CityCenter, the Las Vegas Strip complex owned by MGM Resorts and the Dubai government, has proposed to implode the Harmon, the lone CityCenter property that hasn’t opened.
In a letter to Clark County Development Services, CityCenter senior vice president William Ham requested relief from a court order prohibiting alteration or destruction of the 27-story building.
The unfinished hotel hasn’t opened because of construction flaws. In early 2009, MGM said rebar was improperly installed on multiple floors of the Harmon. At the time, MGM scrapped the condo portion of the property and estimated that the Harmon would open in 2010.
As it turned out, the hotel didn’t open and MGM became embroiled in a bitter legal dispute with contractor Perini Building Co.
Weidlinger Associates, a structural engineer hired by MGM, said in July that the Harmon’s structural flaws are too numerous and varied to repair. Weidlinger also said the building could collapse in the event of a major earthquake.
In a statement, Perini said that MGM wants to blow up the Harmon “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.”
Perini also accused MGM of wanting to implode the unopened hotel for economic reasons.
“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,” Perini said. “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.”
CityCenter’s other properties include the Aria hotel-casino; a Mandarin Oriental hotel; the Vdara condo-hotel; the Veer Towers condos; and the Crystals retail district.
MGM reported earlier this month that CityCenter’s operating loss was $126.6 million for the first six months of 2011, down from a $383.4 million loss in the first half of 2010.
Occupancy at the Aria for the first half of 2011 was 87.7%, a 16.3-point increase. Vdara’s occupancy was 87.4%, a 23.3-point rise. MGM operates both hotels.
MGM’s financial report did not include occupancy statistics for the Mandarin Oriental, which is not operated by MGM.