Hillcrest, I'm talking about from the very begining! WHY would someone spend the money and time on somthing they do not even own?

mincy21, why do volunteers come out at so many railway museums across the country, and spend their precious time (spending their own money to do so) for no compensation, week after week??? It's not far different from the Sandberg group and 261. Was NRM going to sell them the engine back in 1991 (or so)? I doubt it; they did their thing, sucessfully (wildly sucessfully!!) for many years, and I'm sure that was justification enough for them, until they faced the expensive 1472-day work.

The organization and cars, the people, the skills and the credibility-with-railroads are THE assets here; 261 is cold steel and will go back to the dead line at Green Bay and be no more than nice memories, while the Sandberg group imparts life and fame to another (as yet unknown) steam locomotive.

Howard P.

Mincy -

I think you have posted a legitimate question. Why Milwuakee Road 261 and under the terms that were agreed to? Well, I think that one big reason, is that there was a history of the Milwaukee Road in the Sandberg family. I believe Steve's grandfather was a locomotive engineer for the Milwaukee. Perhaps others. But now that Steve has established a working organization, and has run the Milwaukee Road 4-8-4 successfully, then perhaps that portion of their effort has been satisfied, and an alternative locomotive, under more favorable terms, might now be in order.

Les

Yes,there was (is) a Milwaukee Road connection, Steve's Grandfather was a Milw. Engineer and ran the 261 when it was in service...how cool is that? But guys,it's not the family connection or the original lease agreement that is under discussion here, it's the new one that takes effect in 2011.
Whats being debated by the museum and the FO261 group is the terms of the "New" lease agreement that would begin after the very large expenditure in time and money for the 1472 day inspection and subsequent overhaul of the locomotive. If the terms were workable for the non-profit group to continue operating, I'm sure they would agree to it, without question, but to have a monthly payment to make that is substantially larger than in the initial contract and must be paid whether they operate or not...You have to ask,in this economy who in their right mind would agree to that?

Oh, and the 1.8 million dollar price tag? Sure...and my Aunt has a Beenie baby in the closet of her apartment thats worth $26,000....to her.

Cheers,Dave
BTW, I do agree that the 261 should be returned to the museum and the friends of 261 should move forward. My vote is also for a CB&Q Hudson....Oh Yeah!

Many valid points. As I get the whole picture the important long term historical 261 ties to the Sandberg family is the only reason they've continued to try and work out a reasonable deal with the NRM vs. sending the 261 back to the dead line. If it weren't for that emotional connection my guess is that the 261 would already be back in Green Bay growing rust with the rest of her stuffed&mounted sisters!!

I also agree that the reported asking price of $ 1.8 million is pure fantasy. Based on the railroading realities of today any mainline sized steam locomotive is basically only worth what it will bring in cash from the scrap dealer. At todays scrap prices the 261 would fetch somewhere around $ 75,000 where is, as is....not much more!!

I'm also sure that this whole experience has forever altered Steve Sandbergs opinion of the wisdom of investing heavily ( both cash and TLC ) in something one doesn't "own"!!

I would respectfully ask that those who feel strongly that it is in the long term best interests of the NRM that they do what's needed to keep the 261 active and part of the Sandberg's operation communicate same to the NRM as I have done. Perhaps if they hear from enough of us it will have some influence on their decision?? Just as FYI I sent a hard copy of my open letter and a donation snail-mail.

Time will tell!!

Ross Rowland

If the Sandbergs invested money in the locomotive while only having temporary title to it, that was their judgment call. From what I understand, the museum is within their rights to reset the lease price now, and Sandbergs are free to take it or leave it. And if they decline, the possession of the locomotive, with all of its improvements made by Sandbergs, reverts back to the museum. Considering how much the Sandbergs invested in the locomotive improvements, perhaps the lease agreement could have been better structured to address these matters.

The only question I have is this: Why is the museum willing to kill the operation of #261 by raising the lease price? From all accounts, it appears that they would lose money by doing that, and they have a fiduciary responsibility to produce income.

I can only see three answers to my question:

1) The museum wants to maximize their income by raising the lease price as high as possible, and they are simply negotiating, and looking for the breaking point where Sandbergs will say no. Then they will lower their price and re-offer, knowing that Sandbergs are not going to immediately go elsewhere after having invested so much of their money in #261.

2) The museum does not realize that if the Sandberg lease is terminated and the locomotive is returned to the museum, it will produce less revenue for the museum than it would if the Sandbergs continued operating it under lease.

3) The museum does realize the premise of item #2, however, the locomotive has become so attractive to them on account of the Sandberg improvements and the popular public reception during operation, that their fiduciary responsibility has been overcome by emotion, ego, and personality traits.

Actually, the reasons for trying to hang onto the 261 have little to do with the emotional part. They have mostly, maybe everything, to do with the fact that 261 is the name of the organization and has national recognition. Also to do with the fact that this engine is recognized by class one host railroads, and that starting over with another engine is a much more expensive proposition than a simple boiler inspection and some driver work. In other words, it's a working and running engine that is a known entity. You don't walk away from that lightly. But when the price of keeping it becomes too high, there comes a time when walking away and starting over, or not starting over, are the only two reasonable options.
Mark D.

Mark,
When I talk about emotionalism, I am referring to the museum, not the Sandberg group. In other words, the museum may have acquired an exaggerated sense of the engine’s value for display, sale to others, or lease to others simply because of being exposed to the glory that has been achieved by the engine from the restoration and operation by the Sandberg group. For instance, if the museum believes that the engine is worth over a million dollars, they may intend to sell it for that. Or they may just believe that if they take it back and make it a centerpiece display, all of that glory of the operating #261 that they have witnessed will just transfer over to their museum and the display.

This thread is problematic in that, as with much of the information available on the internet, only a portion of it is verifiable as fact, and as more and more discussion is continued, that information sort of evolves into truth. I thank all of you who wnat to help see the continued operation of the 261. I also caution that these discussions are around only part of the negotiations and the the lease and issues going forward involve more than just what has been discussed thus far. As Ross put it a few threads back when someone brought up the Greenbrier excursions, "Loose Lips Sink Ships" referencing the warning from during WWII. Negotiations generally are done best in private, rather than in the media and I hope that we can continue to respect that.

There are very valid business reasons why the 261 group would rebuild a leased locomotive back in 1992, and many of them are still valid. today. The basic ones are the unknowns in the building of a new business, and the potential of quick and drastic winds of change in the excursion industry. Leasing the 261 instead of purchasing freed up the capital to do the rebuilding, and also helped the museum by giving back to it a regular source of income for the length of the lease, plus they would continue to own and preserve the original artifact. Virtually all of us who are active in this steam excursion industry do so out of our love and passion for it, so it makes sense that we also want to help museums be successful in fulfilling their mission statements. As I understand it, the Mission statement of the National Railroad museum reads:
"The mission of the national Railroad Museum is to collect and preserve the equipment, artifacts and historical material associated with U.S. railroading. Through educational, innovative and entertaining methods, the Museum will exhibit, display and interpret the history and significance of U.S. railroading."
It was certainly agreed back in 1992 that the 261 operations were a great way to help fulfill that mission statement, and that it was a win-win situation for both parties involved. The winds of change did blow through the industry quickly, with the huge insurance rate increases, the risk management factors that the Dismal Swamp derailment brought to light, and the increased business on the railroad, causing the demise of several excursion operators. If that had also happened to the 261 group, at least the locomotive would have then gone back to the museum to be preserved, instead of having to be sold to try to recoup some of the original capital put into its purchase.

One more FYI. The current negotiating team for the mueum told us right up front well over a year ago that they agreed that it was in the best interests of the museum and the 261 locomotive that it continue to operate, and that the Friends of the 261 were the best organization to accomplish that. We are still trying to make that happen.

I have no idea where the 1.8 million purchase price came from. there was a brief discussion about how to go about arriving at a market price if the locomotive were to be sold, but since we still felt a lease was the better option for both parties, firm figures were never established.

Ed Selinsky

In the broad sense I concur with Ed Selinski that these matters are best done privately between the parties directly involved.

I chimed in after this issue had become very much in the public domain and I too hope it ends well for all concerned.

As to the "value" of the 261 that's certainly a subjective question. It is my understanding that RDG. 2100 will be put on the auction block soon to repay some of the liens held against the locomotive by the major creditor of the ill-fated Golden Pacific operation. Should that happen the results will be at least a ballpark benchmark of the market value of these machines. Yes there are certainly differences between the 261 and the 2100 but those are relatively subtle and of little importance to what either will fetch in the free market. I for one will be VERY surprised if the 2100 brings anything above scrap value.

Time will tell.

Ross Rowland

Actually, Ron, I never saw your post until after I had posted mine. I was composing it when you posted.
I was going back a few posts where the discussion turned to Steve's grandfather. That's cool, but that's all it is.

Mark D.

Not to hi-jack this thread, but.....

Should Ross Rowland's guess-timate be correct, will there be somebody there to purchase 2100 rather than to let her become scrap? Scrap price shouldn't be too prohibitive for a serious conservator to raise. I would hope that a large portion of the value of 2100 would be that she's a steam locomotive and historically definitive. I would hope that if someone shows up with the yen (yuan) to purchase her, the first bidder gets preference. I don't believe that four surviving 2100 class 4-8-4's is too many.

Now, back to our regularly scheduled feeding frenzy.

The biggest portion of the value of 2100 is what someone's willing to pay (or offer in trade, tax write-offs, etc.) for that locomotive as is, where is, on the day it is sold. No more, no less.

Now, what about either a non-serious conservator or a serious non-conservator? Think, just as crazy speculation, Grand Canyon, SL&RG, Jerry Jacobson, or Andrew Muller.......

not to jump topics, but in my humble opinion 2100 belongs either at RRMoP or with the RCT&HS. I don't know if either of those organizations has the capital to purchase the engine at any price, unfortunately.

There's a rumor going around that Steve Sandberg might be in the market for a new engine soon...

(Sorry, couldn't resist!)