Dubai World threatened with US $492mn law suit

The main contractor for the US $8.5 billion CityCenter project on the Las Vegas Strip plans to sue the project's owners, MGM Mirage and Dubai World, for a sum of $492 million, according to newswire Reuters.

The threat of the 'mechanic’s lien' was disclosed in a filing to US regulators by Casino operator MGM Mirage, which owns the multi-tower site in a 50-50 partnership with Dubai World.

A mechanic’s lien is a security interest in the title to property for the benefit of those who have supplied labour or materials that improve the property.

Perini Building, which is a unit of Tutor Perini Corp and the main contractor on the project, had no comment.

In its filing, MGM said: "CityCenter believes that its actual obligation to the general contractor is substantially less than the amount claimed and that it is also entitled to significant offsets against the claimed amount."

Dubai World has declined to comment.

Meanwhile, the CityCenter joint venture has obtained a six-month amendment to its $1.8 billion credit facility that would allow for additional construction liens.

MGM also said it has significant claims against the contractor in connection with construction defects at CityCenter's Harmon Hotel tower.

The Harmon, one of the site's six major components, was designed as a 49-story condominium hotel, but the height was halved after it was discovered that rebars had been improperly installed on some floors.

CityCenter, with its flagship Aria casino-hotel, opened in December last year despite MGM nearly defaulting on its debt due to the recession.