MGM's Shoddy Suit
Stop whining and pay your debts, MGM Mirage (Stock Quote: MGM). You're not the first to go bust in Las Vegas, and you won't be the last.
The casino owner launched a multimillion dollar counter-suit last Friday against the contractor responsible for building its $8.5 billion CityCenter complex, saying its workmanship was shoddy and its billing left many subcontractors unpaid. Perini Building fired the first shot in the legal battle when it sought payment for its work in building CityCenter, the white elephant now posing as a posh hotel on the Las Vegas Strip.
In its counter-claim, MGM Mirage said that it has begun paying subcontractors despite Perini's contractual obligations to pay them. On the other side, Perini maintains they would gladly pay the subcontractors once MGM Mirage pays them in full.
We say it's pretty obvious that MGM is acting like a sore loser as its prized property bleeds more cash than a Vegas ATM after midnight.
The casino company claims that Perini performed unsatisfactory work across the CityCenter complex including the retail mall and the Aria convention center. They also maintain that problems with improperly spaced reinforcing steel at CityCenter's Harmon Hotel led to the tower being shortened and its opening delayed.
Why MGM would trumpet to the world structural defects in its own hotel, we have no idea. Gamblers certainly don't want to be worried about the roof caving in when they are laying down their next wager.
More importantly, we seem to remember the construction delays more as a function of MGM's legal and monetary tangles with its partners in Dubai than any major construction snafus.
Of course, we could be wrong about which party is truly at fault. As the saying goes, "What happens in Vegas, stays in Vegas," so we may never know what really went down while CityCenter was going up.
But it's a safe bet that CityCenter will continue to founder if MGM keeps dishing out its own bad press.
Dumb-o-meter score: 85 — The house doesn't always win...if it acts dumb.