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Unfinished Tower Is Stark Reminder of Las Vegas’s Economic Reversal Unfinished Luxury Tower Is Stark Reminder of Las Vegas’s Economic Reversal
(about 3 hours later)
LAS VEGAS – It turns out there is something more complicated than shoehorning a seven-building, 17-million-square-foot, $8.5 billion complex of hotels, casinos, high-end shops and luxury condominiums – known as CityCenter − into the bustling heart of the Las Vegas Strip. LAS VEGAS — It turns out there is something more complicated than shoehorning a seven-building, 17-million-square-foot, $8.5 billion complex of hotels, casinos, high-end shops and luxury condominiums — known as CityCenter — into the bustling heart of the Las Vegas Strip.
Tearing part of it down.Tearing part of it down.
The Harmon Tower, promoted as a luxury hotel appealing to a new generation of big-spending Las Vegas revelers, today languishes at the gateway to CityCenter, itself just three years old. Construction was halted at floor 26 – the Harmon was planned at 49 stories – after Clark County inspectors uncovered construction defects in 2008. The Harmon Tower, promoted as a luxury hotel appealing to a new generation of big-spending Las Vegas revelers, today languishes at the gateway to CityCenter, itself just three years old. Construction was halted at floor 26 — the Harmon was planned at 49 stories — after Clark County inspectors uncovered construction defects in 2008.
That set off a convoluted battle of blame and lawsuits that has left the Harmon in build-it-or-tear-it-down legal limbo. A trial is set to begin this year.That set off a convoluted battle of blame and lawsuits that has left the Harmon in build-it-or-tear-it-down legal limbo. A trial is set to begin this year.
The unfinished tower enjoys a prime location on Las Vegas Boulevard, a vacant anchor of the most of-the-moment development on the Strip – a mini-city of sleek and slanting Modernist towers just south of the Bellagio Fountains. CityCenter is a burst of adventurous 21st-century architecture on a Strip dominated by kitsch. The unfinished tower enjoys a prime location on Las Vegas Boulevard, a vacant anchor of the most of-the-moment development on the Strip — a mini-city of sleek and slanting Modernist towers just south of the Bellagio Fountains. CityCenter is a burst of adventurous 21st-century architecture on a Strip dominated by kitsch.
But more than anything, the Harmon stands as a symbol of overconfidence and an overextended construction industry rushing to keep pace with a boom of building and profits that gripped Las Vegas 10 years ago: an era when few people could foresee a day of too many hotel rooms and gambling tables, of an economic downturn so severe it could keep tourists away.But more than anything, the Harmon stands as a symbol of overconfidence and an overextended construction industry rushing to keep pace with a boom of building and profits that gripped Las Vegas 10 years ago: an era when few people could foresee a day of too many hotel rooms and gambling tables, of an economic downturn so severe it could keep tourists away.
The blue-tinted shell looms over Las Vegas Boulevard, largely unnoticed by the thousands of tourists who walk by every day. If it serves any purpose now, it is as what may be the most expensive billboard in the country. On a recent day, half of the north side of the $275 million building sported a poster for “Zarkana,” a production of Cirque du Soleil, at the Aria, a hotel in CityCenter that is up and operating.The blue-tinted shell looms over Las Vegas Boulevard, largely unnoticed by the thousands of tourists who walk by every day. If it serves any purpose now, it is as what may be the most expensive billboard in the country. On a recent day, half of the north side of the $275 million building sported a poster for “Zarkana,” a production of Cirque du Soleil, at the Aria, a hotel in CityCenter that is up and operating.
“It’s like you have this dead space – use it for something,” said Chris Giunchigliani, a Clark County commissioner whose district includes Las Vegas. “The whole Strip is overbuilt. We overbuilt rooms. We overbuilt everything.” “It’s like you have this dead space — use it for something,” said Chris Giunchigliani, a Clark County commissioner whose district includes Las Vegas. “The whole Strip is overbuilt. We overbuilt rooms. We overbuilt everything.”
The likelihood that construction faults will result in the razing of the Harmon is arguably something of a gift for MGM Resorts International, one of its principal owners, a reason not to open a hotel that many analysts say would struggle during this economic downturn. That is particularly the case since two years ago, the always-bustling Cosmopolitan Hotel − catering to a similar demographic − opened, directly across the street. The likelihood that construction faults will result in the razing of the Harmon is arguably something of a gift for MGM Resorts International, one of its principal owners, a reason not to open a hotel that many analysts say would struggle during this economic downturn. That is particularly the case since two years ago, the always-bustling Cosmopolitan Hotel — catering to a similar demographic — opened, directly across the street.
“This gives them a chance to reset,” said Billy Vassiliadis, the head of the Nevada advertising agency that represents the Las Vegas Convention and Visitors Authority. “It’s a great space, a premium piece of real estate. They could rebuild it; they could build a different venue.”“This gives them a chance to reset,” said Billy Vassiliadis, the head of the Nevada advertising agency that represents the Las Vegas Convention and Visitors Authority. “It’s a great space, a premium piece of real estate. They could rebuild it; they could build a different venue.”
In a continuing court battle, MGM blamed its contractor, the Tutor Perini Building Corporation, for the construction defects and sought to force the company to pay damages and the cost of dismantling the building, around $400 million. “The building is unusable,” said Alan M. Feldman, the senior vice president for public affairs at MGM. “The county says it can’t be occupied. The county asked us for a remediation plan, we gave it to them and that was to take the building down.”In a continuing court battle, MGM blamed its contractor, the Tutor Perini Building Corporation, for the construction defects and sought to force the company to pay damages and the cost of dismantling the building, around $400 million. “The building is unusable,” said Alan M. Feldman, the senior vice president for public affairs at MGM. “The county says it can’t be occupied. The county asked us for a remediation plan, we gave it to them and that was to take the building down.”
“We had a contract with Perini that we would pay them to give us a certain kind of building type – in this case a luxury hotel,” Mr. Feldman said. “They haven’t kept up their end of the contract. It’s a shell of a building that the county says isn’t safe.” “We had a contract with Perini that we would pay them to give us a certain kind of building type — in this case a luxury hotel,” Mr. Feldman said. “They haven’t kept up their end of the contract. It’s a shell of a building that the county says isn’t safe.”
Perini responded in court that it was the fault of the designers and not the builders and that the problems could be fixed without tearing down the building. A lawyer for Perini did not respond to telephone calls and e-mails seeking comment.Perini responded in court that it was the fault of the designers and not the builders and that the problems could be fixed without tearing down the building. A lawyer for Perini did not respond to telephone calls and e-mails seeking comment.
The problem was spotted by building inspectors who reported that metal rods designed to provide structure support for concrete – rebars – were incorrectly placed or missing and that the building would not be able to handle its own weight. The engineers warned that the Harmon could collapse in some sort of cataclysmic event. (Las Vegas is prone to earthquakes.) The problem was spotted by building inspectors who reported that metal rods designed to provide structure support for concrete — rebars — were incorrectly placed or missing and that the building would not be able to handle its own weight. The engineers warned that the Harmon could collapse in some sort of cataclysmic event. (Las Vegas is prone to earthquakes.)
William Robinson, a professor of economics at the University of Nevada, Las Vegas, said that he doubted that MGM would want to rebuild the hotel, noting the troubled financial history of CityCenter and its struggles in filling the rooms in the other hotels. Even before this legal battle, MGM had announced that it was abandoning plans to put 200 condominiums on what would have been the top floors of the Harmon. William Robinson, a professor of economics at the University of Nevada, Las Vegas, said that he doubted that MGM would want to rebuild the hotel, noting the troubled financial history of CityCenter and its struggles in filling the rooms in the other hotels. Even before this legal battle, MGM had announced that it was abandoning plans to put 200 condominiums on what would have been the Harmon’s top floors.
“MGM has tried to cut back on the whole project,” Mr. Robinson said. “If you are a conspiracy theorist, you think they are just looking for a way to get out of it.”“MGM has tried to cut back on the whole project,” Mr. Robinson said. “If you are a conspiracy theorist, you think they are just looking for a way to get out of it.”
“Are they going to replace it with something else?” he asked. “Are they going to replace it with a different facility? That will tell us what’s really going on: it’s a fine location.”“Are they going to replace it with something else?” he asked. “Are they going to replace it with a different facility? That will tell us what’s really going on: it’s a fine location.”
Mr. Vassiliadis, one of the Strip’s most energetic boosters, said he would be surprised if MGM, assuming it succeeds in demolishing the building, replaces it with another hotel.Mr. Vassiliadis, one of the Strip’s most energetic boosters, said he would be surprised if MGM, assuming it succeeds in demolishing the building, replaces it with another hotel.
“Vegas used to have the mentality of ‘Build it and they will come’ – and they did,” he said. “I used to freak out every time they put up another 5,000 rooms, but sure enough they filled them. “Vegas used to have the mentality of ‘Build it and they will come’ — and they did,” he said. “I used to freak out every time they put up another 5,000 rooms, but sure enough they filled them.
“But the last four or five years showed our dependence on the national economy: we always knew it, but this is the first time it really hit us,” he said. “I’m guessing there will be a lot more measurement on the part of everyone going forward.”“But the last four or five years showed our dependence on the national economy: we always knew it, but this is the first time it really hit us,” he said. “I’m guessing there will be a lot more measurement on the part of everyone going forward.”
MGM has given no indication of what may happen with the property, though Mr. Feldman, in the interview, repeatedly described it as a choice location for a hotel.MGM has given no indication of what may happen with the property, though Mr. Feldman, in the interview, repeatedly described it as a choice location for a hotel.
“The proximity of that building to the Strip is really amazing,” he said. “And when you are up in it – and only a handful of people have been up in it – the relationship of those rooms to the Strip, the energy, is remarkable. I am being personal about this, but I actually think it would have been amazing.” “The proximity of that building to the Strip is really amazing,” he said. “And when you are up in it — and only a handful of people have been up in it — the relationship of those rooms to the Strip, the energy, is remarkable. I am being personal about this, but I actually think it would have been amazing.”