The four-year legal battle over the defective Harmon Tower at CityCenter is done, and MGM Resorts got away with as little damage as possible. As 2015 begins, MGM Resorts is on an uptick. The 3 million settlement with general contractor Tutor Perini Corp. provided winners all around, it would appear. In 2008, construction screeched to a halt on the massive 47-story Harmon Tower, when 26 stories in, it was discovered there were defects in the building’s steel reinforcement.
After 15 months of negotiations, emails, phone calls, and two marathon sessions brokered by Chief District Judge Jennifer Togliatti, the settlement was reached. The case was set to go to trial, but Togliatti convinced both sides a settlement would benefit everyone involved. The lack of an epic trial saved the court precious time, several million dollars, and simply allowed both parties to go back to their business as usual.
The lack of a trial also keeps MGM Resorts out of the spotlight, where they are currently sitting on $11.7 billion in long-term debt. The staggering number is manageable though, as the bulk of the debt isn’t due for over five years. Compared to rival Caesars Entertainment Corp., they are in decent shape. It should be pointed out as well that MGM owns 50 percent of CityCenter, and could recoup as much as $88 million from the settlement.
Analysts are now viewing the company as a great investment opportunity, due to the potential future that lies ahead for MGM. Not only do they have properties being built on the east coast and in Macau, but they also have several diverse non-gaming development plans. Those plans include the 33-acre Rock in Rio festival grounds, The Park retail and dining district, and a highly anticipated 22,000 seat sports arena, all on the Las Vegas Strip.
One of the biggest projects on deck for MGM is the $1.2 billion MGM National Harbor in Maryland, near Washington, D.C., which many think will be a game changer, and huge cash cow.
