Two Way Hard Three | Las Vegas Casino & Design Blog

Yow! That is a hell of a letter, very interesting reading.

Just a few initial thoughts:
1. There is a strange lack of punctuation in parts of this letter that confounds me.
2. I think that the degree to which the Minority-owned businesses/Woman-owned businesses card was played was a little over-the-top.
3. Why write the governor about this? Is there a precedent in Nevada whereby the governor has launched investigations to study why some companies do not pay their bills? Seems odd to me.

bonk!

This project has caused a big stain on everyone that has been involved with it. MGM made major errors in judgement in building it as they did, the way they did, all in a single phase, before they could get an idea on how it would perform, and also on how the customers would perceive the project. Perini, who i always considered to be a highly skilled company, the best of the best, tarnished their reputation also, by huge design and engineering flaws, and the failture to execute proper construction prodedures. We've been erecting skyscrapers in this country for 100 years now, and they fail on a small 50 story structure. Yet they pulled off the 37 story, complex leaning towers, with a few issues though. How Perini can expect to be paid in full for a 50 story building that ended up being about 25 floors, is beyond me. Perini claims they didn't receive change orders for work? Well then Perini might have made a fatal mistake, by not stopping the job until they received their written orders. I know the job was rushed, and Perini was pressured by MGM to keep the job on schedule, but you don't make multi-million dollar changes on a hand shake. I wish you could, I wish it were that simple. But if you plan on billing for work done, then you better have a change order or a PO to back it up. I hear it from customers every day, no problem just bill me for it. And that's fine on w $100 change, but you don't do that on a million dollar change. This is going to be a huge mess, and unfortunately, as much as I hate to say it, the ball is in MGM's court. They can drag this out for months, into years.

Gov. Gibbons will meet with Perini on May 21. What precedent is there for a governor to become involved in these issues which are already in the legal process?
http://www.lvrj.com/news/builder-duns-citycenter-93250489.html

Posted by Dave

I'd feel a lot better about this if they could have gotten the name of the company right. It's written "MGM/Mirage" throughout the letter, while it's really "MGM Mirage." And the first paragraph has many grammar and sentence construction issues, to the point that it's distracting.

I understand that it's a complaint letter, not a best-selling novel, but if you can't proofread an 11-page letter that you're sending basically to the world, you're not making a great case about your attention to detail.

I'm not even getting to the substance of the letter, but to send something out in this state really should be embarrassing to the company.

This is all about posturing and hoping to apply political pressure to get a solution. Perini probably realizes this could take months to work through arbitration and they may not have sufficient documentation for a clear win. Much of Perini's argument hinges on verbal assurances which can be difficult to prove. Perini is on the hook to their subs (who are probably pretty desperate to get paid).

On a side-note, I spent the last 3 nights at Aria (my second visit). The service was good (especially at Sage and Lemongrass), but I had issues with Verizon reception, room was not made-up at check-in, and (after only 4 months) the lamination was peeling on the room's desk and shelving. Crystals had some encouraging foot traffic. Vdara was a ghost-property. The P.U.B. is now killing business at Beso.

More sad stories of CityCenter subcontractors in the Las Vegas Business Press:
http://www.lvbusinesspress.com/articles/2010/05/10/news/iq_35732865.txt

Its official. MGM has finally ruined The Mirage:
http://www.vegastripping.com/news/news.php?news_id=3260

parched-

"This is all about posturing and hoping to apply political pressure to get a solution."

I'll try my best not to break the rules here, so I won't go into the details of why this whole thing is a game of political charade. But yes, Perini is really trying to rehash "hurt feelings" over the MGM Mirage/Jim Gibbons breakup.

Dr. Dave & Brian-

Yep, I think I also have to give the advantage to MGM at this point... Especially since they're now paying the subcontractors to sweep up that issue. Perini just can't expect to be let off the hook for all those construction defects and all those construction worker deaths.

From talking with someone with first hand knowledge of the Harmon construction, incomplete and "impossible" building plans hindered the tower from the get go. Some aspects, all of which were mentioned in Perini's letter, were not possible to build in reality. I think if Perini can show proof that the plans for Harmon were faulty from the start, they may have a shot. If not, I think it's a win for MGM Mirage.

I read both the Perini complaint and the MGM Mirage countersuit documents. I was somehow surprised that there wasn't a better breakdown of how the disputed monies are alocated to the various parts of City Center. In other words if part of the $490 million Perini is asking for is for work on Vdara then why isn't that amount broken out. How can Perini place a lien on a portion of City Center, let's say Mandarin Oriental, if all the monies owed are for the Harmon and nothing is owed for Mandarin Oriental? As with any large business entity these days, I am sure each building falls under one or more subcorporations of MGM Mirage.

Finally I am also surprized that nothing was mentioned about the people who died building the project and the OSHA findings. MGM Mirage could use that as another fact that Perini wasn't doing their job to manage the construction properly.

"Some aspects [of Harmon], all of which were mentioned in Perini's letter, were not possible to build in reality."

Steve, forgive my obtuse question, but if Perini knew this at the time, why didn't they make an issue of it at that point? If they went along with plans they knew were not feasible, that sounds like a major point that MGM can score against Perini.

"Steve, forgive my obtuse question, but if Perini knew this at the time, why didn't they make an issue of it at that point? If they went along with plans they knew were not feasible, that sounds like a major point that MGM can score against Perini."
David, that's actually a great question you bring up. It's my understanding (and I may be wrong) that Perini did in fact bring this to MGM Mirage's attention at the time and Perini was left to "figure it out". I believe Perini wanted to "start over" once they realized this would be impossible to build, but we faced with pressure from MGM to go as planned and fix the solution. If I had been Perini, I would have made a much bigger deal out of this and perhaps halted construction on Harmon until it could be redesigned or have the rebar and floor bracings completely overhauled. On the other hand, Perini was facing serious penalties if they didn't finish CityCenter on schedule, so I do think they were just trying to "get it done" as "best" as they could. Obviously, their "best" wasn't good enough in this case... and in the end, Perini is the one with egg on their face.
I really think Harmon was a disaster from the get go with all parties taking partial blame in the matter. .

"Steve, forgive my obtuse question, but if Perini knew this at the time, why didn't they make an issue of it at that point? If they went along with plans they knew were not feasible, that sounds like a major point that MGM can score against Perini."
David, that's actually a great question you bring up. It's my understanding (and I may be wrong) that Perini did in fact bring this to MGM Mirage's attention at the time and Perini was left to "figure it out". I believe Perini wanted to "start over" once they realized this would be impossible to build, but we faced with pressure from MGM to go as planned and fix the solution. If I had been Perini, I would have made a much bigger deal out of this and perhaps halted construction on Harmon until it could be redesigned or have the rebar and floor bracings completely overhauled. On the other hand, Perini was facing serious penalties if they didn't finish CityCenter on schedule, so I do think they were just trying to "get it done" as "best" as they could. Obviously, their "best" wasn't good enough in this case... and in the end, Perini is the one with egg on their face.
I really think Harmon was a disaster from the get go with all parties taking partial blame in the matter. .