Vikings stadium deal resolves dispute with contractor — for now

Millions in disputed costs for the new Vikings stadium may be resolved in a deal agreed to Friday by the Minnesota Sports Facilities Authority (MSFA) that includes an additional $5.5 million from the NFL team.

The agreement — which won't be final until construction on the $1.1 billion stadium is done in late July — tentatively resolves an exceptional mediation claim filed by M.A. Mortenson Co. concerning cost overruns on the project.

The MSFA, an appointed body overseeing construction of the stadium on behalf of the state and the city, approved the arrangement after a closed-door meeting Friday on a 3-0 vote with no discussion. The mood afterward was relief.

"We're happy we've reached an amicable solution," said Vikings Vice President Lester Bagley.

The Vikings weren't a formal party to the dispute, but the team is inexorably involved with all the finances at the building as the primary tenant. The team's new contribution was a key side piece to the deal. Since the stadium legislation passed in 2012, the Vikings have increased their spending by $115 million, making the team's portion of the project $592 million.

The disagreement between the MSFA, Mortenson and the design team had been characterized as a $15 million dispute, but the number has since grown to $16.8 million and is expected to continue to climb in the final five months of construction. The MSFA estimated up to $12 million in additional claims could come in before construction is complete this summer, bringing total disputed costs to almost $30 million.

In dispute were changes to the design of the project that added to construction costs, such as additional electrical capacity. Mortenson said the changes should have been covered by the MSFA. In turn, the MSFA said that under the construction agreement, Mortenson bore responsibility for those changes.

The heart of the settlement is $16.25 million that the MSFA will put into an escrow account. The building's designers, led by Dallas-based architect HKS, also have agreed to put an undisclosed amount in escrow for Mortenson.

Upon completion of the building this summer, Mortenson can accept the escrow money or reject it. If Minneapolis-based Mortenson decides to reject the escrow money, the dispute would move to binding arbitration. All sides say they are optimistic the settlement will stand up.

John Wood, Mortenson senior vice president, said the aim is to contain any further growth in costs and "give this settlement the best possible chance of sticking."

Wood wouldn't reveal the total amount, including the undisclosed amount from the design team led by HKS and the MSFA money, but said it's less than $30 million.

MSFA Chairwoman Michele Kelm-Helgen called the resolution a "major milestone," noting that it was less than 2 percent of the entire project. She said the arrangement "creates positive incentives for every party to act in a way that reduces the chance for and amount of future claims" and "definitely does not increase the state's portion" of the stadium cost. State and local taxpayers are paying $498 million.

The shifting of funds leaves $13.5 million in the MSFA's contingency fund for potential problems.

She and MSFA members Barbara Butts Williams and John Griffith voted for the settlement. Members Bill McCarthy and Tony Sertich were absent from the meeting and didn't vote.

The Vikings' new contributions are dedicated to specific upgrades including the addition of walk-through metal detectors, which will soon be an NFL requirement, more cable access and enhancements to the plaza outside the stadium.

In other business, MSFA Executive Director Ted Mondale said the commemorative pavers purchased by fans for the plaza have produced a $1.3 million net profit that will be reinvested in the plaza.

Rochelle Olson • 612-673-1747

Twitter: @rochelleolson