Golden Nugget Atlantic City is facing millions of dollars in claims from construction companies that are still awaiting final payment for work on the casino’s $150 million renovation project completed last spring.
In the past 90 days, at least 15 contractors have filed construction liens claiming that Golden Nugget owes them more than $12 million, according to a review by The Press of Atlantic City.
Jeff Cantwell, senior vice president of development for Golden Nugget’s parent corporation, Landry’s Inc., said the company is working with contractors to resolve any disputed claims or change orders for the project. He cautioned that the process involves a collection of national, regional and local contractors and could take “significant time.”
“We are currently working with our team of contractors to resolve these issues and come to a final agreement on contract totals. We continue to make payments in accordance with the approved changes and retainages due,” Cantwell said in a statement Friday.
In an interview, Cantwell estimated that the total outstanding claims were about $12 million, although he added that Golden Nugget has since paid some of those bills. He said some of the disputed bills arose from additional work done by contractors that was not authorized by Golden Nugget.
“My whole point, and Landry’s position, is we’re going to get this resolved one way or another,” he said.
In the meantime, Cantwell said it is often routine for contractors to file construction liens to protect their interests. He said a project this complex can typically result in change orders and potential disputes among owners, developers, general contractors and subcontractors.
“An amicable resolution will be reached with all parties in the near future,” Cantwell said.
Some contractors have turned to local lawmakers for help. State Sen. Jim Whelan, D-Atlantic, said he intends to discuss the issue with the Casino Association of New Jersey, a trade group representing Atlantic City casinos.
“We’re going to talk to the casino association generally about the issue of local contractors. We’re trying to make sure local contractors are being treated appropriately. Obviously, it’s a concern,” Whelan said.
The state Division of Gaming Enforcement, the casino industry’s chief regulatory agency, also has been looking into the matter. The division did the same thing when millions of dollars in construction liens for unpaid bills were filed against Revel earlier this year.
“The division has been actively monitoring these construction work matters and will continue to do so,” division spokeswoman Lisa Spengler said of Golden Nugget.
Spengler declined further comment, citing pending litigation between Golden Nugget and some of its contractors over disputed bills and payments.
Some contractors said Revel and Golden Nugget have created severe financial hardship for small, local construction firms. Revel has repeatedly said it is simply conducting a final audit before it pays outstanding bills for construction on the $2.4 billion megaresort, Atlantic City’s newest casino.
“It’s the same nonsense going on at Revel. It’s just as bad,” Jack Kelly, president of Atlantic Coast Moving & Storage, said of Golden Nugget.
Kelly’s Egg Harbor Township company has provided storage for Golden Nugget’s hotel furnishings, carpeting, bathroom supplies and other items. Kelly said Golden Nugget owes his firm $193,000 but has offered only about 50 cents on the dollar to settle the billing dispute.
“Something like this could run us right out of business,” said Kelly, whose company employs 40 workers. “We never had a problem like this before.”
Kelly’s partner, Bob McHugh, struck a more conciliatory tone. McHugh, who serves as secretary-treasurer of Atlantic Coast Moving & Storage, said Golden Nugget indicated in the most recent round of talks that it intends to pay all contractors.
“They want concessions from us. They want details. They’re asking contractors to work with them,” McHugh said. “As of today, we are in discussions to work out a payment. It’s different than last week.”
John Egnor, president and owner of Rich Services, said Golden Nugget still owes his Pleasantville firm $350,000 to $400,000 for plumbing, heating, air conditioning and ventilation work it performed on the casino’s renovation. Egnor, whose company has 15 workers, said he is considering a lawsuit against Golden Nugget for payment.
“Some of this work has been done for a year. It’s ridiculous,” he said.
Egnor criticized Tilman Fertitta, the Houston billionaire who owns Golden Nugget. He said Fertitta should simply “go to the bank” and withdraw the money that is owed to Golden Nugget’s contractors.
“Honestly, you’re talking about someone who is in the Fortune 500 and (is among) the richest people in the world,” Egnor said of Fertitta.
Fertitta personally financed the $150 million renovation of Golden Nugget, including a makeover of the building’s facade, casino floor and hotel rooms. New retail shops, restaurants, lounges and a spa also were built as part of the project.
Golden Nugget is the former Trump Marina Hotel Casino. Fertitta bought Trump Marina last year for $38 million and immediately rebranded the casino as the Golden Nugget, using the sweeping renovation project to transform the property into a glitzier attraction. Golden Nugget celebrated completion of the project in April.
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