Memorandum

Memorandum

City of Lawrence

City Manager’s Office

TO:	David Corliss, City Manager
FROM:	Michael Tubbs, Management Analyst
CC:	Diane Stoddard, Assistant City Manager Cynthia Boecker, Assistant City Manager
Date:	June 19, 2008
RE:	Staff Report –BNSF Depot

Background:

Over the past few months, City staff has had several conversations with citizens regarding the BNSF Depot located on E. 7^th Street. These citizens have expressed concern with the level of deterioration of the depot and non-compliance with ADA requirements. Some citizens have expressed an interest in the historic aspects of the structure and would like to see the structure restored.

In November 2007, City staff contacted BNSF regarding concerns about deterioration. The BNSF was responsive and met with possible contractors to complete repairs, such as painting, fixing a broken automatic door, etc. To date, it appears that some of these repairs have been completed, though more are likely needed.

During a recent meeting with Carey Maynard-Moody, Dennis Domer, and Lynne Braddock-Zollner, staff was asked to contact BNSF to see if their intention was to retain ownership of the depot facility or if they were open to other ownership alternatives.

In early April 2008, City staff was successful in contacting John Williams, General Manager for the Kansas Division of the BNSF. Mr. Williams indicated that BNSF would be open to different ownership possibilities and they would only need to retain some office space in the building for their purposes. Mr. Williams also stated that Amtrak is responsible for security of the building relating to the arrival of the passenger train. Additionally, Carey Maynard-Moody recently reported on conversations that she has had with Rich Wessler, Director of Passenger Train Operations for BNSF. Mr. Wessler is interested in knowing if the City would be willing to receive the depot as a donation, contingent that BNSF would retain some office space.

In May 2008, Carey Maynard-Moody attended the Great American Station conference in Albuquerque, NM sponsored by Amtrak. The conference included information on the Americans with Disabilities Act review and update regarding best practices; Understanding the World of Funding Sources related to the railroad industry; Case Studies on Stations before/after Renovations and Telling your Story through Design and Image.

At this point, there is an opportunity for interested citizens and/or the City to work with BNSF, if there is a desire to do so, regarding the status of the facility. There are potential grant opportunities for the restoration of the facility. Additionally, other communities have established programs that utilize local volunteers to assist with meeting arriving trains. If the Northern Flyer Alliance efforts are successful, the number of passengers traveling through the Lawrence location will increase and the interest in improving the facility will also likely be greater.

Previous Commission Action:

On February 26, 2008, the City Commission adopted a resolution supporting the Northern Flyer Alliance and seeking to extend Amtrak services through Lawrence between Oklahoma City and Kansas City.

The City Commission referred this item to staff at their May 20, 2008 meeting for a report. No other action has occurred on this item.

Union Pacific Depot example:

The City has played a major role in the past with the renovation and restoration of the Union Pacific Depot. In December, 1995 the City of Lawrence in partnership with the Save the Depot Task Force used Transportation Enhancement funds to complete renovation and restoration of the Union Pacific Depot in North Lawrence. This depot was designed in 1889 by Henry van Brunt and is listed in the Kansas Register of Historic Places. The building is now used as the Visitor Information Center for the City of Lawrence. The total project cost was $444,000 ($355,200 from ISTEA funds; $88,000 from local sources). (Chan 1994, 57) The source of the City match was City debt financing.

UP Depot Activity:

Building supervision for activities

Custodial/in-house maintenance

Supplies and equipment

Contract repairs last 10 years

CVB also funds staff for the visitor center

Total annual operating cost:

Annual Cost:

$8,000

$28,000

$5,000

$120,000 ($12,000 annually)

$45,000

$98,000

Source: Parks and Recreation Department

Santa Fe Depot History and Current Use:

Timeline:

§ 1873 – The original Santa Fe Depot was built upon the site of the current depot

§ 1938 – The Super Chief passenger service from Chicago to L.A., with service through the Lawrence depot, begins twice weekly operation.

§ 1951 – Lawrence experiences damaging rains. The old Santa Fe Depot is flooded; ultimately requiring “remodeling” to elevate the building above the affected flood plain.

§ 1955 – In April, the original depot is torn down. Construction begins on the new depot projected to cost $125,000. The “new” depot is classified as a remodel due to the use of the original depot foundation.

§ 1956 – Construction is completed in January at a final cost of $140,000. The depot begins usage at noon of January 26, and a formal dedication ceremony is held on February 6.

§ 2002 – A Building Condition Survey is conducted on the current depot by the City of Lawrence. An attempt is made with a grant proposal to utilize the existing depot as a citywide transportation hub. (Parks and DeWitt 2003, 15-20)

The BNSF Depot is an East Lawrence neighborhood landmark and anchor. The depot built in 1956 by the Atchison Topeka & Santa Fe Railway anchors the northern boundary of the neighborhood. The existing depot replaced the ATSF depot that opened in 1880. In 2002, the City contracted to have a condition survey of the building to evaluate the condition of the depot and consider possible improvements. The 2002 Condition Survey did not include cost estimates for possible repairs and improvements at the depot.

The Santa Fe Depot is an un-staffed, medium-sized station with partial amenities. These amenities include: caretaker, climate controlled indoor waiting area, restrooms, parking and public telephones.

Currently, Amtrak provides passenger rail service in each direction on the Southwest Chief No. 3 and No. 4; however, the station is not staffed and the trains arrive and depart during the early morning hours. Additionally, BNSF has active duty crews utilizing a portion of the building.

New Amtrak logo signage has been installed by the City to direct visitors to the depot

Santa Fe Depot Current Condition:

Santa Fe Depot Facts:

Total Property Area: +/- 110,000 square feet remaining (Van Go Arts purchased the parking lot south the depot approximately 40,000 sf)

Building Gross Square Feet: 4,700

Building Net Square Feet: 4,300

Building Height: 14 feet max

Platform Length: +/-925 feet

Number of Tail Lines: 1 continuous, 1 rest

There has been no structural inspection of the depot and the Building Condition Survey of 2002 indicates only minor structural damage. The Building Condition Survey of 2002 does not provide cost estimates for improvements - it focuses only on repair needs. (Marion 2002, 1-25) “The most significantly reoccurring issue involves water leakage into the building through the roof. In many locations there is also evidence of tar leakage. While these instances have damaged surface materials . . . [a] general assessment of these conditions, suggests them to be cosmetic rather than structural. However, if water continues to penetrate through the roof, past experience shows more serious structural damage will occur.” Moreover, the depot has not received the level of maintenance needed and significant deterioration has resulted. The deterioration is evidenced by stained, rusted, spalling or water damage to metal, concrete and other surfaces. (Park & Dewitt 2003, 22-23)

Maintenance:

City staff has estimated the ongoing annual maintenance costs for the depot at approximately $53,935 plus part-time staff cost. Factors that could increase this cost include snow removal, security system, communications and parking lot maintenance. Additionally, a ½ time maintenance staff person will be required for the building.

Maintenance Activity	Avg. Annual Cost
Custodial	$4,700
Energy	$25,000
Grounds	$2,000
Maintenance and Repair	$18,000
Pest Control	$235
Water, sewer, refuse (utilities)	$4,000
Total estimated annual operating cost:	$53,935 (plus part-time staff cost)

Source: Public Works -Building Maintenance Division

As previously mentioned, there is a group interested in the City acquiring the building; however, there are pros and cons to City ownership which must be carefully considered before any decision is made.

Pros and Cons of City ownership of the Santa Fe Depot:

Pros:

· Some potential economic development opportunities related to ownership such as:

o The potential boost to tourism and the trail of money tourists leave behind when they get back on the train after their visit to Lawrence, especially the boost they give to downtown retail.

o Adding to the Bleeding Kansas destination tourism and the historic significance of RR work & workforce in Lawrence. Additionally: An Amtrak passenger can alight at any stop (including Lawrence) and reboard the same train at any time with no extra charge for the reboarding to continue to their final destination.

· The City would play a key role in guiding historic renovation of structure.

· The renovation would add to the ideal of the depot supporting tourism and enhancing rail service such as the Northern Flyer route.

· The enhancement of the neighborhood of East Lawrence including better security at the depot once more presence is realized.

· Preserving an important architectural feature and an important historical transportation facility.

· Passenger rail will connect us to the region with an environmentally friendly mode of transportation and potentially reduce congestion on the interstates and state highway systems.

· Funding options for station development is available in the form of grants and public private partnerships including tax incentives.

· BNSF may be willing to donate the depot; however, BNSF wants to be sure the City is interested in ownership before starting this lengthy internal process. There is an internal BNSF process that must be completed prior to beginning any property transfers.

Cons:

· Ownership will impact the City’s risk management in terms of increased liability insurance cost.

· Challenges to achieving full ADA compliance and costs related to ADA improvements. If the City owns the station then responsibility for ADA compliance is 100% with the City. The existing intercity rail stations must be made accessible by July 26, 2010, this will be difficult to achieve due to insufficient time, insufficient funding, and lack of clarity of regulations –guidance /proposed regulations on platforms and responsibility for ADA compliance

· There would be an expectation that the City pursue historic renovation of the depot; while grant funds would be available a local match would be required.

· City acquisition of the building at this time would relieve BNSF of its deferred maintenance responsibilities for the building.

· Agreement required for continued use by BNSF Freight Office and Amtrak Passenger Rail Service.

· Maintenance and repair cost for upkeep of the building including utilities is a significant cost.

Also, related to the potential acquisition of the facility, staff believes it is important to note that the City currently owns a historic structure the Carnegie Library, for which renovation has not yet been completed.

The Acquisition Process:

If a decision is made to acquire the depot, the City will go through an acquisition process prior to BNSF transferring ownership of the depot. Ruth Falkenberg and John Hankey in an article printed in, Information Series No. 44, 1991, Railroad Depot Acquisition and Development; outline the steps of the lengthy process of acquiring a depot where they write:

“The Acquisition Process

The successful acquisition and reuse of depots requires clear goals, community support, planning, financial wherewithal, and patience. Local governments support is key to the success of the project. Railroad company representatives prefer working with local officials in the belief that the communities are forever, while interested in groups and organizations come and go. Negotiation can easily take up to 18 months and is more likely to succeed if it is not forced into a shorter time frame. Taken step by step, the process is lengthy but manageable.

1. Conduct a preliminary evaluation of the building and the project.

Hire an architect, engineer and contractor to determine the building’s structural integrity, condition of the mechanical systems and general renovation requirements. Review the zoning for types of uses and occupancies allowed. Survey the surrounding areas for transportation routes, neighborhood amenities and market opportunities.

2. Define project goals.

Decide on the best use for the depot: commercial (restaurant, shops, offices), public (government office, visitor center, community center), nonprofit (museum, charitable organization), or mixed use. How long will the project take and how much time is available? What are the estimated costs of acquisition, rehabilitation and operation?

3. Establish the development team.

The developer can be an existing organization or one formed for the sole purpose of redeveloping the depot. It can be a nonprofit organization, a for-profit business, a public agency or combination of entities.

4. Secure public support.

Whether or not the local government takes a leadership role, its support is crucial to acquisition negotiations with the railroad company. Sell the project to influential government officials and to the public through a strong public relations effort. A groundswell of public opinion may influence not only local officials, but also the railroad company.

5. Determine project feasibility.

An accurate and complete feasibility study helps all those involved assess the risks and rewards of the project and make informed decisions about continued participation.

A project feasibility study should include:

· Description of the historical and architectural significance of the building.

· Evaluation of the market and the economic conditions that affect the project, information about local demographics and socio-economic characteristics and an evaluation of development trends.

· Description of the site and analysis of the location.

· Analysis of the physical condition of the building and site.

· Professional real estate appraisal of the property.

6. Complete the detailed planning.

Establish who the user will be and the roles to played by team members of the development team. Will the city acquire the building and transfer ownership or lease it to a nonprofit organization or sell it to a for-profit developer? Determine the preferred way to acquire the property—donation, sale or lease.

If the building is designated as a local landmark and is subject to review by landmark commission. Present preliminary plans to be sure they meet the commission’s guidelines. Landmark review boards are often good sources of technical and design help for preservation projects. If the building is listed in the National Register of Historic Places and there is federal involvement, the state historic preservation office (SHPO) may require review of project plans and specifications. Both the SHPO and the National Park Service will review the plans if investment tax credits are used. Again, a preliminary review is important. Consider measures to insure long term preservation of the building, such as donation a façade easement to an appropriate agency.

Prepare detailed cost estimates for acquisition; structural, mechanical, and plumbing improvements; correcting code violations; removing asbestos; restoring historic detailing and completing interior finishes. Also include soft costs, such as professional fees and interest loans. Be sure to list the value of donated services and materials. Determine project operation and maintenance expenses over a period of five to ten years.

Prepare a funding plan. Include all potential sources of funding such as grants, loans, private donations, public funding, equity financing, and donated services and materials. List how much money has been received. How much is committed and determine how the remainder will be raised. Identify sources of income and donated funds to cover ongoing operational costs.

7. Prepare the redevelopment plan.

Write an organized and complete description of the project based on this research that details possible uses, qualifications of the developer and development team, project cost, status of funding, time table, plan for future operation ways to mitigate railroad company concerns for public safety issues and company liability.

8. Submit the final redevelopment plan to the railroad company.

While conversations with the railroad company have probably been going on throughout the planning process, the redevelopment plan will be an important part of the company’s decision to relinquish ownership or control of the property. The redevelopment plan should be an accurate description of a feasible project involving individuals or organizations capable of successfully completing the project. As in any real estate transaction, there should be room for negotiation on both sides.

Summary

Acquiring a depot from a railroad company is, above all, a business transaction. The company views the property as part of its overall financial and operational portfolio. The developer, whether the city, a nonprofit organization or a for-profit investor, must plan and implement a project that will work either as a profit-making venture or with public or private support. While the history and architecture of the building are important in determining whether the depot is worth preserving, successful preservation will only occur if the redevelopment plan is based on solid business principles.” (Falkenberg and Hankey 1991, 4-6)

Historic Designation:

The depot structure is not currently on the historic register, nor is it part of the environs of any historic district. It is owned by the BNSF, who has an agreement with Amtrak, for utilization of the facility. The City has no ability to influence what is done with the facility, or how things are done, beyond the City’s ability to enforce property maintenance codes. Additionally, some funding options are linked to the property being listed on the state and federal historic registers.

Placement on the historic register requires the property owner’s consent and previously BNSF has not been in favor of such registration. If the property was a historic property, the owner would need to be sensitive in completing any repairs to the facility. The City code does have a provision that would enable the City to place the facility on the local register of historic places without the property owner’s consent; however this provision has never been utilized. The preferred route is to get the owner’s consent prior to initiating the historic designation process. One possible avenue might be to formally ask BNSF if they would agree to a historic designation at this time while retaining ownership.

Summary:

The intent of our discussion on Tuesday June 24, 2008, is to obtain direction from the City Commission on whether to proceed with any of the options below related to the Burlington Northern Santa Fe Depot.

Options and alternatives:

Staff is seeking direction on how the City Commission would like to proceed with this item. Staff offers the following options and alternatives for consideration:

1) Do nothing at this time

2) Formally request BNSF to consider historic designation for the depot

3) Proceed with ownership and delay restoration

4) Proceed with ownership and restoration of the depot