x Abu Dhabi, UAEWednesday 26 July 2017

MGM in dispute over hotel on Strip

MGM Resorts International is currently in court hoping to tear down one of the hotels on the CityCenter complex in Las Vegas.

The CityCenter complex on Las Vegas Strip may have become a star performer for MGM Resorts International and Dubai World, but MGM is currently in court hoping to tear down one of the hotels on the site.

The Supreme Court of Nevada is reviewing whether the Harmon Hotel tower ought to be repaired or torn down.

MGM argues that the building is unsafe and company lawyers highlighted, during a court hearing last week, a consultant's report issued in April 2011 that claims the building could collapse in a strong earthquake.

MGM sought court approval to raze the Harmon hotel two years ago, but difficulties arose when the building's general contractor Perini Building Company stated the building was safe and repairable, while raising the issue of unpaid construction costs for CityCenter.

The original plans for the hotel outlined a 48-storey building, but construction stopped at 26 storeys once inspectors found flaws in the reinforcing beams during construction.

The hotel remained shut when the US$8.5 billion CityCenter development was opened in 2009.

MGM is hoping to cut its losses quickly by razing the building, ahead of a $500 million construction defect lawsuit that has been scheduled for January.

According to MGM Resorts the structure cost $275m to build and tearing it down will cost some $30m. There was no immediate ruling from the court, but a verdict is expected in a few weeks.