SBJ/April 22-28, 2013/Facilities

Budget forces adjustments on Vikings project

The Minnesota Vikings’ stadium development, already facing issues over public financing for the project, has another challenge to overcome: meeting a fixed construction budget of $690 million to build the 65,454-seat facility.

The tight budget has forced project officials to make adjustments after Mortenson, the Twin Cities contractor selected in mid-February to build the stadium, handed the Vikings an initial estimate that was $100 million more than the fixed number, industry sources said.

Since the team received the first estimate, Mortenson and Thor Construction, its minority partner, have come back with changes to construction pricing to the point that costs are “within acceptable numbers again,” one source said.

Lester Bagley, the Vikings’ vice president of public affairs and stadium development, said there is no reason to be alarmed because the design remains a moving target. The team and architect HKS expect to reveal a final design in the next few weeks.

“We just [teamed] the architect with the builder and are evaluating various options for stadium design,” Bagley said. “It’s part of the process to get feedback on pricing and value engineering. I’m confident we can meet the budget. I don’t think anybody is pushing the panic button.”

John Wood, a senior vice president at Mortenson in charge of the Vikings’ project, said information regarding the initial estimate being $100 million over budget was not correct, but he acknowledged there is a challenge to develop a stadium to meet the needs of both the Vikings and the Minnesota Sports Facilities Authority, the stadium’s landlord.

While the Vikings prefer a building showcasing all the amenities expected of an NFL stadium, the goal of the authority is to develop a multipurpose facility that can fill a role similar to what the Metrodome, the Vikings’ current home, has accomplished over the past 30 years.

“It would be premature to suggest there is a budget problem,” Wood said. “It is a tight budget but [$690 million] is the amount of funding available and it has to be met. We are working hard to satisfy all interests of the authority and the Vikings, and I’m confident we
will.”

To meet the $690 million number, the Vikings have what Bagley called “hard decisions” to make on the facility’s square footage and its roof design. The project calls for a fixed roof with a retractable feature, and building a roof on an NFL stadium eats up a big piece of the construction budget.

“Regardless of whether it is retractable or fixed,” he said, “it covers a lot of steel and a lot of area.”

Wood said the Vikings’ project had forced everyone involved with the stadium design to “be as creative as possible to make it work.”

“I have been very impressed with the work HKS has done,” he said. “Sometimes that wouldn’t be the case with an abundance of money to spend on the project.”

Compared with the three most-recent NFL stadium projects, the Vikings have a much smaller budget to work with relative to design and market conditions for labor and materials.

The San Francisco 49ers’ $1.2 billion project covers about $850 million in hard costs for an open-air stadium built by a joint venture of Turner Construction and Devcon Construction, said Jack Hill, project executive. The remaining $400 million covers land acquisition and infrastructure upgrades, among other costs, Hill said.

Hill served in the same role for building $1.2 billion Cowboys Stadium. The stadium has a retractable roof and opened four years ago with hard costs of $800 million in a market with favorable labor rates, he said.

In New Jersey, Skanska’s contract to build open-air MetLife Stadium was $1.13 billion, said Tom Tingle, the builder’s senior vice president and national sports director. Labor and material costs there run up to 20 percent higher than in the Midwest, Tingle said.

Mortenson has taken a close look at those projects, and Wood said it is difficult to make a fair comparison given that the Vikings’ stadium development has to build in costs for the roof to withstand heavy snowfalls. For the 49ers, there is a premium is tied to seismic conditions, he said.

Bagley said the Vikings expect to reach a guaranteed maximum price with Mortenson late this year. Total project costs are $975 million, an amount that covers infrastructure and relocation costs tied to the team’s two-year interim stay at TCF Bank Stadium.

The public portion of funding stadium construction includes $348 million from electronic gaming in bars and restaurants. To date, that revenue source is falling short of expectations.

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