Vikings trim some stadium amenities, because they only have a billion dollars to play with

What do you get when you’re a team that has $1.1 billion in public stadium subsidies? Not anything you want, apparently, because $1.1 billion doesn’t go as far as it used to:

Officials for the team and public authority overseeing construction have been forced to trim their project wish list to keep the downtown Minneapolis stadium within budget.

Among the potential casualties: a 400-stall parking garage a block north of the stadium, a skyway linked to a ramp a block south, two large escalators and as much as 40 feet from the height of five massive, pivoting glass doors at the venue’s main entrance.

“We only have $975 million in the budget, and there’s only so many things you can get under that number,” said Vikings Vice President Lester Bagley.

This is actually pretty common in stadium deals — for some reason, there’s not a stadium developer in the world that can manage to come up with a cost projection that doesn’t end up with overruns. (If you’re wondering whether they do this intentionally in order to lowball costs and make it easier to get stadium plans approved, you are a horrible suspicious person with no faith in human goodness.) Still, it’s pretty impressive that we’re now talking about “value engineering” for projects with a near-billion-dollar price tag.

Anyway, this news is apparently stirring controversy in the state legislature that approved the plan, because I see there’s a headline about a legislator raising questions about the Vikings’ lease:

State Rep. Pat Garofalo is questioning a provision in the lease for the new Minnesota Vikings stadium that prohibits gun shops from being vendors in the new facility.

Oh. Never mind.


4 comments on “Vikings trim some stadium amenities, because they only have a billion dollars to play with

  1. Neil,

    I read the ‘no gun thing’ as a Vikings only policy. Meaning, they can’t have “gun giveaway day to the first 80,000 fans!” I think guns and shows and whatnot are allowed as long as the Vikings are not hosting it. There are other clauses such as no prono and no head shops. People’s stadium my ass!!! :-)

    http://blogs.mprnews.org/stadium-watch/2013/10/10/lawmaker-objects-to-vikings-stadium-gun-ban/

  2. Far be it from me to defend NFL owners… but as someone who has gone through the design and tender process for a small to midsized housing development, I can say this:

    It may not be all their fault.

    The first thing construction managers and companies want to know is “what is the budget?” They don’t actually smirk as you answer that question, but it is pretty close. From that point on, even with the best of intentions, the owner/manager is something of a passenger. They’ll lay out what they think you can do for the money you have using “current” project cost info. Anything you ask them about “affording within the budget” they will say, absolutely, it should be no problem within your present parameters”… beware.

    One of the main problems is, when the tender goes out you aren’t going to get as many bidders for each section of the project as you think. In fact, you may only get one or two bidders for certain parts of the project, and it’s entirely possible that one of those two bidders has no intention of doing the job because he thinks he can farm it out to the other bidder if he gets it (we had a local guy who bid 2.5 times the estimate and expected to get the contract because he was local, and had already talked to the other bidder about hiring them to do the work).

    In the case I was involved in, the plumbing and mechanical contracts alone came back nearly 100% over our estimator’s “Best Estimate”, and put us over budget.

    Construction managers are really, really good at convincing you you are on budget right up until the point at which you put out the tender (which, for those who haven’t been through the process, aren’t just RFP/RFQs, but rather binding offers of work).

    Then, when you are ready to start building with your allegedly accurate cost estimate (10%) in hand, you get the tender back and find out you are amazingly 22% over budget – and only then if you cut some stuff. And absolutely everyone is standing around with golden shovels waiting for the photo op…

    So what do you do? Smile sweetly and pay. And pay. And pay.

    It is a lot harder than people think to keep even modest projects anywhere near budget… that’s all I’m saying.

  3. Indeed cost overruns are a problem because there is a real negotiation asymmetry. Once the project is rolling you aren’t going to cancel it in almost any case. So contractors can really play hardball since the only thing they are in danger of losing the work to is competitors. You cannot get up and walk away any longer.

    On top of that the politicians likely placed some restrictions on who exactly you can hire so you might only have one or two options.

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