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Howard Stutz

Governor, MGM Mirage meet over disputed payments

27 May 2010

LAS VEGAS, Nevada -- An MGM Mirage official vowed Wednesday to pay subcontractors who claim they are owed almost $400 million for their work on CityCenter, following a meeting between company executives and Gov. Jim Gibbons.

CityCenter Chief Executive Officer Bobby Baldwin said paying some 600 subcontractors, vendors and small businesses caught in the middle of a legal skirmish between the casino operator and CityCenter general contractor Perini Building Co. was "the right thing to do."

Baldwin made his remarks after an hourlong meeting with Gibbons and his staff at the governor's Las Vegas office.

Gibbons met last week with Perini officials and representatives of the subcontractors to discuss the dispute with MGM Mirage, which owns the $8.5 billion CityCenter in a 50-50 joint venture with Dubai World.

Perini executives, who claim MGM Mirage owes the general contractor more than $490 million, have said about $390 million of the disputed amount belongs to subcontractors.

Perini filed a lien against CityCenter and a lawsuit in Clark County District Court to get MGM Mirage to pay the disputed amount. The company also has embarked on a media, Internet and publicity campaign.

Baldwin used the meeting with Gibbons to explain the steps MGM Mirage plans to take to pay subcontractors. The company said in a court filing two weeks ago it was taking the closeout process away from Perini because the general contractor breached its contractual obligations when it sued over payment.

"We will pay the subcontractors in short order," Baldwin said in a statement released by the governor's office. "I intend to pay and pay quickly what they are rightfully owed."

On Tuesday, MGM Mirage said company officials would meet with subcontractors at 10 a.m. on June 9 at Aria to facilitate a payment process.

"MGM Mirage leaders have assured me they intend to move as quickly as possible to pay the hundreds of subcontractors who worked on the CityCenter project," Gibbons said after calling the meeting "productive."

Unlike last week's meeting with Perini officials, the media were not told in advance of the Wednesday session. Baldwin and MGM Mirage Senior Vice President of Public Affairs Alan Feldman met with Gibbons.

The governor, who said last week there was little his office could do to resolve the dispute other than keep the two sides talking, said Wednesday his only concern is to make sure the small businesses were paid.

"The subcontractors represent thousands of construction workers in Southern Nevada," Gibbons said.

MGM Mirage officials have said the company is willing to pay subcontractors, but backup materials provided by Perini were "confusing and disorganized."

Perini Chairman Ron Tutor said last week after the meeting with Gibbons he was hopeful the subcontractors would be paid. "We would love to get this down to just between us and MGM," Tutor said.
Governor, MGM Mirage meet over disputed payments is republished from