A long-planned renovation of the city-owned Target Center may have to be scaled back in some areas to cope with rising construction costs across the Twin Cities.

The news comes exactly a year after city, Timberwolves and AEG officials announced a $97 million deal to overhaul the 24-year old building. The project is still on schedule for fall 2016 completion, but Timberwolves Senior Vice President Ted Johnson said they know the original budget won't buy as much as they initially expected -- given the current construction market.

The budget has also grown slightly, to $99 million, because the city and team each kicked in another $1 million after the Timberwolves vacated their Target Center offices – triggering a clause in the term sheet. The team is moving to the building formerly known as Block E.

"We're not going to be able to afford the exact same specific project that we had envisioned at $99 million two years ago," Johnson said. "But I don't think that anyone has yet determined that we aren't going to be able to still deliver the intent of that design."

Some of the spending decisions could be more subtle, like picking ceramic tile versus quartz on a wall in the arena, for example. But Johnson said the question is, "Are there enough of those types of choices that make up the difference?"

Golden Valley-based Mortenson Construction, which leading the renovation, released a report in August detailing the rise in material, equipment and labor costs in the Twin Cities. The report said costs have increased 5.1 percent in the last year, compared to 3.9 percent nationally.

The city is paying for half of the renovation, with the Timberwolves funding another $44 million. The venue's operator AEG would pay $5.5 million.

Some of the changes include creating additional gathering spaces, improving pedestrian traffic flow, increasing the seating capacity and fixing loading dock problems. The new exterior would features lots of glass, along with a new metal skin.

A report in the Business Journal Monday quoted Timberwolves President Chris Wright telling a luncheon that inflation means the $100 million project budget is now valued closer to $86 million.

Johnson said that number was intended to illustrate a point, rather than reflect any actual analysis. "It's way too premature to even have any numbers," Johnson said. "Because we haven't broken it down."

Those calculations are somewhat complicated, since the project does not require much concrete but does include many technological upgrades – a sector not experiencing similar inflation.

It doesn't appear the cost increases will have an impact on public coffers, however. "I think that everyone is interested in trying to deliver the project with the same budget," Johnson said.

Hat Tip: Nick Halter / Business Journal