Judge Gives Insurer More Time Before Ruling on Vegas Hotel Demolition
A judicial decision on the fate of the half-built, much-disputed Harmon Hotel on the Las Vegas Strip now faces further delay.
Clark County Judge Elizabeth Gonzales on Dec. 6 granted building insurer FM Global more time related to its probe of the blue-glass landmark at the center of competing lawsuits between owner MGM Resorts International and general contractor Tutor Perini Building Corp., Sylmar, Calif.
Gonzalez gave the insurer until Dec. 13 to outline whether more time is needed for investigation. A non-response is likely to reinstate the demolition order. The judge originally approved the demolition in August, and it was set to begin in early 2014.
Calls to FM Global attorney Scott M. Stickney were relayed to a company spokesman who refused comment because "it is a legal matter."
Although not a party to either suit, FM Global's decision on the owner's $393.8-million insurance claim for the never-opened 400-room hotel is likely to tilt the case in favor of the owner or the contractor.
"Tutor Perini has an insurable interest in the builders risk policy, which goes down with the building if it's demolished," says Tutor Perini attorney George F. Ogilvie. "If CityCenter demolishes the Harmon, it will clearly prejudice a jury."
MGM claims additional time is unnecessary and that the building at the CityCenter development site poses a public safety risk that hampers business.
It's pushing for demolition in a 297-day, three-phase plan approved by the county. A permit has yet to be issued. LVI Services of Nevada is the demolition contractor. The cost is expected to surpass $30 million, but it is unclear what will happen to the hotel site upon demolition.
"[FM Global] has been out there more than anyone else looking at the building. They have everything. This is a faux issue," says MGM attorney Mark E. Ferrario. "This is one of the most defect-riddled buildings ever done in this community. We have very real concerns about public safety."
The dispute centers on improperly installed reinforcing link-beam steel on 15 floors, discovered in 2008 after third-party inspector Converse Consultants falsified 62 daily reports. MGM lopped the 48-story Harmon in half, shedding 207 high-end residences.
