Contractor For New Vikings Stadium Struggling To Meet $737M Hard Budget
One week before Mortenson Construction is scheduled to lock in its guaranteed maximum price for building the new Vikings stadium, the project faces a new issue tied to the facility’s hard construction costs. Industry sources say Mortenson, the project’s general contractor, is struggling to meet a hard budget of $737M, the number approved by project officials on Oct. 4 as part of the Vikings’ stadium use and development agreement. Four days later on Oct. 8, sources said, Mortenson provided the Vikings with new numbers showing them hard costs had increased by $45M to a total of $782M, a major swing in price after months of negotiations. Mortensen Senior VP John Wood wrote in an e-mail, “We have not yet completed the estimating process to arrive at a GMP and it would therefore be inappropriate for me to discuss this subject.” Sources said the new set of numbers has alarmed the Vikings to the point that they have had private conversations with a separate contractor to find out what their options are. Vikings VP/Public Affairs & Stadium Development Lester Bagley said that he could not confirm hard costs were running $45M over budget or that the team has contacted other builders about reviewing Mortenson’s estimates. Bagley said, “It is crucial we bring this project in on budget.” Minnesota Sports Facilities Authority Chair Michele Kelm-Helgen said that the hard budget remains a moving target. She said $782M “is not a number I’ve heard.” She added, “Some of the bids are coming back higher than we had hoped to see, and in some cases, budgeted for. The numbers are all moving around, with things in and out. To this point, none are hard and fast. It’s changing day to day.”
WAITING UNTIL NEXT WEEK: The authority will wait until Mortenson delivers its guaranteed maximum price by the middle of next week before determining whether to solicit input from other contractors. Kelm-Helgen said, “If something significant happens with the GMP, we might have to take a look at the numbers and figure something out.” Peer reviews by architects and builders are not uncommon for major league sports projects, but sources said that taking such action indicates there is a problem with the budget. The hard budget is part of the $975M in total costs for the stadium project, a number covering fees paid to Mortenson and HKS, the stadium architect, as well as upgrades to infrastructure outside the building. The project has gone through several rough spots over the course of development, including a large shortfall in revenue from electronic gaming as a source of stadium funding.