Has anyone out there had an appraisal or other valuation done of your organization's collection of railway cars and locomotives, either for insurance purposes, or for use towards the local match in a grant application?

I'm looking to compare notes with others who have either hired an appraiser or have otherwise worked on establishing "fair market values" or other indicators on museum railcar collections.

From a valuation/appraisal standpoint, it appears to be an unusual "market"; relatively speaking, there's not a lot of market activity (compared to let's say antique automobiles) and thus not that many comparative sales. I realize there are certainly plenty of sales of used railway equipment, but these are not usually the type of historic equipment found in museums.

Appraisals of historic aircraft or ships may provide an appropriate parallel, and I'm also seeking to talk with people from those fields. Please feel free to contact me off line if you prefer.

Thanks!



Railway Preservation Resources
jsmatlak@earthlink.net

John, some museum artifacts are valued at replacement cost rather than fair market value. For insurance purposes this is an effective strategy. That 1882 wooden coach isn't worth much as a railroad car but is worth $750,000 of materials and craftsmanship to replicate.

Lately I have been offered fair market value as "what I have in it" from the hapless owner of a 65 tonner with two frozen blocks and unknown electrical components and a smashed cab with other miscellaneous vandalism. Sorry, but your unwise investment doesn't guarantee equal return. Scrap value would be more reasonable for that one.

"Fair market value" won't necesarily repay the cost of all that expensive restoration work either. That park hulk that was made operable with $750,000 invested might only fetch $200,000 from a willing buyer in open auction. These things must repay their investment through use.

Uniqueness isn't necessarily a good thing either. It may be the last whatever, but only worth anything beyong salvage value to the one impoverished museum dedicated to interpreting the history of the line it ran on. More generic stock with a broader market base will have higher value.

So John,no easy answers on this one. The appraisal must be done for a specific purpose such as insurance, maximizing deductibility for a donor, evaluating collections, etc. Good luck.

Dave



irondave@bellsouth.net

If you really want some fun with guidelines.....

As I recall, the PRR rolling stock collection at the RR Museum of Pa. was effectively "seized" from Penn Central for back taxes. Somehow, they had to get a fair appraisal on the value of the stock. I think the figure they somehow came up with was about $14 million towards a $60 million tax bill, or something. You might want to check with the RR Museum of Pa.'s archivists or curators for information on that appraisal.

lner4472@bcpl.net

Appraisals are regularly done by both museums and banks. Their purposes vary by the need for that appraisal. Museums quite often are appraising for value as part of a grant application or to establish a verifiable dollar match against a possible grant.

Banks usually want appraisals as part of a refinancing or new loan process. Depending on the financing focus they either want to know the "going concern" value or the "net liquidation value" (NLV). Our firm does both types for museums and tourist railroads.

Once in awhile we get a request to value an individual piece of equipment. This quite often is to establish an IRS value for sake of a donation to a not-for-profit.

Stone Consulting & Design
garyland@stoneconsulting.com

John,

On the maritime side of things, the scrap value is about all you will ever get. Ships have used up their entire ecconomic value before they get to be interesting to museums. Yachts are an exception to this rule.

The Conn Electric Railway Association sold an operational steam engine this past summer, but it has been indoors for many years and I say again operational.

Ted Miles

ted_miles@NPS.gov