Perini Building has to shave more than $67 million from its construction lien against the complex

A Nevada judge has forced CityCenter general contractor Perini Building to shave more than $67 million from its construction lien against the Las Vegas Strip resort complex.

The 13.8 percent reduction in the $490.3 million lien - revised downward in August from $491.2 million initially sought in March - was approved by Clark County District Court Judge Elizabeth Gonzalez at the request of attorneys for MGM Resorts International, co-owner of the $8.5 billion CityCenter.

Imposed over Perini’s objection, the lien-reduction ruling was significant in that Gonzalez established a procedure for further lien reductions. Lien reductions are important so CityCenter can stay in compliance with debt covenants.

The amount that can remain subject to liens is set to decline on December 31 by an undisclosed amount, but liens above that level can remain if they are covered by bonds or other security.

Perini filed the lien as part of a dispute between the contractor and CityCenter over construction closeout costs and alleged construction defects, particularly at the uncompleted Harmon Hotel portion of the complex.

After the lawsuit was filed, CityCenter started working directly with Perini’s subcontractors in hopes of getting them paid. Through the end of September, CityCenter had paid 79 of the settling contractors $55.7 million, a discount from the $67.7 million Perini had claimed for that work in its lien.

Attorneys for Perini objected to the lien adjustment, charging that in settling with the subcontractors, CityCenter included in the settlements provisions that benefited CityCenter at the expense of Perini.

Complicating the issue is that CityCenter is investigating construction defects at the still-unopened Harmon and on top of that has claimed $63.2 million in “non-conforming work” at CityCenter.