Many already cashing in on Minn. Vikings stadium

Published 9:54 am Friday, August 23, 2013

ST. PAUL — Even before ground is broken on a new Minnesota Vikings stadium, a white-collar brigade of accountants, architects, lawyers and other consultants has locked in millions of dollars in contracts that would complicate any effort to derail the project.

Nearly two dozen contracts examined by The Associated Press reflect ample amounts already spent or committed to developing the $975 million downtown football stadium. They include engineering assessments that cost less than $10,000, a $25,000-a-month law firm retainer and a $34 million deal with a Texas-based architecture firm that’s deep in the design process.

There’s also a contract with M.A. Mortenson Co., the Minneapolis general contractor expected to forge ahead with construction after a groundbreaking tentatively set for November. The company is due a $12.5 million base fee with the chance for bonuses at the end.

Email newsletter signup

It’s difficult to assign an overall value to the contracts because some merely set an outer limit for work being periodically billed, with the best-paid consultants earning nearly $400 per hour and others entitled to expense reimbursements. But documents total in the tens of millions of dollars.

Signed agreements reviewed by AP demonstrate a project at an advanced stage. And despite recent concerns over legal woes of the principal Vikings owners, the stadium that even foes admit is nearing a no-turning-back point.

Minnesota Sports Facilities Authority chairwoman Michele Kelm-Helgen said she expects that point will come in early November when a “guaranteed maximum price” for construction is set. Until now, all of the money spent has come from a $50 million account filled by the Vikings; a state bond sale could come as soon as next month.

“We have no reason to believe that we are not going to be moving ahead,” Kelm-Helgen said, adding that an adjusted timetable will be discussed Friday at a meeting of the authority board.

The authority, which will run the new stadium, has launched an audit into the finances of team owners Mark and Zygi Wilf family finances after a civil court ruling in New Jersey claims they defrauded a business partner in a past development deal. Gov. Mark Dayton said the review is essential to ensuring the $477 million pledge of private financing is “airtight” and that the team negotiated in good faith when saying it couldn’t exceed that amount.

The taxpayer share of the new stadium is $498 million, with portions from the state and city of Minneapolis.

Dayton said this week he didn’t want to prejudge the audit. But he said he has difficulty imagining a scenario where the deal falls apart.

“It’s highly probable it’s going to get built,” Dayton said.

The financial probe has delayed finalization of a lease agreement between the Vikings and the authority. The review is being led by lawyers at Dorsey & Whitney, which also serves as the authority’s general counsel.

The firm has been under contract since last September. Aside from its $25,000 monthly flat fee, the firm is charging for hourly fees of attorneys and paperwork costs.

In most cases, the contracts don’t entitle the companies involved to full payment until various work benchmarks are achieved. But the stadium authority would be obligated to pay up on some agreements if they’re canceled.

Madison, Wis.-based Hammes Company Sports Development could earn $9.8 million plus expenses in its role as the “owner’s representative” on the project. Hammes is the team’s daily consultant on the stadium, keeping owners abreast of progress, safety concerns and development goals. If the project was halted this week, Hammes would be eligible for a $340,000 termination payment that drops slightly with each passing month.

But opponents of the subsidized stadium realize their window for halting the project is closing fast.

“We’re millions of dollars into this thing,” said Republican state Sen. Sean Nienow of Cambridge. “Barring some intergalactic event, no one is going to stop this.”

Nienow, who argues owners got a sweetheart deal at taxpayer expense, said the best his side can hope for now is a public uproar that forces lawmakers to revisit the basic terms and demand more private money go into the deal.

In the case of Target Field, the baseball park the Minnesota Twins now call home, franchise owners wound up exceeding the required $130 million private contribution to the stadium by $65 million. That’s because project costs increased, such as land acquisition prices and amenities outside the gates, said Dan Kenney, executive director of the Minnesota Ballpark Authority.

“The deal changed. It evolved. The team understood this was their one opportunity to do it right,” Kenney said.

For now, Vikings stadium planners anticipate excavation, concrete, labor and other direct construction costs to be $690 million.

Mortenson’s contract with the authority spans almost 250 pages, covering responsibilities, liability and payment details. On top of Mortenson’s base fee, the deal allows $38 million for staging and operations costs the firm is expected to accrue. It also includes the potential for performance bonuses — $2.5 million in total — for delivering an on-time, at-cost stadium and by meeting certain hiring goals.

The contract also spells out penalties if the builder fails to reach “substantial completion” by July 1, 2016. It would face damages of $20,000 for each day it is late and $5 million if a pre-season or regular season NFL game has to be relocated.