MGM Mirage made a splash when it announced plans for its massive, opulent mixed-use CityCenter project just before the economy crashed. Now nearing its completion, the somewhat troubled project faces the specter of a potential mechanic's lien worth nearly one-half billion dollars.
In a Securities & Exchange Commission filing within the last week, MGM Mirage noted the lead general contractor, Perini Building, on its $8.5 billion CityCenter project threatened a mechanic's lien worth up to $492 million.
If filed, the potential lien from Perini, the second largest general building contractor in the nation, would be among the largest filed in U.S. history. That would be in line with the scope of the project, actually, since CityCenter was the largest privately-funded project at its inception. The mechanic's lien, if filed, would likely come before month's end, MGM Mirage confirmed.
It is also heavily rumored that MGM Mirage is cooking up its own lawsuit against Perini because of alleged building defects and change orders on the soon-to-be completed Harmon Hotel tower of CityCenter, which also features the Aria Resort & Casino, retail and restaurant space, a park, a movie theater, multiple boutique hotels and residential condominiums on the Las Vegas Strip. Representatives from MGM Mirage and Perini were unavailable for comment Wednesday.
Greg Powelson, director of NACM's Mechanic's Lien & Bond Services, says the brewing battle is significant because of the "bottom-line, major-dollars perspective." However, Randy Clark, assistant division manager of credit with Young Electric Sign Company (YESCO), is among those who believe the lien is not too out of the ordinary because its size represents less than 10% of the total cost of the project. Still, Clark admits the firm, which provided signage for several portions of the CityCenter project and is still owed some payments for its work, is "concerned" about the conflict but is optimistic that the parties will avoid a court battle.
More, in-depth analysis of the brewing MGM Mirage-Perini situation will be available in the March 23 edition of NACM's weekly eNews. Our latest edition of eNews can be viewed at www.nacm.org
Brian Shappell, NACM staff writer