In the late 1980s, Golden Valley-based M.A. Mortenson Co. earned the title of general contractor of Target Center, the arena in downtown Minneapolis that became the home of the Minnesota Timberwolves NBA franchise and its WNBA counterpart, the Minnesota Lynx.
How Minnesota's Mortenson became a top contractor for U.S. sports venues
In the past 30 years, Mortenson has completed more than 230 sports venue projects valued at upward of $15 billion.
August 23, 2023 at 11:00AM
The $73 million project opened in 1990 and was the fruition of the construction company's first modern arena contract. It also marked the beginning of its sports and entertainment division.
Mortenson has since grown into a go-to builder of arenas and stadiums across the U.S., including in its home state. During the past 30 years, Mortenson has completed more than 230 sports venues valued at more than $15 billion, winning several awards for design, engineering and sustainability along the way.
Most recently, Mortenson completed the $1.9 billion construction of the NFL's Las Vegas Raiders' new home facility, Allegiant Stadium. Earlier this week, Major League Baseball's Athletics franchise selected Mortenson to be the general contractor for its proposed $1.5 billion ballpark in Las Vegas, where the team plans to relocate by 2024.
Mortenson, which generated $4.9 billion in revenue in 2022, sold $533 million worth of sports construction work in 2022, which accounted for 8% of the company's total sales that year and 5% of the company's total projects for 2022.
Before COVID-19, sports construction projects accounted for 15% to 20% of the company's revenue. In a statement, the company said it expects the division to return to pre-pandemic levels.
Logan Gerken, vice president and general manager of Mortenson's sports and entertainment group — and a former baseball player at the University of Minnesota — talked about the growth of that division and why sports construction is booming for the company. This interview was edited for clarity and length.
Q: How did Mortenson become a leader in this field?
A: We built the business carefully, one project at a time over the years, wanting to only pursue the work when we had our best teams available for it and through continued investment and growth. We've now gotten to the point where it's not necessarily just one big project at a time. It's two or three big projects at a time. It's been over that 30 years that we've continued to grow this business and invest in it directly.
We're always trying to innovate and figure out, develop, what's next, and these projects of this scale and complexity and fast-paced nature give us an opportunity to really flex a lot of our muscle across the organization, bringing together new creative uses of technology and thinking about prefabrication, modularization, design for manufacture, supply-chain integration, our digital integration business, which supports the technology. ... All of those things come to bear on these types of projects, which make them so much fun for Mortenson.
Q: What's driving the rise in sports and entertainment projects for Mortenson?
A: If you look back from the late '90s to the early 2000s, nearly 50% of all of the professional sports venues that exist today were built during that time frame. We're seeing lease expirations on all of those facilities now. Teams and their local partners are working through those lease terms and wanting to extend those leases, and as part of that comes major capital improvements with the venues or a replacement.
The A's are a good example. They're at the end of their lease in the Coliseum and were unable to reach terms with the city of Oakland to be able to extend their lease or come up with agreeable circumstances there. That's certainly not something that you would ever want to wish upon any community, but it's just the realities of those circumstances sometimes.
Another good example: We're working on the renovations at Progressive Field for the Cleveland Guardians. It's one of the more historic ballparks in Major League Baseball, constructed and opened in the early '90s. They were at the end of their lease terms, and they worked with their local authorities to extend their lease by 20 years. As part of that, they're putting capital improvements into the ballpark to both maintain its infrastructure but also enhance the fan experience.
Q: What are some of the most cutting-edge designs and technologies going into arenas that fans maybe didn't think were possible a decade ago?
A: About 15 years ago, we got the iPhone, and it was the creation of the iPhone — and people figuring out how to use these smart devices and the technology — that really started to impact the design of sports venues. That has been increasing significantly the way we track system costs in our buildings. If you go back 15 years, the technology packages in sports stadiums were between 3% to 5% of construction cost. We're now seeing these in the neighborhood of 9% to 12% of construction cost.
We've seen a doubling and tripling of the investment in technology in these venues. What that means for fans is grab-and-go food concession stations, it's more video boards, more audio, it's in-seat delivery, on-demand streaming of augmented reality, highlights, replays being streamed directly to your phone ... all of that giving you more dimensions to the venue experience, and all of that takes a more robust network within the facility.
Things like converge network systems and distributed antenna systems for cellular connectivity are increasingly important. It's like another utility. Just like you would think of mechanical, electrical and plumbing, technology is now absolutely paramount to that experience and fundamental.
Q: To build near the Las Vegas Strip, does that pose any significant logistical issues being near casinos and tourism?
A: It's really not that different than a lot of the projects we do. A significant amount of the work that we put in is about trying to minimize that disruption to existing operations. Progressive Field, we've actually started demolition of the ballpark, and they're still playing in it right now. Building on the Strip, that's a site that's going to be a tight one. It's a 9-acre site, which is similar in size to what we had with Target Field. When you're on such a tight site like that, you're building from the inside out.
The Federal Reserve on Wednesday cut its benchmark interest rate by an unusually large half-point, a dramatic shift after more than two years of high rates that helped tame inflation but also made borrowing painfully expensive for American consumers.
