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Mediation News

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The dispute regarding the Minnesota Vikings’ new stadium and who should pay for the cost of construction is headed to mediation. The Minnesota Sports Facilities Association (MSFA) claim the costs were part of the bid proposal from the M.A. Mortenson Company, but the company claims they were not.

 

Duane Benson, former MSFA treasurer resigned on August 1st, but said there was a growing problem within the project that the public was to date unaware of. He estimated it could potentially cost an additional $35 to $50 million to complete the stadium.

 

Mortenson filed to have a mediator decide at least $15 million in costs and also filed for the right to proceed with arbitration if mediation was unsuccessful. According to Mortenson, mediation and arbitration were both specific in the initial contract and expect these common measures to be used to resolve the dispute.

 

The company stated there has been continued willingness to discuss the financial issue, but they have been unable to reach an agreement.

 

In 2013, Mortenson enter into a Construction Services Agreement with MSFA and in accordance with the Minnesota legislative statute, agreed to a Guaranteed Maximum Price. This ensured any cost disputes would be the responsibility of Mortenson. The stadium project also has a contingency budget of nearly $30 million.

 

Mortenson prefers to go directly to arbitration to resolve the issue, but must first attempt mediation – something they believe is unlikely to resolve the issue.

 

The good news is the stadium project is going to be completed, regardless of the outcome of mediation or arbitration. The bad news is everyone involved could be frustrated and disillusioned by the time the gates open.