CHICAGO – The public body overseeing construction of a new Minnesota Vikings professional football stadium approved an agreement with the team and developer that caps the construction costs at $763 million.

The Minnesota Sports Facilities Authority and the Minnesota Vikings Nov. 22 announced the agreement on a construction management plan with Mortenson Construction. A ceremonial groundbreaking is set for early December.

The agreement clears the path for the state to issue state appropriation-backed bonds to raise funds to cover the public’s $498 million share. Minnesota expects to enter the market in January with at least the first tranche of borrowing for the project. The state needed the construction contract in place before borrowing for the project.

The construction costs were capped at $763 million although the overall price tag including land acquisition, infrastructure improvements, and other expenses brings the total to $975 million. The stadium is expected to be completed during the summer of 2016.

The team committed to a letter of credit valued at $26.4 million, up from a previous commitment of $13.1 million, for construction contingencies. The team is responsible for $477 million of the overall package. The team will also forgo $15 million it had expected as compensation for playing the next two seasons at the University of Minnesota’s stadium. The money instead will go into the stadium construction fund.

“Reaching this major milestone with Mortenson today is a significant move forward; signing this GMP means we can order steel on Monday and construction begins,” MSFA Chair Michele Kelm-Helgen said in a statement Friday. “The Vikings have provided the construction project with a $26.4 million letter of credit that allows the building to keep major design features intact so Minnesota will have one of the most iconic stadiums in the nation.

The state will cover $250 million and Minneapolis another $150 million.

Minnesota has picked RBC Capital Markets to run the books with JPMorgan and Wells Fargo Securities serving as co-senior managers. Another five firms — Piper Jaffray & Co., Morgan Stanley, Citi, Cronin & Co. Inc., and Loop Capital Markets LLC — round out the underwriting syndicate as co-managers.

Public Financial Management Inc. is financial advisor and Kutak Rock is bond counsel on the Vikings issues.

The state carries appropriation-backed ratings of AA from Fitch Ratings and Standard & Poor’s. The 65,000-seat stadium is expected to be completed in time for the start of the 2016 season. It’s being built adjacent to the team’s current home, the 31-year-old Hubert H. Humphrey Metrodome.

The state originally intended to repay its share of the bonding with increased revenues from an expansion of charitable gambling. Revenues have fallen short, so the state will set aside funds from a cigarette tax increase and corporate tax changes approved earlier this year.

Minneapolis will repay its $150 million share beginning in 2021 by redirecting a portion of its existing 0.5% convention sales taxes and hospitality taxes.

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