Mortenson, Vikings stadium authority reach tentative deal in change order dispute

Dive Brief:

The Minnesota Sports Facilities Authority has agreed to put $16.25 million in escrow for contractor M.A. Mortenson Co. to cover disputed costs on the new $1.1 billion Vikings stadium, according to the Star Tribune. The agreement will also see designers HKS Architects deposit an additional, undisclosed amount to the escrow account and the Vikings contribute an extra $5.5 million to the project.
The deal — a result of mediation between Mortenson and the MSFA — will not be final until stadium construction is complete, the Star Tribune reported. The MSFA estimates that up to $12 million in additional costs could arise before the stadium is finished, bringing the total in disputed extras to nearly $30 million.
The funds in escrow will serve as full settlement for all additional costs Mortenson incurs on the stadium. If at the end of the project Mortenson rejects the amount, the dispute will move to binding arbitration.

Dive Insight:

Prior to the settlement, Mortenson maintained that it was due the extra money for design changes on the stadium, but the MSFA said Mortenson should have anticipated the changes and incorporated them into its original bid.

MSFA Chairwoman Michele Kelm-Helgen characterized the deal as a "major milestone" and stressed that it does not obligate the state to increase the $498 million it has kicked in for the cost of the stadium. The $16.25 million came from the project’s contingency fund, which now has a balance of $13.5 million.

And although the Vikings kicked in an additional $5.5 million, that amount will not be put toward the settlement but will cover specific upgrades like walk-through metal detectors, more cable access and stadium plaza enhancements.

Mortenson Senior Vice President John Wood told the Star Tribune that the goal going forward is to prevent additional costs and "give this settlement the best possible chance of sticking." While he did not reveal how much exactly is in the escrow account after the additional money from HKS, he did say it is less than $30 million.

The stadium is the largest public-private venture in Minnesota history, with Vikings owners Mark and Zygi Wilf and state taxpayers splitting the bill. The venue is set to open for the 2016 NFL season.

Nevertheless, the project has experienced a few bumps in the course of construction, such as objections from bird advocates who have said the 200,000 square feet of glass walls in the stadium design will draw migrating birds off the Mississippi flyway, killing them in the process.

Additionally, in August, a worker fell to his death while working on the stadium roof. And last week, Mortenson announced the gutter on top of the building was leaky and needed approximately $4 million in repairs, which the contractor will pay for.