Found this post by Matt Carlson at Railroad Forums.

http://www.railroadforums.com/forum/sho ... p?p=254520

If it is from Steve Sandburg it sheds some light on the reason the lease fell apart. Mostly I think over the NRM getting 261 back after 10 years.
Essentially payment in kind to the Museum of around $150,000, in addition to the $250,000 lease amount over 10 years.

Portion below...

News Release
Contact: Steve Sandberg
Friends of the 261 to return Milwaukee Road 261 to National Railroad Museum

”After ten years we would have to give the locomotive back with 33 percent of its service life still left. It’s hard to amortize the cost of a 15-year boiler overhaul in a ten-year time frame. We just could not economically justify spending $400,000 to $600,000 on an overhaul, plus paying a substantially increased lease payment, for only a ten-year lease term.”

Buzz,
Thanks for the link to the WLUK page with their story. I found the statement from Mr. Lettenberger in which he stated that money was not the motivating factor in the museum's decision to be very strange. I have cut and pasted directly from the story.


The museum argues the amount is fair and long overdue --- but Lettenberger said money is not the motivating factor.

"For us, it has been more so important to have it out there and have it as an educational tool." said Lettenberger.


Mr. Lettenberger, if you read any of this forum, could you explain your statement? It makes absolutely no sense to attempt to say that NRM wanted more money (which you were offered - double the original lease agreement) and then that money was not the motiviational factor but that NRM wanted to see the locomotive continue to operate. I certainly hope that the WLUK reporter made a mistake in his story and inserted the word "not" in the first posted sentence by mistake. Otherwise, the two statements are conflicting in nature. FO 261 has a great record operating the locomotive so if NRM truly wanted to see it continue to operate and money was not a motivating factor, why not accept the $20,000 offer with a 15 year instead of a 10 year lease? That seems simple enough. Or could you please explain what the actual motivating factor was? Thank you.

Don C.

If one analyzes the conduct (what I know of it, anyway) of the museum in this instance it becomes even less explicable. I know factually, that the Friends have been trying to get a new lease agreement for the locomotive for four (4) years, without any success. The museum seems almost clueless in their understanding of what it is, exactly, that they have in 261.

They have a non-operational steam locomotive which will be returned to them in pretty much the same shape it was delivered to Northstar/The Friends/Sandberg back in what? 1992?

The value of the locomotive at present is scrap steel value. The hundreds of thousands of dollars invested in the locomotive, the tens of thousands of volunteer man hours invested in its restoration, care and feeding? They don't come back to NRM with the locomotive.

The ability to operate on and cooperate with BN, CPR and the Minnesota shortlines? That doesn't attach to the locomotive either. It'll attach to the NEXT locomotive that Steve and company operate.

The parts borrowed from 265 to get the 261 up and running? They go back to IRM. And I'm cheerfully willing to bet that the IRM won't loan them to you. Remember the mechanical lubricators the locomotive didn't have when delivered to the FO261 folks? They aren't yours either, and there's no reason to return them to you, since the locomotive didn't have them when delivered.

Got a fresh set of flues kicking around that'll fit the 261? No, I didn't think so. At least one of the boiler check valves is a loaner and won't come back to NRM with the locomotive. And I'm sure you can probably find a dynamo that can be overhauled and made to work. The one on the locomotive isn't yours, and I'm willing to be you'll be getting the original back, the one that was corroded beyond all possibility of overhaul.

Oh...and while we're at it, consider the tender trucks. You cannot imagine how surprised the FO261 folks were when they discovered that the roller bearings were long gone and that the tender was rolling on temporary friction bearings that weren't road worthy. The Friends bought roller bearings to install under the tender to make all that they did these past fifteen years possible. I hope they don't make a gift of them to you. I think it'd be appropriate for them to sell them to you, if you want them. Say for the original selling price, plus 4% per year compounded? Sounds awfully fair to me, don't you think?

If you have another "operator" waiting in the wings with deep pockets, I'm wondering if that operator has the remotest clue how much its going to cost him to restore the locomotive to opeation? Sandberg's estimate had to be based upon the idea that all the borrowed and purchased parts would be a part of the restoration. What will it cost you, oh future operator, to restore it without them? No...I don't want to think about that either.

Got enough rolling stock to put together a nice train of say, 750 capacity, maybe a bit more? No? Planning on leasing them from Sandberg? I'm sure he'll have other, more appropriate uses for them.

It is my opinion that the museum has just killed the 261 as effectively as if they took a cutting torch to it. And I find that sad. I know Steve and his family, and the incredible group of volunteers that made 261 possible. And I have every confidence that in a couple of years, a big, beautifully restored steam locomotive will roll out of Harrison Street with Steve at the throttle.

And it won't be 261.

Doug

Boy, Doug's post sums up the situation to a "T." Great post!

Clear as a bell at least to me. How how about to the wizzards at NRM. Where are they coming from? I wonder.

I'll concede I'm not the brightest fellow on the planet. What is it about their current position am I missing? Based on their recent behavior they have to have a rational and viable plan for the 261 when she comes back other than to stick her back in the pole barn in Green Bay along with the other rusting hulks. Is that their end-game? Surely it couldn't be. That would be ludicrous and would totally violate their fiduciary responsibility to their Museum.

What am I missing here? Can NRM be that thoroughly out of touch with reality?

Surely someone in high position at NRM has been monitoring the various threads concerning 261 here on RyPN. Heck, they started the first thread that got the 261 discussion going by posting the letter to Jim Wrinn that ended up on Trainwire. They certainly now know how the general rail historian "community" feels about this debacle. But as far as I can tell they haven't responded in any clear way to all the comments. Maybe it's because they can't see any way to justify their stupidity?

I live in the Twin Cities area but haven't been a member of the Friends of 261 because I am primarily a traction fan. I have enjoyed several 261 excursions over the years. But now I will be joining the Friends of... and will gladly donate what I can so we can see, hear, feel, smell mainline steam in the Twin Cities.

Milwaukee Road No. 261: Sic transit gloria mundi. Now it's on to a fresh start.

Thanks!

Most of us have been part of (or witness to) a negotiation where one party thinks they have the other side by the b****. Sometimes they do, but many times that second party says thank you for your time and walks out. To me, that is what we have witnessed with 261.

I truly doubt that the museum people read railroad forums. If they did, they would probably have a bit more working knowledge of operating steam locomotives on todays railroads than they apparently do have.

And no, I doubt that if they did read Doug's post above that they would comprehend what it means. It contains little in the way of monetary income to the museum, and that is by all acounts, except for one comment from them, the only factor that concerns them.

There is a very old phrase that aptly decribes what the IRM has done.
It is called killing the goose that lays the golden egg.
Mark D.

Me thinks that Dougs post hits the nail squarely on the head.

As I previously posted I went through a very similar situation with NKP 759 in 1973 with an equally out of touch BOD at the original Steamtown in Vermont. We too returned their engine to them rather than submit to economic stupidity and that was essentially the end of 759's active carreer.

The chances of the NRM finding another mainline operator who has the financial wherewithall AND the other critical prerequisits ( Amtrak approved coaches, professional relationships with the carriers, substantial TRAINED volunteer crew base etc.,etc.) to replace Steve's proven team is far less than zero. It's non existent!!!

Now, the NRM will have another hulk to add to the barnfull already there and zero annual income and no good will ambassador making lots of people aware that they even exist.

For Steve and his very able team I'm sure on reflection that it will be viewed as a major blessing in disguise. Life is far too short to keep dealing with ignorance if given the choice to end it!!

Just as information I did as I previously posted and sent the NRM a polite personal letter on this issue accompanied by a cash donation. To date I have not recieved a reply nor a thank you. Guess they've got their head on crooked in more than one department!!

Sad but true!

Ross Rowland

MarkD:

It is "NRM" not "IRM".
IRM is the good guy!

It very much sounds like the folks at NRM will wind up with a situation much like that of Frisco #1522 when it was leased out of MOT. That assumes they get the locomotive operational and offer it up. Then what they will have is the same "loco for hire" situation that was the case with #1522, and it was a situation doomed to eventual failure (my opinion). Why, because you have nothing to haul behind it, crew cars at best. Picture the group which approaches them and asks about the possibilty of running a trip. This group will be told what the price is, and that they have to find cars to use for their passengers, arrange to have them brought to the starting point at their expense from several places, shipped back afterwards, again at their expense, and also pay for the use of them on the trip or trips, pay for insurance and any repairs needed as a result of their use. In addition they have to get the involved railroads to approve the trip and deadhead movements involved, figure out their total costs and then price the trip. Oh, and the cost for using the locomotive should be high enough to bank funds for its eventual next overhaul. This is exactly what happened to almost all those which asked about the use of #1522, except that there were a number of privately owned passenger cars available in the St. Louis area to get them started. Most approaches ended quickly after these facts were explained unless it was from BNSF which could provide the cars and operate the trip for themselves. The business model used by #261, where they provided the entire train, was far superior and it worked for a long time. The other one just won't work for most groups. A "loco for hire" won't be hired unless it has a train to go along with it.

Sorry, I know the difference well. It was a bit of a brain f*rt. I won't go edit a correction since it's gone this far already. Thanks for bringing it up.
Mark D.

Mark D.
If you edit it, I will remove my post and future generations will never know,,,,,,,

It has been stated in another forum by a source I trust that Fo261 did offer NRM $20K per year but for the full 15 years of the boiler overhaul life. This is what NRM turned down! Good riddance to NRM.

Steve

I owe the folks at the NRM an apology.

My post above of 11/21 was incorrect.

In the pile of mail I found upon returning from my recent 8 day roundtrip from Syracuse NY to LosAngeles via Amtrak were 2 letters from the NRM. They did acknowledge my contribution and restate their position regarding the 261 matter. I was too hasty in my admonishment and for that I apologize.

I continue to believe strongly that they will come to regret their decision, but that's just my opinion.

Ross Rowland

Well, can you share the basic information contained in their letters? Or are they making threats to you if you do?
I surely did not see anything incorrect in the letter you posted on the internet, and assuming that's the letter you sent to the museum, I think that many of us would like to know what the other side of the story is.
If it has anything to do with this mysterious other potential operator, all I can say is good luck.
Mark D.

Regarding the collapse of negotiations for the proposed new lease of #261, I have heard the explanation of FO261’s position, and the explanation of NRM’s position. To my perception, the FO261’s position makes sense and sounds entirely logical, whereas the position of NRM does not sound logical. Of course, it is their engine, and they are within their rights to set the terms of a lease. I won’t accuse them of any particular motive, but their actions are typical of what one would expect from an organization that had an unrealistic perception of the worth of #261. I noticed that in a couple of different comments from NRM, they seemed to be suggesting that the price charged for the first lease of #261 was too low.

Last year, my city abruptly doubled the sewer / water bill. When I asked how they could justify a 100% increase, they told me that they hired a consultant who determined that the bill had been too low for the last 20 years. I told them that when a resident pays the bill, they expect the debt to be settled at that point. They do not expect that the city is billing less than what they feel they are owed, and that they will hold the customer responsible for catching up some time in the future. The city would not see my point. They take what they think they need.

In the case of NRM, there may be a blurring between what their locomotive was worth when they gave it to the Sandberg group and what they felt it was worth after the group refurbished it and placed it in operation. It was NRM’s locomotive at both stages, and it just may not be apparent to them what had to go into their engine to make it perform. You would think that this could be explained to them in plain dollars and cents terms, but such terms cannot be explained to my city about the water / sewer billing, so explanations do not always work.

I wonder what is going to be the reaction of NRM when they get their locomotive back without tubes, roller bearings, and other accessory items after witnessing it in its perfected operating condition. I wonder if that can be explained to them.