The April Issue of "Sterling Rail Classifieds" contains the following (along with a pic of 261):

4-8-8, 1944 ALCO STEAM-POWERED LOCOMOTIVE

Built by the American Locomotive Company and rebuilt in 1993, and logged more than 25,000 miles under its own power.

Price: $225,000
Location: MN
Reference # FSL107

Phone: 210-493-3600

http://www.sterlingrail.com/547/class.php?id=107


Here are some numbers I put together to save everyone the extensive Google
search as well as a summary to save the calculations and what-ifs. I believe
my math is correct - the BASIC math, that is. Corrections welcome.

Original lease : $10,000.00 per year over 15 years = $150,000.00.

Last least offer : $20,000.00 per year over 10 years with 4%
annually compounding ((start at $20,800.00
and the last annual lease payment (10 years
into the future) would be $28,464.00)).
Keeping in mind that the $650,000.00 or so
investment in making her compliant again would
not be fully recovered by the end of the lease.
Total $240,115.00 (a mear 60% increase....)

Original purchase price offer: $800,000.00.

Latest slightly reduced offer
after the "Friends" declined
the offer : $225,000.00.


Previous basic expense: $800,000.00 (ball park restoration and lease)
(over 15 years) Assuming restoration of $650,000.00
$53,000.00 per year (basic)
Current with new lease: $840,000.00
(over 10 years) Assuming restoration of $650,000.00
$84,000.00 per year (basic)

Current with purchase : $875,000.00
(over 15 years but then no lease charges ever again!
knock off roughly $15,000 per year in lease /owner
ship expenses - or recoup in future sale).
$58,000 per year (basic)

Future with purchase : $43,000 per year (basic).

I feel the math is pretty accurate in it's most basic form but welcome corrections.
I'll assume the initial restoration was more expensive then the second but that the
second restoration would be equally high due to inflation 15 years later.

/Mitch

Looks like the museum killed the goose that laid the golden eggs.

Would someone wake me when this nightmare's over?

I guess the saddest part is we're all awake, and this isn't all just a bad dream.
Has to real though,, no way you could make all this up.

I don’t know by what math this worked out, but if you use the inflation calculator below to convert the original lease cost of $150,000 in 1993 dollars, into 2010 dollars, you get $225,914.
It’s supply and demand magic!

http://www.bls.gov/data/inflation_calculator.htm

I’m just not so sure the supply of rail fans to buy excursion tickets increases as well as inflation.

Would a fundraiser be the best solution to buy MILW 261 from Sterling Rail Classifieds?

But what would you do with it? Raising $225k wouldn't be that hard. There are plenty of well heeled folks that pay more than that for yachts, often two or three times that much. (Not me mind you, my "personal yacht" was made by Mistral and is of the "sailboard" class...) Heck, get a group of railfans together and each chip in 25k or so and you're the proud owner of the 261.

Then what? That's the real problem! Another comparision with boats and "hole in the water you pour money into" is what to do with this thing after you purchase it. What will it cost to move it? Where do you store it? What will it cost to restore? Where do you get coaches? Where will you operate it? How much is insurance?

Unless you're in the market for a really big flower planter, that $225k is just a downpayment on a much bigger bill... The term "White Elephant" comes to mind.

Past performance suggests that the locomotive can be successfully operated by the right organization, with the right business plan and the right rolling stock.

Its a shame that the original price ran that organization off.

The question is....

How much money did the museum pay to get the locomotive in the first place?

or was it donated from the railroad?

and, what is the depreciation value of an old Steam locomotive?

On the grounds of historical value you just can't put a money value on an old steam locomotive.

I believe the NRM needs to sell off the engine to release it from this burden.
At this point the "Friends" may be looking at a different lokie, but maybe in the future 261 may finds its way back to the rails.

You suppose it's a waiting game now? 261 is a bird-in-the-hand of sorts, sitting in the former FO261 facility. The price has dropped substantially since NRM offered it to the FO 261 group...maybe they should just bide their time and when/if no-one steps up to the plate to buy it, S.Sandberg and Co. throws in a bid....?

Stranger things have happened....Dave

That certainly seems like the logical outcome. Is there a more cost-effective option for the Sandberg group to acquire a large locomotive for mainline excursions? If so, what would that be?

Check out the asking prices for the small Heisler and 3 foot gage mogul. I'm not seriously suggesting there's a semblance of reality in any of this but it has been my experience that smaller, lighter power has a higher market value than big mainline power because it is more useful to more potential users. Few tourist lines or operating museums need a 4-8-4 capable of running 100 MPH, but many can use a nice little 15 MPH 65 ton something. Private collectors like even smaller stuff like the 3 footer.

Unless the museum finds the rare buyer who is making a purchase for another reason, a sale depends on a buyer who has the ability to put 261 to economically feasable use. Very few people are legitimate high speed mainline steam operators in this country today. I have no inside knowledge, but IF Mr Sandberg is interested in 261 despite all the BS, he has nothing to lose by biding his time until he can acquire it at minimal cost. There are other possibilities out there he's mentioned without going into detail before, and there's no hurry from his perspective in this economy.

If I were the museum and I was broke, I'd hang onto 261 and sell off a couple little engines instead.

dave

Interesting you should mention other things on NRM's de-accessions list. I just finished reading the latest issue of The SOO, the magazine of the Soo Line Historical & Technical Society. In it is an article about the new preserved caboose display at Stone Lake, WI. The caboose, Soo 593, IIRC (don't have the article in front of me), ex DSS&A 593, ex PS&N, came from NRM. The article recounts how, when the local historical society went looking for a caboose, they found a couple offered for around $20k, and the one from NRM at $15k, "recently reduced from $20,000" to quote the article. A couple months later, after the group got quotes for moving a caboose, track, etc. and decided to contact the various caboose owners to negotiate price, NRM called them, stating the had a BOD meeting coming up, and soliciting a bid. Since the group had only raised $5000 at this point, that's all they offered, which NRM accepted.

The group is very happy with their new caboose, which they painted and lettered last summer, and I'm very happy for them, but it seems that either NRM is exceedingly altruistic, or rather desperate for cash.

There's a deaccession list? All I heard about was 261.

dave

Dave,

We discussed this a while back:

http://server.rypn.org/forums/viewtopic.php?f=1&t=25166&st=0&sk=t&sd=a&hilit=national+railroad+museum+green+bay

I don't see the Soo Line caboose on the list that was posted, but who knows, maybe it's all for sale? Make an offer!