme Court. Although Gonzalez rejected Perini attorney George Ogilvie III's request to stay the ruling while he seeks to get it overturned, she said he could ask again after some related issues are decided next week.

Should CityCenter prevail on appeal, it would still need Clark County Building Department approval for what is sure to be a difficult demolition. Blowing up unwanted hotel towers has become something of a Las Vegas signature event over the years, but rarely has it been tried in such tight quarters. The Harmon sits at the corner of West Harmon Avenue and Las Vegas Boulevard South, between a pedestrian bridge crossing Harmon and the Crystals retail center.

All of these factors raise the possibility that the Harmon could still be standing when the trial begins.

Craig Shaw, CEO of Tutor Perini Building Corp., declined comment after the ruling. Tutor Perini is the successor to Perini.

In a statement, CityCenter said that "demolition was the surest, safest and fastest way" to remedy the safety hazards cited by Clark County officials.

A key factor in Gonzalez's decision was "the overwhelming evidence" that all the companies in the case had every chance they wanted to collect evidence for a trial.

Ogilvie argued unsuccessfully that something as widely publicized as the implosion of a 26-story building in the heart of the Strip would permanently cement people's opinion of the Harmon.

"(A) jury is going to immediately assume that the Harmon was demolished because it had to be for safety concerns, because it could not be repaired," Ogilvie said.

Moreover, he added, "Allowing MGM to demolish that building is allowing MGM to bury its own mistakes."

Perini pins many of the building's flaws on the design commissioned by MGM, while MGM has amassed a catalog of what it considers shoddy construction work.

CityCenter engineers contended that the Harmon cannot be repaired, and would collapse in a serious earthquake. Perini's team concluded it would survive, with severe damage.

Perini has a $300 million lien on the Harmon for unpaid bills relating to the $8.5 billion CityCenter hotel-casino complex, although that should be reduced to less than $240 million after payments are made next week.

There will be more hearings about the Harmon next week on issues that could affect the calculation of any damages awarded by a jury.

The Harmon, originally planned as a 49-story nongaming hotel and condominium tower, was trimmed back and later abandoned after inspectors found flaws in the placement of steel reinforcement bars in concrete walls. The empty building today is nothing more than a giant billboard, wrapped with advertisements. The bulk of the 67-acre CityCenter complex, which includes the Aria, Veer, Vdara and Mandarin Oriental hotel towers, a casino and the Crystals shopping and restaurant complex, opened in 2009.
Judge gives OK to demolish Harmon Hotel is republished from Online.CasinoCity.com.