$17M deal to buy plaza takes heat off Vikings stadium talks

A logjam over the plaza parcel could have held up construction.

 

The Minnesota Sports Facilities Authority has agreed to pay $17.1 million for a key piece of land near the proposed $975 million Vikings Stadium — a deal that averts a protracted legal battle over the coveted property in downtown Minneapolis.

The site is home to the Downtown East light-rail station, as well as an underground parking garage with 455 spaces, but it’s not part of the stadium’s actual footprint. Still, authority officials say proximity to mass transit and parking is key to the stadium’s success, and Thursday’s agreement eliminates a final hurdle in the land-acquisition process before construction begins next month.

“It’s a fair price,” said authority Chairwoman Michele Kelm-Helgen. “This is an important piece of land … it’s important that it be held by a public body.”

Earlier this year, the authority offered the plaza’s landowner, Minneapolis Venture LLC, $13 million for the site. But the landowners wrote in an April 10 letter to the authority that $24 million to $26 million was a more appropriate price.

Then, in August, Minneapolis Venture filed suit against the authority claiming negotiations over the land purchase had grown “perplexing and unproductive.”

Maximum budget due

The agreement on the plaza property comes just days before Mortenson Construction, the general contractor, is expected to deliver a guaranteed maximum price for building the stadium.

That figure, based on the development agreement signed by the authority and team earlier this month, was tentatively listed at $737 million.

Kelm-Helgen told legislators at the Capitol Thursday at a meeting of the Legislative Commission on Minnesota Sports Facilities that “right now, we are on budget and on schedule and that’s where we plan to stay.”

Her comments came as an industry publication, Sports Business Daily, reported that the project’s hard costs, which include materials and labor, had soared by $45 million and that the Vikings were “alarmed” to the point of talking with a “separate contractor” to explore pricing options and estimates.

The publication, citing “industry sources,” reported that Mortenson was “struggling to meet” the $737 million goal and approached the Vikings several days after the development agreement was approved to tell them that the project costs had increased.

Kelm-Helgen said later Thursday that some preliminary bids on the project “are definitely coming back higher than anticipated.”

But she said the team, the authority and Mortenson are still working on the budget and evaluating all costs to decide what can or can’t be included in the final design.

She also said that there was no outside review. “There is no plan at this point to do that. I don’t see a need for it,” she said. “I’m confident we’re going to hit that budget.”

Other options on table?

Vikings spokesman Lester Bagley, meanwhile, declined to comment on whether the team had discussed pricing with another contractor.

He simply said, “the budget is evolving,” adding that “it’s absolutely crucial this project be delivered on budget.”

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