The panel in charge of overseeing construction of the $1.1 billion U.S. Bank Stadium has been in tense closed-door negotiations about what could be a $50 million dispute over change orders and cost adjustments, the outgoing treasurer of the board said Wednesday.
“I don’t think we should be hesitant to say, ‘We have a problem’ and air it out,” said Duane Benson, a Minnesota Sports Facilities Authority (MSFA) board member, who is leaving Aug. 1.
His “worst-case” estimate puts the problem between $35 million and $50 million, but he acknowledged it could be less or more. Eventually, someone is going to have to pay more, someone will get less or the stadium amenities could be scaled down. “Everybody stands to come out less well than they thought,” he said.
MSFA Executive Director Ted Mondale and Chairwoman Michele Kelm-Helgen vigorously disputed the numbers, calling the disputed amount “significantly less” than the $29 million in the authority’s construction contingency fund. Late Wednesday, Mortenson issued a statement saying the value of its unresolved change orders is $15 million, but that number doesn’t include potential future claims.
The dispute is between Minneapolis-based contractor Mortenson, Dallas-based architect HKS and the MSFA Authority, which oversees the construction on behalf of the public. The Vikings, who are not part of the closed MSFA meetings, say they have not seen numbers as high as Benson cited.
What no one disputes is that millions of dollars in change orders are being discussed and negotiated privately.
Taxpayers already are covering $500 million of the cost. Initially, the Vikings were covering $477 million, but since construction began team owners have repeatedly increased their contribution. As recently as last week, the team agreed to pay more for glow lights that will surround the stadium bowl. To date, team owners Mark and Zygi Wilf have put an additional $95 million into the project.
The 66,000-seat stadium set to open next summer is 65 percent complete, but according to the project manager is entering a critical stage. The roof is being installed, the five massive glass doors will go in this fall and most of the interior work remains.
While Mondale and Kelm-Helgen insisted finances are in great shape, Benson said, “That certainly wasn’t the tone of the meeting that I sat in on or I suspect we could have done it in public.”
Kelm-Helgen said closed-door discussions are necessary for “public monies to be protected” and “if these issues were discussed in public this may negatively impact the ability of the MSFA to resolve the issues in a satisfactory manner.”
The state’s contribution to the stadium is capped at around $500 million, however there is a contingency fund for the project. Benson cautioned that the contingency cannot be drained before the stadium opens. He also said the issue isn’t with the team. “If the Vikings want more elevators, the Vikings pay for more elevators,” he said.
Mortenson’s statement said it has been in discussions with the MSFA regarding change orders and “we are hopeful these issues can be resolved in a timely manner.”
Minnesota Vikings executive vice president Lester Bagley said the team is deferring to the MSFA on the issue. HKS, the architect, didn’t respond to a request for comment.
Neither Mortenson nor the MSFA would discuss the nature of the change orders, but everyone noted that adjustments are required in any construction project — especially one of this size, which is the largest private-public construction project in state history.
What is unusual, Benson said, is the lack of a single person leading negotiations on behalf of the taxpayers’ interests. Benson announced two months ago that he is leaving the board after Kelm-Helgen said he was untrustworthy and a liar. Benson repeatedly raised concerns about the MSFA having both an executive director, Mondale, and Kelm-Helgen, who seem to have nearly identical roles and responsibilities.
Benson said the authority’s negotiating stance is weak, often with one person turning to another and saying, “What do you think?”
As the project chugs toward completion, there are fewer opportunities for cuts.
“There needs to be a singular voice saying, ‘This is all we’re going to put in and not a dime more.’ I don’t think that point’s been made,” Benson said. “Somebody or everybody is not going to be happy when this is over.”
Kelm-Helgen said the authority structure is proscribed in state the law and that, “having two MSFA executives involved in decisionmaking on a billion dollar project makes sense and is working well.”
In a statement, Gov. Mark Dayton praised Kelm-Helgen and Mondale for “outstanding leadership” on the project that is “on time, and on budget.”