The story of the Harmon Hotel will end with a bang—just not the kind of bang CityCenter and owners MGM Resorts International had intended.
Yesterday, the company issued a letter to Ron Lynn of the Clark County Development Services outlining its intentions. “CityCenter has decided that to abate the potential for structural collapse in case of a code level earthquake … , CityCenter will demolish the Harmon Building.”
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The building, which has sat empty since CityCenter opened in December 2009, is at the heart of ongoing litigation between MGM and Perini Building Company, which oversaw its construction. MGM alleges Perini improperly placed rebar that stunted the project’s growth and has left it structurally unsound. Most recently, a structural engineer said the Harmon likely would collapse in a strong earthquake.
Perini alleges the building could have not been properly constructed as designed. The company issued a statement yesterday in which it called MGM’s statement of intent “self-serving and intellectually dishonest.” It goes on to say:
MGM is seeking to implode the building to hide the fact that the Harmon is not a threat to public safety and to avoid having the repairs made that Perini and its third-party structural engineers have offered to do. The real reason for MGM's eagerness to implode the building is clear. MGM is looking out for its own economic interests and trying to shift responsibility for its business decisions and its own engineer's design errors onto Perini and its Subcontractors. There is no question that MGM had buyer's remorse in moving forward with the gigantic CityCenter project during the dramatic downturn in the real estate market in Las Vegas. MGM is now attempting to blow up the Harmon to avoid adding the Harmon as additional glut to its other vacant properties in CityCenter under the guise of "public safety".
The difference a few years make
I can distinctly remember discussing the issue with both parties when I visited Las Vegas for CityCenter’s grand opening. Back then, MGM chief Jim Murren was focused on resolution and completing the project. “At this time, we hope no legal action will be needed to resolve the matter between the parties,” he said.
Reps from Perini seemed resigned. Though they maintained the Harmon design was flawed, they also admitted they should have stopped construction as soon as they saw any problems.
Pat Hubbs, executive VP of field operations, admitted in 2009 that Perini and subcontractor Pacific Coast Steel “should have stopped that whole process (of laying concrete over the rebar) long ago.” He also admitted communication between all the involved parties could have been improved.
Richard Rizzo, Perini’s vice chairman, said the construction errors weren’t conducted in a vacuum, and that many involved parties were aware of the modifications: “There were many people that were involved who were at that point aware of what was being done and were OK with that. It was only after a point where it was discovered by … the structural engineer that what had been done as a modification, he wasn’t comfortable with that, so he put a stop to that. And that started the whole exercise of re-evaluating and deciding what really he felt needed to be done structurally.”
Rizzo said who is at fault is “very blurred,” and that “everybody’s a part of it.”
Today, it seems, both sides are more comfortable pointing fingers than assuming responsibility.
But whoever is at fault, the fact remains: Until it comes down in a showering cascade of steel and concrete or receives the extensive modifications required to make it operational, the Harmon will remain an ever-present black eye on the ambitious CityCenter façade.
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