# MGM Faces Deadline



## mark handler (Aug 14, 2011)

MGM Faces Deadline on Harmon Tower

 Posted: Aug 12, 2011 3:11 PM PDT Updated: Aug 12, 2011 3:11 PM PDT

By Nathan Baca, Reporter - email

http://www.8newsnow.com/story/15259487/mgm-faces-deadline-on-harmon-tower?clienttype=printable

LAS VEGAS -- An important deadline hangs above troubled Harmon Tower at CityCenter. After MGM told Clark County their tower could collapse in an earthquake, commissioners imposed a deadline to find a way to fix it.

MGM will not say what their plan to fix Harmon Tower will be, only saying they will meet the Monday deadline. County commissioners want immediate answers concerning the fate of the 27 story building.

"If it's safe, I don't have a problem with it. If it's not safe, then we need to have a plan in terms of how we're going to make it safe. Whether that's taking it down, whether it's fortifying it, that's for engineers to decide," said Clark County Commissioner Steve Sisolak.

Construction halted on the Harmon Tower in 2009 after MGM claims they found major construction defects. Perini Construction blames MGM's engineers for a bad design, but adds Harmon is stable and all problems can be repaired.

A report released last month by Clark County's Building Division says Harmon could completely collapse in an earthquake.

"From a lawyer's perspective, there are issues of who's going to be acting as the lawyers for the various parties. Those are the issues pending before the Supreme Court. From a legal standpoint, the issues of conflicts of interest are being litigated right now," said construction defect attorney Troy Issacson with Maddox, Issacson and Cisneros.

Issacson is not involved in the litigation surrounding the tower. That legal fight is preventing anybody from going inside the tower.

Before that shutdown, inspection pictures show alleged construction defects. The inspection company claims there are metal and concrete defects in walls and several floors inside the tower.

There are three potential options for MGM: fix it, implode it, or take it down piece by piece.

A UNLV construction engineer says there are extreme challenges in imploding Harmon Tower if MGM decides Monday it can't be fixed. That may leave the last option to take it apart.


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## mark handler (Aug 15, 2011)

Legal skirmish over flawed Harmon may never reveal defect blame

MENAFN - McClatchy-Tribune Information Services -- Unrestricted - Tuesday, August 09, 2011

Legal skirmish over flawed Harmon may never reveal defect blame

Aug 09, 2011 (Las Vegas Sun - McClatchy-Tribune Information Services via COMTEX) -- The stunted Harmon hotel

at CityCenter stands as a constant reminder of the most startling construction defects case in Las Vegas: What was

to be a 49-story tower is instead paralyzed and empty at 26 stories because of overwhelming construction flaws.

Situated at one of the most prominent locations on one of the most famous streets in the world, the Harmon stands

as an embarrassment to its developer -- MGM Resorts International, which wanted the hotel-condo complex to

serve as an architectural gateway to the $8.5 billion CityCenter -- as well as to the general contractor, Tutor Perini

Corp., which was overseeing the construction of a building deemed too flawed to finish.

Nobody wants to take the fall for what happened at Harmon.

For now, the tower -- a carcass sheathed in a shiny skin with an ad promoting the show "Viva Elvis" -- is evidence

in unfolding litigation. It can't yet be repaired and completed, or razed, because it holds clues to what everyone

wants to know:

Who screwed up the Harmon?

But we may never find out, because MGM and Perini -- equally matched in resources and political connections --

may be afraid that at a civil trial, either may be found partly responsible. Each company might consider it more

prudent to avoid a courtroom showdown.

"There's an old saying ... that a good settlement is better than a great lawsuit," said Jack Juan, a lawyer with

Marquis & Aurbach in Las Vegas. "If you're looking at a hotly contested trial that could take a few months, you have

to ask yourself if you can sustain this kind of complex litigation with all of these lawyers and experts and whether a

jury is going to pay attention to the details."

Construction stopped on the Harmon in 2008 after an engineer uncovered significant problems with the placement

of reinforcing steel in the building. After months spent fixing the problem, MGM halted construction and topped off

the building.

Perini says it's still owed money for work on CityCenter, an ambitious project that involved numerous design

changes midstream and a budget that ballooned by billions of dollars during construction. In its lawsuit against

MGM filed last year, Perini said MGM halted construction because it no longer made sense in the worsening

economy. In its countersuit, MGM claims it halted work indefinitely because a subsequent investigation revealed

more extensive problems, involving multiple building components, than were initially at issue during the repair

work.

Mistakes and cost overruns are common on major construction jobs, especially on fast-track projects such as Las

Vegas resorts, building experts say. Massive "design-build" structures are often built under ambitious deadlines,

with design and construction occurring at the same time because of pressure to pay down expensive construction

loans, they say.

In the rush to build, "mistakes happen," said Lorence ****zky, a construction law professor at John Marshall Law

School and a partner with Robbins Schwartz Nicholas Lifton & Taylor in Chicago.

"Sometimes, the time schedule prevails, because every day of delay is money out of (the developer's) pocket," he

said. "Things required are simply missed or intentionally omitted."

Most construction-related disputes settle out of court, avoiding the time and expense of complex litigation that

could take several years to resolve. That has held true for major resorts around town with at least one notable

exception.

million for incomplete and defective work on the resort, which opened late after cost overruns and disputed

payments. The parties settled subsequent disputes and appeals in 2005, six years after the Venetian opened.

More important, settlements occur because neither party wants to risk an adverse ruling that could damage a

company's reputation or assets, building experts say. Such considerations are likely in play with the Harmon, a

major project where highly technical building procedures are at issue, they said.

"Nobody necessarily wants to roll the dice" in a courtroom, said Neil Opfer, a construction management professor at

UNLV who has served as a consultant or expert witness in more than 2,000 construction-related lawsuits. Only

about 40 of those cases went to trial, Opfer said.

The truth may not be learned even if the dispute reaches a jury, experts say.

"Each side is going to publish its version of the truth, using their experts who will agree on a set of facts," said

Juan, who specializes in construction defect law. "But do they all have the same facts and are they looking at them

the same way? You may have four witnesses with different interpretations of the facts, not because they are lying

but because ... the truth is always going to be in the eye of the beholder."

Generally speaking, the general contractor bears primary responsibility for delivering a safe and secure building that

meets code requirements and is built according to plan, say building experts not involved in the litigation.

Inspectors and others are likely complicit for not catching problems at the Harmon until the building was well under

way, ****zky said. "The real responsibility rests with Perini, which has an obligation to comply with the plan

specifications," he said.

Proving liability in court may not be simple.

While acknowledging problems at the Harmon, Perini claims it was given faulty design drawings. MGM denies that

claim and cites an engineering assessment that construction was faulty despite sound design plans.

If Perini knew the plans were wrong from the get-go, then the company bears responsibility for seeking revisions

before continuing to build, Opfer said. The full extent of Perini's knowledge isn't known, however, he said.

Yet to be addressed before a judge, jury or arbitrator is the timing and extent of the problems discovered by the

structural engineer hired by MGM to monitor the Harmon's construction. Engineering firm Halcrow Yolles found

problems repeated on at least 14 floors. MGM and Perini acknowledge efforts to fix those problems once they

became known -- although it's unclear when and how they were notified.

Clark County inspectors and those employed by a third-party inspection company hired by MGM apparently didn't

catch the problems, either.

Sorting out who knew what when is a key component in major construction defect suits, as liability may be shared

among multiple parties, Juan said.

"Everybody on one side of the table -- a contractor and subcontractor, let's say -- could be found liable. But the

contractor could say, 'You (the developer) had your fingerprints on it, too. It's up to a decision maker to figure out

whether you are, say, 20 percent at fault or 80 percent at fault. It comes down to a percentage."

MGM and Perini have declined further comment on the dispute beyond recent prepared statements. Clark County

representatives also have declined to comment because of the litigation.

Tensions escalated last month after an engineer hired by MGM to assess the Harmon stated that the building was at

risk of collapse in an earthquake. In a statement, Perini denied the claim and said MGM is misleading the public

because "the Harmon is worth more dead than alive to MGM."

Perini said its efforts to repair the Harmon have been rebuffed by MGM, which released a statement last month that

it has "zero confidence or trust that Perini can and will properly fix a building it has so badly constructed thus far."

"Perini's continued requests to fix the Harmon is like the director of 'Ishtar' demanding a sequel," MGM spokesman

Gordon Absher said last month.

MGM expects to submit a plan for how to resolve the Harmon errors by a county-imposed deadline of Monday. It's

unclear whether the company will spell out plans to repair the building or tear it down, especially after an engineer

hired by MGM to assess the Harmon recently recommended as many as 12 to 14 months of additional testing to

determine the extent of the building's problems.

The Harmon's future is anyone's guess. Some have speculated that it can be salvaged and reopened in better

times, with the public none the wiser. Others appear convinced that the building would cost more to fix than it's

worth and can be taken down carefully with strategically placed explosives.

Don't expect the building to come down anytime soon.

To see more of the Las Vegas Sun go to http://www.lasvegassun.com Copyright ©2011, Las Vegas Sun Distributed

by McClatchy-Tribune Information Services. Formore information about the content services offered by McClatchy-

TribuneInformation Services (MCT), visit www.mctinfoservices.com.

Copyright © 2011, Las Vegas Sun

http://www.menafn.com/qn_print.asp?StoryID={3a944f4d-de1e-44b1-9e1f-198081a53191... 8/15/2011


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## AegisFPE (Aug 16, 2011)

*MGM asks to implode troubled Harmon tower in Las Vegas*

Another Strip project plagued by construction problems and a stumbling economy may have to be put out of its misery.

_By Ashley Powers, Los Angeles Times_

_August 16, 2011_

Reporting from Las Vegas—

The Harmon was envisioned as a 49-story gateway to CityCenter, a warren of luxury hotels and boutiques dreamed up during the Las Vegas Strip's go-go years. Instead, the Norman Foster building was lopped in half because of construction defects and a recession that snuffed out demand for its condo-hotel rooms.

Now the company in charge of the Harmon may scrap it altogether. MGM Resorts International asked county officials Monday to allow it to implode the tower, one of several monuments to the economy's nose dive on Las Vegas Boulevard.

Though the Strip has enjoyed an uptick in visitors, room rates and gaming revenue through June compared with the same period in 2010, national economic jitters could threaten a budding recovery.

Construction of the Harmon was halted after inspectors discovered problems with steel reinforcing bars in 2008. Other parts of the CityCenter complex opened in 2009.

MGM Resorts and general contractor Tutor Perini Corp. are engaged in a nasty legal fight over the gleaming blue tower. MGM Resorts claims construction was sloppy. Perini says the project was poorly designed. Because the stunted building is a key piece of evidence, neither side can touch it until various legal matters are resolved.

Last month, an engineer hired by MGM said in a report that a strong earthquake could fell the building, which stands between the Cosmopolitan resort and CityCenter's Crystals mall on Las Vegas Boulevard. Perini officials dismissed the report as a litigation ploy and said they were "100% confident" that the building was safe.

Clark County officials, who oversee the Strip, had told MGM Resorts to submit a plan by Monday to either fix or destroy the tower. The casino operator said it could take up to 18 months to figure out how to shore up the Harmon "if repair is even a possibility," and asked to implode it, though that would require the court's approval.

Perini officials retorted that MGM Resorts wanted to "avoid adding the Harmon as additional glut to its other vacant properties in CityCenter under the guise of 'public safety.' "

_See also __Proposed timetable calls for demolition to be completed in 6 months_


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