Gambling On Demolition

A half-built hotel tower on the Las Vegas Strip will come down unless insurers can convince a judge they need more time to complete their own investigation of the CityCenter’s claim of a total loss.

Photo: Cygnusloop99
West entry 

Clark County District Judge Elizabeth Gonzalez said at a Dec. 6 hearing that she would give insurer FM Global one week to explain why it needs to delay the demolition of the unfinished Harmon Hotel tower, frozen at 26 stories after inspectors found construction flaws.

FM Global wrote the insurance policy covering the Harmon’s construction and is investigating CityCenter’s $398 million claim.

CityCenter is operated and half-owned by MGM Resorts International.

The Harmon was supposed to be a 48-story component of the $8.5 billion CityCenter project that opened in December 2009.

But inspectors found flaws in the steel reinforcements used in the concrete structure and construction was halted. CityCenter attorney Mark Ferrario said the building is a safety risk that must be taken down as soon as possible.

He added the insurance company would be able to conduct tests while the tower is stripped of all of its glass, the first step of the story-by-story demolition.

“We have a non-code-compliant structure sitting on the Las Vegas Strip,” he said. CityCenter’s consultants have said the building could collapse in a strong earthquake – one that has a 50 percent chance of happening in the next 30 years.

Casino execs prefer to destroy the building and replace it with something that can make money and the sooner, the better. Attorneys argued that if CityCenter was so concerned about safety, it would have done more to earthquake-proof the empty building. “It hasn’t done anything in two and a half years to provide for the safety that it is suddenly so concerned about,” said George Ogilvie, an attorney for CityCenter general contractor Perini Building Co.

Perini sued CityCenter for $191 million in unpaid bills while CityCenter countersued for reimbursement on the Harmon alleging shoddy construction, according to the Las Vegas Review-Journal.

Gonzalez approved the demolition over the summer, but withdrew that approval in November at the request of FM Global. But at the Dec. 6 hearing, she warned Perini that she would rule in favor of CityCenter unless she receives a letter within a week explaining the need for further delay.

“Either the investigation of the Harmon is complete, or the investigation of the Harmon is incomplete. There are only two choices,” she said.