One problem is that the profit from the railroad operation would most likely be considered unrelated business income and subject to taxing (UBIT). If your business is being a museum then switching cars for industries would be unrelated.

Similarly one example when this concept hit the non-profit world about 25 years ago one example was the non-profit hospital having excess capacity in its laundry operation and it taking in the laundry work for the motel across the street or across town. This was a big concern also to the Museum Store Association as it could affect the type of items that were sold -- if you were a natural history museum, Thomas the Tank Engine toys might be unrelated to the scope of the museum.

So you pay the taxes on the unrelated income and plow the rest back. What's the problem? Hypothetical in this case so far anyhow.....

This is certainly not new territory. TVRM and RMNE both have wholly owned for-profit subsidiaries that operate common carrier operations (I am sure there are others). In the case of TVRM I believe it supplies a substantial amount of revenue to the operation.

Let me add to a few of the points that Les mentioned above. The Town of North Judson is the owner of the entire rail corridor and the CKIN is the shortline operator.

Let me explain how we operate:

HVRM primarily runs over a section of track between North Judson and LaCrosse. Once per week during the tourist season (May thru October), we run our excursion train to LaCrosse, where we wye our locomotive and run around the train for the return trip to North Judson.

Once per year, we operate a train from North Judson to Thomaston, Indiana (a lengthened LaCrosse excursion over former Pere Marquette trackage). In the past, we have operated excursions between Hanna and Thomston as part of Hanna's town festival, but those excursions ceased several years ago (not by our choice).

Virtually all excursions take place on Saturdays, except for school trips, which typically operate during the week and only between North Judson and English Lake.

HVRM has operating rights granted to them via a contract between the Town of North Judson and the Indiana Department of Transportation (who supplied the majority of the funds to acquire the line back in 2004). The museum is not signatory to the contract because we are not a municipality or other government agency and could not receive funding through the grant awarding process.

However, in the original TE application process to acquire the line, HVRM was extensively involved. HVRM Secretary Mark Knebel was given permission by a consortium of agency representatives, shippers, politicians and others to pursue the TE grant application to acquire the line, with the Town of North Judson as the Initiating Agency.

That, Gentlemen, is why I am able to support a family. However every once in a while even I need some help:


I'll bite. If you are not a party to the contract granting you operating rights, how did you aquire them and who from? Please do not tell me that it is based on a handshake with the Mayor's cousin.

GME

I am very pleased to see the input of my old friend Trainlawyer here on this thread!

Seems like many tourist railroads and museums are under attack these days. Nothing like owning your own track and setting your own destiny. Leases, shared agreements, handshake deals, they can all fall apart quickly.

Here's hoping for an equitable outcome for all parties and the resumption of excursions.

-otto-

East Troy Trolley museum has a few freight clients and they service them, perhaps even using an electric engine. That's doable for a museum, HVRM probably wants to focus on the museum operations IE "we have regular lives like other people"

I don't know who controls the signing deal for the operating contract, but to me all parties need to have stronger communications. NICTD own the south shore track but SouthShore Freight works the freight and thats a tight deal for cooperation.

Sounds like to me there needs to be a meeting of the minds of all parties, city, operator, HVRM.

If the freight operator with the expired agreement, contract, or lease is a Common Carrier, it may be able to argue that the Surface Transportation Board has not given it permission to discontinue operations. So far, I haven't read that anyone else is ready and has approvals or exemptions to take over the freight business. which could be a reason for the S.T.B. to order the present parties to extend the expired agreement until a new order is issued.
This reminds me of some of the long ago disagreements on the New Hope & Ivyland RR. in Pennsylvania.
While the next examples were before there was a Surface Transportation Board, the owners of the Providence & Worcester had a hard time getting rid of PennCentral's operations on their property after the 99 year lease expired. In New England, the owners of the Norwich & Worcester were emboldened to also try to get rid of PennCentral and take back operation of their property, but the Interstate Commerce Commission ordered that Providence & Worcester take it over!

Otto says;

"Seems like many tourist railroads and museums are under attack these days."

Really...? I have not heard too much of that in the news.

This unfortunate misunderstanding (I am not taking any "sides" in this, I do not know, or really care about the details) does not seem at first blush to be an "attack" against a tourist railroad and/or museum. Seems like everybody looking out for their own best interests, pretty common human behavior really.

Otto also wrote;

"Nothing like owning your own track and setting your own destiny"

Otto, you should be reminded that the much of the track you operate on is installed on an easement granted/negotiated years ago with a State Agency. If some one in power in the State Capital decides that they would like to rip up "your" tracks and put in windmills (or solar panels, or unicorn farms) you will likely have little power to stop them. Yes, "you" (actually a long line of generous volunteers dating back a few decades, and not Otto himself) "own" the rails, ties, spikes, etc, but Otto and the museum he represents does not "own" most of the land in question.

I would bet that in the fine print buried in the original easement from the state is some kind of "state declared emergency" clause that gives the state a "get out of the deal" card. All they have to do is declare that a plague of locusts is descending and then they can thereby cancel all easements granted on state lands. Of course, I certainly hope that never happens.

Again, Otto wrote;

"Leases, shared agreements, handshake deals, they can all fall apart quickly."

Well, we find something to agree on. Include in that negotiated easements that involve state government agencies.

I wish the fine folks in Judson all the best, do not do anything rash.

Cheers, Kevin

----------------------------


Kevin,

You likely won't hear it in the news, but Otto is correct; we have a potentially damaging trend on our hands. Let's consider the following:

1) HVRM - the topic of this post

2) Adirondack Railroad west of Lake Jct - NIMBY's and the government are going after active rail lines to build trails at the expense of rails

3) Catskill RR (Kingston) - Activists and government aligned to build trails at the expense of rails

4) Stillwater, MN - NIMBYs shut down tourist train

5) Milford, NJ - A fresh one on Facebook this week as NIMBYs question the ownership of land next to the ROW

6) New Hope, PA - History of NIMBY complaints about smoke and noise

I am sure the list goes on - remember Vermont's issues with Steamtown for smoke offenses in the 1970's ?

The lesson, as always, is that if you think you are doing something worthwhile, you must always be ready to defend and protect it. That's part of the genius behind the Strasburg Rail Road's support of the Farmland Trust: http://www.strasburgrailroad.com/farmland-preservation/

If we aren't careful, it will be steam locomotives (not old cars) that are sung about in future versions of RUSH's classic warning "Red Barchetta" https://www.youtube.com/watch?v=PjjNvjURS-s

Rob

PS: FWIW, "Red Barchetta" was part of my awakening to the power of industrial preservation... one of many lessons deep within Mr. Peart's lyrics.

One other thought before turning to other things tonight...

My one visit (thus far) to the HVRM was for the #765 photo freight a number of years back. I found the museum and the folks running it to be top notch. These are people dedicated to preservation of the railroad scene (freight cars, buildings, etc...).

North Judson is a neat little town, like many across the midwest. It's railroad history makes it unique, but it is the HVRM that makes it worth a visit.

I never cease to be amazed at municipalities that underestimate the power of heritage railroads. A simple question Les and the gang could ask their counterparts in North Judson is this: what is it about Wayne Township, Indiana that would prompt a father and son to drive out from New Jersey to spend a weekend in the North Judson area?

I will give some hints.

It's not the great people of Wayne Township (of which I am sure there are many). It's not the abandoned railroads through town (that's neat, but not worth a couple of thousand miles behind the wheel). It's not the scenery (though it is a very scenic location, it is representative of many areas in Indiana).

The answer? It is the HVRM and the wonderful work they are doing. Wayne Township has no better calling card than the museum.

Of course, that's just my opinion. YMMV.

Rob

Rob wrote;

"You likely won't hear it in the news, but Otto is correct; we have a potentially damaging trend on our hands."

Well, it may not have come to many person's attention, but the economic environment is very tough lately. Nobody wants anything "next door" that degrades their "quality of life", but they also want "fun things to do" close by. One of those conundrums.

And many many folks have no interest in "that old rusty railroad track running through town". Just realities that have been going on for decades.

My father was with the NYCRR as a fireman/engineer in steam days (40's/50's), many of the bigger cities (Niagara Falls NY for example) had a policeman assigned to follow the trains as they entered city limits with an "opacity card" (a cardboard contraption with different densities of black and white film enclosed) that he used to "measure" the quality of the smoke emitted from the steam locomotive. This local policeman was empowered to flag down the train and issue the equivalent of a traffic ticket to the operating personnel if the smoke from the engine was "too" dirty. My father learned exactly what his patrol car looked like and where he waited. My dad learned to keep the exhaust nice and clean whenever that patrol car was around.

These are not all new challenges, but not easy to overcome either.

Best of luck to everyone. Cheers, Kevin.

The economy is what is. It cycles, and different folks have different experiences through the cycles. For the most part, the economy has nothing to do with the situations I have listed. It is not an excuse nor a reason to move against heritage rail.

Rob

Placerville & Sacramento Valley RR:

https://www.facebook.com/psvrr/photos/a ... =3&theater

The INDOT agreement with the Town specifically states (in part):

"Purchase of the property from CSX will help to maintain a rail corridor for railway excursions from the transportation museum." It further states, "Additional freight activities will not be allowed to operate to the detriment of the historical railway museum located in North Judson and its railway excursions." Additionally, it says, "Any income derived from the use of the tracks purchased under this agreement shall be used for maintenance and operation of the tracks and to the benefit of the transportation railroad museum."