Memorandum

City of Lawrence

City Manager’s Office

 

TO:

David L. Corliss, City Manager

 

FROM:

Diane Stoddard, Assistant City Manager

 

CC:

Cynthia Wagner, Assistant City Manager

 

Date:

 

August 16, 2010

RE:

Direction Regarding the Acquisition of the Santa Fe Station

 

The City Commission has provided direction to staff to work with the BNSF Railway in order to acquire the Santa Fe Station (the BNSF Depot) located on E. 7th Street.  In the most recent discussion earlier this year, the City Commission directed staff to make the transaction with the BNSF Railway contingent upon receipt of a Transportation Enhancement Grant, which will complete the ADA improvements and complete the first phase of the preservation project for the facility. 

 

The City recently learned that it was not successful in obtaining the TE Grant.  The next TE Grant round is anticipated in late 2011, with grant awards in 2012.  There are other grant opportunities that the City may pursue.  However, most opportunities would require acquisition of the property by the City and placement of the property on the Historic Register.

 

Status of Discussions with BNSF

BNSF Railway has provided the City with several documents to facilitate the real estate donation of the station.  Conceptually, the documents provide for the donation of the building to the City and a long-term land lease on the ground.  City staff has reviewed the documents and provided comments back to BNSF regarding the documents.  Major issues identified by City staff at this point include environmental liability and cost sharing of certain costs in the future with BNSF on the facility.  City staff is awaiting comments from BNSF regarding these and other items. 

 

Next Steps:

Staff wishes to confer with the City Commission to confirm current direction regarding acquisition of the building since the City has learned that it was unsuccessful with the TE Grant. The City could work on proceeding with the acquisition without any contingency with the ownership transfer.  This approach would more quickly place the Station in the hands of the City and could enable earlier placement of the structure on the Historic Register.  Having the ownership issues completely solved and the Historic Register status obtained would improve the City’s opportunities for grants. However, acquisition without a grant in hand would likely result in ADA liability, the need to fund other structural maintenance issues related to the building and daily maintenance activities.  There are no City funds budgeted for this facility in either 2010 or 2011.  Spending funds on this facility will require reduced spending on other City priorities and programs. 

 

It appears that a possible strategy might be to continue with the acquisition negotiations, but continue to place a contingency of the receipt of a grant on the transfer.  This would enable the City to consider the final acquisition and have a greater understanding about the financial commitment needed by the City as a result.  Also, it would enable the City to complete the negotiations with BNSF and have the necessary ownership transfer documents in place, awaiting a grant.  While this wouldn’t enable the City to indicate that the ownership or Historic Register designation had been received, the City could indicate that all documents are executed and the ownership would take place if the grant were received.  It does also appear that this option would be acceptable to the BNSF. 

 

Recommendation:

Staff recommends that the City Commission direct staff to continue to work on Santa Fe Station acquisition with the BNSF Railway with the continued contingency of a receipt of a grant to assist with funding the acquisition.