Vikings stadium cost overruns settled for $16M

The Minnesota Sports Facilities Authority has agreed to pay builder Mortenson Construction $16 million for cost overruns on the new Vikings stadium, even though there isn't a final tally on the overruns.

The MSFA estimates when the stadium is finished at the end of July that amount could reach between $26 million and $29 million.

The vote on the proposed settlement is scheduled for Friday.

Authority Chair Michele Kelm-Helgen telegraphed a cost settlement with the stadium builder earlier this week but wouldn't offer details.

She and Mortenson Construction have since put numbers on the deal, struck at the suggestion of a mediator that stepped in when Mortenson filed for arbitration last fall.

It probably represents a little over 2 percent of the project's overall price tag, although the likely total remains in dispute while work is still going on.

"It's a very complicated, multi-partner agreement that has current and future costs that had to be estimated," said Kelm-Helgen.

The stadium authority already has the cash on hand to pay the settlement. The project budget included a "contingency" fund of more than $30 million.

Kelm-Helgen said the deal would also involve some internal funding shifts and an additional contribution of more than $5 million from the Vikings, a figure the team confirmed.

"The state has not put in $1 of additional money," said Kelm-Helgen. "There is no more state money, number one, and number two, this project has to stay in budget, and if there are additional things, someone else has to pay for it."

The deal caps more than a year of behind-the-scenes jousting involving the Vikings, the stadium authority, Mortenson and a six-firm "design team" that drew up plans for the 65,000-seat NFL stadium.

The disputes have centered on whether ongoing changes, like additional electrical services, material upgrades and other fixes were add-ons or simply unexpected elements of the original plan. That defines who's financially responsible for paying for the work.

"Getting this matter settled is just a huge relief for everybody, all parties, and it's really going to remove a dark cloud that's been hanging over the project for the last 18 months," said Mortenson Vice President John Wood. "Getting this done enables everybody to renew their total focus on completing the project."

Wood, who's leading the stadium building project, wouldn't say what his company wasn't contributing to the deal but said it was structured in such a way that it gave the stadium authority, designers and his company incentive to minimize and more unanticipated costs before the project's official finish date, July 29.

He also added that this has been "unique" in Mortenson's sports construction projects, which include the Xcel Energy Center and TCF Bank Stadium.

"This has been a process of accumulation of multiple items," he said. "It's highly unusual that it's taken this arbitration process to resolve it."

But he also said it was key to Mortenson's profitability in the project.

Other big sports venue projects have seen costs rise much higher. The new stadium for the Atlanta Falcons has ballooned from $1 billion to $1.5 billion since the team announced the project, and Falcons owner Arthur Blank told the Atlanta Journal-Constitution last month that the opening has been delayed by at least three months, to June 2017.

In Minnesota, the Vikings stadium had an original cost of $975 million, but the Vikings have ordered more than $100 million in additional improvements, like more televisions, additional escalators, nicer bathrooms and other amenities — since the design was unveiled.

The building is scheduled to be complete for events and a Vikings game in August, although builders are saying some portions of the stadium are already finished.