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Stakes are high in Harmon hotel construction litigation

8/19/2011 | Construction Blog, Real Estate Blog

Construction industry experts believe that one of the biggest cases in U.S. history involving construction defects may never make its way into a court of law if MGM Resorts International and its general contractor, Tutor Perini, take the cautious route.

At the heart of the dispute is the half-finished Harmon hotel. Originally planned to be a 49-story tower holding hotel rooms and condominiums, the Harmon now stands at an empty 26 stories because construction defects made the building impossible to complete. In a situation like this, construction litigation seems inevitable. However, many cases like this eventually settle out of court because the stakes are so high.

Back in 2008, construction on the Harmon stopped when an engineer’s inspection found serious problems with the building’s reinforcing steel. MGM stopped construction on the building after spending months trying to fix the problem.

After construction was stopped, Perini filed a lawsuit against MGM, stating the developer still owed it money. MGM countered that construction needed to be stopped because of Perini’s mistakes. Perini, however, has stated that the designs it received from MGM were flawed, a claim that MGM denies.

Perini has offered to repair the Harmon hotel, but MGM has rebuffed the offer, stating that the company has no confidence that Perini can fix the problems with the hotel.

In a construction dispute like this one, the stakes are high for developers and contractors alike. If they took the dispute to trial, a jury could find that both parties were at least partially responsible for the flaws, which could damage their reputations. For this reason, many cases involving construction litigation are settled out of court.

Source:, “Legal skirmish over flawed Harmon may never reveal defect blame,” Liz Benston, Aug. 9, 2011