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IN BUSINESS THE STRIP CITYCENTER MAY DO MORE TESTING TO PROVE HARMON DEFECTS By Steve Green senior staff writer C hotel it could use. Perini Building Co., insist it's safe and can be repaired. ityCenter executives are considering conducting more destructive inspec- tions of its flawed Harmon hotel tower on the Strip after a court ruling July 27. Ruling in a lawsuit on construction and design defects and unpaid con- struction invoices for the unfinished and unused $275 million tower, Clark County District Court Judge Elizabeth Gonzalez said CityCenter couldn't use extrapolation techniques to prove its claim the building is riddled with de- fects and is unsafe. The judge couldn't found that CityCenter tell a jury that destructive testing at 397 locations in the building proves its contention there are more than 1,400 defective items in the build- ing because the testing so far hasn't been random enough, a spokesman said. Steve Morris, an attorney for CityCen- ter, suggested the ruling may be ap- pealed and/or that CityCenter may seek court permission to do more destruc- tive testing to bolster its case. That hammering of concrete to determine if reinforcing steel that was supposed to be installed was in fact installed and whether it was installed, spaced and tied together properly. It wasn't immediately clear if the rul- ing would delay the planned demolition RETAIL CLARK COUNTY REACHES 13TH STRAIGHT MONTH OF ECONOMIC GROWTH ness was up 8.5 percent from a year ago, By Cy Ryan staff writer S trong car sales and good business in bars and restaurants in May resulted in a 10 percent increase in taxable sales in Clark County. the agency reported. The sale of build- ing materials, which fell 19.4 percent in April, rebounded with an increase of 15.2 percent compared with the same The Nevada Department of Taxa- month a year ago. tion reported July 27 that taxable sales reached $2.7 billion that month, com- pared with $2.4 billion the same month a year ago. It is the 13th consecutive month tax- able sales have increased in Clark Coun- ty. Statewide, taxable sales, one indica- tor of the strength of the economy, hit $3.7 billion, an increase of 10.4 percent over the same month last year. Lincoln County — down 18.1 percent — and Lyon County — off 0.4 percent — were the only areas to experience de- clines. Auto sales rose 21 percent in Clark County, and bar and restaurant busi- | 6 AUGUST 2012 | General merchandise sales in Clark County rose 4.7 percent, clothing was up 8.7 percent and furniture was up 1.6 percent. Taxable sales in some rural counties showed big gains due to the purchase of construction materials, electrical items and appliances. Sales jumped 136.4 percent in Land- er County and 41.9 percent in Eureka County. Esmeralda County registered a 26.8 percent increase in taxable sales, and sales in White Pine County rose by 22 percent. Collections from the sales tax for the fiscal year through May are 4.7 percent, or $34.5 million, above the forecast of 11 the Economic Forum upon which the state budget is based. Collections from the state's liquor tax are 2 percent, or $799,200, above the prediction. Collections from the live en- tertainment tax are 6.7 percent higher than projections, but cigarette taxes are down 0.7 percent. WAITING GAME: The empty, unfinished Harmon hotel at CityCenter will be demolished. It's not certain how soon. testing can involve the jack- of the hotel any more than it will likely be delayed by litigation and demolition planning. Gonzalez ruled CityCenter can im- plode the building, which it says is a safety hazard that could collapse in an earthquake. Contractors, including VEGAS INC FILE The contractors may appeal the demo- lition order, and CityCenter has to come up with a demolition plan for approval by Clark County, meaning additional destructive testing could be part of that plan — and the demolition faced delays even before the July 27 ruling. "Nearly every time CityCenter has chipped away concrete to review struc- tural work at the Harmon, we have found defects. CityCenter is confident that ample evidence will be produced at trial to prove that the pervasively de- fective construction by Perini and (sub- contractor) Pacific Coast Steel has ren- dered the building unusable and has caused financial harm to CityCenter," CityCenter said in a statement July 27. "In the meantime, we have the court's approval to demolish the Harmon and will proceed consistent with the court's rulings." MGM Resorts International, half own- er and manager of the $8.5 billion com- plex, halted construction of the Harmon tower in 2010 because of the defects, which have been blamed on both design and construction problems. Litigation then erupted between the parties, with the contractors saying they're still owed up to $240 million for their work and anything because they failed to build a Perini says the 26-story Harmon can be brought up to code for about $21 mil- lion. CityCenter says it would cost near- ly $200 million to fix and that such fixes would take more than 10 months longer than demolishing it. CityCenter says the delays associated with the litigation are harming the fi- nances of CityCenter and even if the building was repaired, the company would have to spend another $30 mil- lion overcoming the stigma associated with a repaired building. Perini's contention is that demolition is part of an MGM Resorts business strategy to not complete hotel and con- dominium units that aren't needed be- cause of the recession. "Tutor Perini remains confident that it will prevail when the issues of safety, repairability and responsibility for the issues facing the Harmon tower are considered," Perini said in a statement. Perini, a unit of Sylmar, Calif.-based Tutor Perini Corp., has pointed out that in her order approving the demolition, Gonzalez said the jury would be told that CityCenter had made a business de- cision to demolish the Harmon and that the demolition "is not evidence of any nonconformance with code or plans'' and "is not evidence of any construc- CityCenter saying it doesn't owe them tional defect or any safety issues at the Harmon."