A long-planned renovation of the city-owned Target Center in Minneapolis may have to be scaled back to cope with rising construction costs across the Twin Cities.
The news comes exactly a year after the city, the Minnesota Timberwolves and AEG officials announced a $97 million deal to overhaul the 24-year-old arena.
The project is still on schedule for a 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 robust construction market.
The overall renovation budget also has grown slightly, to $99 million, because the city and the National Basketball Association team each kicked in another $1 million as required by contract when the Timberwolves vacated their Target Center offices. The team offices are moving across the street 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 subtle, such as using ceramic tile instead of quartz on a wall in the arena. 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 is leading the renovation, reported in August that material, equipment and labor costs in the Twin Cities have increased 5.1 percent in the past year, compared with 3.9 percent nationally.
The city is paying for half of the renovation, with the Timberwolves funding another $44 million. AEG, the venue’s operator, 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 feature lots of glass, along with a new metal skin.
A report in the Minneapolis/St. Paul Business Journal on Monday quoted Timberwolves President Chris Wright telling a group at a luncheon that inflation means that 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 it does include many technological upgrades — a sector not experiencing similar inflation.
It does not appear the cost increases will fall to taxpayers, however.
“I think that everyone is interested in trying to deliver the project with the same budget,” Johnson said.
The Target Center cost $104 million to build in 1990.