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Leighton has to pay a penalty of US$1.5 million per day if the company delays the opening of Wynn Palace beyond June 25, Steve Wynn has revealed
The fact that the Wynn Palace contractor was unable to complete the construction of the US$4.1 billion resort for its originally slated March 25 opening has caused the construction company to lose a bonus of US$38 million (MOP303.34 million). The revelation was made by the CEO of Wynn Resorts, Steve Wynn, on Monday on the sidelines of the launch of his daughter’s slipper line.
“What has happened is that for the past six months the builder, Leighton, had a 90-day completion bonus of $38 million,” Wynn said, as quoted by news website Las Vegas Sun. “March 25 was the date. They had been telling us up until two or three weeks ago, ‘We’ll make it,’ and they had to tell us in advance so we could start hiring people for the whole run-up to the opening.”
“As it happened, 10 days ago they told us, ‘We’re not going to make the 25th’ because they have hit some complications in installation. We had been using March 25 as the date, so I had to make another announcement [of the June 25 opening]”, the CEO of Wynn Resorts explained.
“If they don’t make June 25, it’s a US$1.5 million-a-day penalty,” Wynn revealed. “If they don’t have the first five floors done by December 24 and we have accepted them, it’s US$200,000 a day. Then, on January 24, if they don’t have the next 10 floors, it’s US$200,000 a day. They say they’re in good shape — but they’re not going to make the early bonus.”
Regarding the postponment of the opening date, Wynn explained that the contractor was forced to delay it because of construction problems.
“We weren’t delayed but I got misled by my builder and not in a mean way,” Wynn said. “They just bumped into some problems. But the furniture has been ordered and the fountains have been tested.”
During the event, Mr. Wynn also revealed that his builders often get “heartburn” during his review of the properties because some details are often not to the standard desired by the gaming operator and have to be fixed.
Wynn too tough on Macau Government
In October, during a conference call regarding the results of Wynn Resorts, Steve Wynn complained about the uncertainty over the number of gaming tables that the operator is going to be authorised to operate in the new Cotai resort.
Now, and some months after representatives of the operator was reprimanded in a closed-door meeting with the government, he openly admits that he went too far in his criticism.
“I think, in the long run, the government will do the right thing and be more understanding,” Wynn said. “They have their way of looking at it, which is not the same way a businessman has of looking at it. That’s true in this country, as well. I was probably a little tougher on them than I should have been on the conference call”.
“But look, I’ve made promises to the people over there, and it’s only fair that they help me keep those promises. But it wasn’t as serious as everyone made it out to be: ‘Wynn blasts government.’ I didn’t blast anybody. I’ve been their fair-haired boy in Macau since Day One. But it’s OK to complain a little. It’s OK to have a different point of view”, he said.
Source
The fact that the Wynn Palace contractor was unable to complete the construction of the US$4.1 billion resort for its originally slated March 25 opening has caused the construction company to lose a bonus of US$38 million (MOP303.34 million). The revelation was made by the CEO of Wynn Resorts, Steve Wynn, on Monday on the sidelines of the launch of his daughter’s slipper line.
“What has happened is that for the past six months the builder, Leighton, had a 90-day completion bonus of $38 million,” Wynn said, as quoted by news website Las Vegas Sun. “March 25 was the date. They had been telling us up until two or three weeks ago, ‘We’ll make it,’ and they had to tell us in advance so we could start hiring people for the whole run-up to the opening.”
“As it happened, 10 days ago they told us, ‘We’re not going to make the 25th’ because they have hit some complications in installation. We had been using March 25 as the date, so I had to make another announcement [of the June 25 opening]”, the CEO of Wynn Resorts explained.
“If they don’t make June 25, it’s a US$1.5 million-a-day penalty,” Wynn revealed. “If they don’t have the first five floors done by December 24 and we have accepted them, it’s US$200,000 a day. Then, on January 24, if they don’t have the next 10 floors, it’s US$200,000 a day. They say they’re in good shape — but they’re not going to make the early bonus.”
Regarding the postponment of the opening date, Wynn explained that the contractor was forced to delay it because of construction problems.
“We weren’t delayed but I got misled by my builder and not in a mean way,” Wynn said. “They just bumped into some problems. But the furniture has been ordered and the fountains have been tested.”
During the event, Mr. Wynn also revealed that his builders often get “heartburn” during his review of the properties because some details are often not to the standard desired by the gaming operator and have to be fixed.
Wynn too tough on Macau Government
In October, during a conference call regarding the results of Wynn Resorts, Steve Wynn complained about the uncertainty over the number of gaming tables that the operator is going to be authorised to operate in the new Cotai resort.
Now, and some months after representatives of the operator was reprimanded in a closed-door meeting with the government, he openly admits that he went too far in his criticism.
“I think, in the long run, the government will do the right thing and be more understanding,” Wynn said. “They have their way of looking at it, which is not the same way a businessman has of looking at it. That’s true in this country, as well. I was probably a little tougher on them than I should have been on the conference call”.
“But look, I’ve made promises to the people over there, and it’s only fair that they help me keep those promises. But it wasn’t as serious as everyone made it out to be: ‘Wynn blasts government.’ I didn’t blast anybody. I’ve been their fair-haired boy in Macau since Day One. But it’s OK to complain a little. It’s OK to have a different point of view”, he said.
Source