photo by: Elvyn Jones

The Baldwin City Council and Midland Railway are at an impasse over a proposed lease for the old depot in the city after the railway rejected an offer than would have eliminated an existing city credit to its utility bill.

The Baldwin City Council will have a special meeting Tuesday to further discuss a depot lease agreement with Midland Railway.

On June 16, the Baldwin City Council voted 5-0 to approve an offer to lease the city-owned depot, 1515 High St., to Midland for $1 a year. The offer also would revoke an existing utility credit that gives the nonprofit Midland a break on city utility bills of from $4,000 to $5,000 annually.

Councilman Scott Lauridsen, who leads a city team negotiating with Midland, said the offer was the city’s attempt to resolve a dispute over control of the depot between Midland and the Santa Fe Trail Association. The SFTA currently leases the depot from the city for $1 a year and subleases it to the railway. Both parties requested that the city help resolve the dispute in March, he said. Midland said its control of the depot was critical as it looks to grow its operations.

At the June 15 meeting, Lauridsen explained the end of the Midland utility credit would help offset the expense of another proposed action the city is taking to end the dispute, purchasing the small park and parking lot just south of the depot from SFTA for $100,000 through annual installments of $5,000.

“From the city’s perspective, the offer is a way to hold the city harmless and satisfy all the parties,” Lauridsen said. “That’s our goal.”

A.J. Stevens, the chief financial officer of Baldwin City & Southern Railroad, Midland’s wholly owned for-profit subsidiary, said the city should stick with an agreement negotiated in 2018, which put the utility credit in place. That agreement was tied to the $345,000 purchase of an easement for a future multi-use trail along the Midland tracks from Baldwin City to Ottawa. Baldwin City paid $188,000 of the easement purchase price, Douglas County contributed $94,000, and various city and county economic development groups provided the remainder. Midland used the money to repair tracks that had been washed out in August 2017.

The utility credit was included in the easement agreement as a way to offset the higher insurance costs Midland would incur from the trail, Stevens said. He noted those insurance increases would start next year with the city’s 2021 installation of a multi-use trail along the tracks. In February, the city learned it would receive a $1 million state grant to pay for 80% of the trail’s construction cost.

The city also agreed to lease the depot to Midland for $1 annually in the easement agreement, Stevens said.

“All we are asking is to honor the agreement already agreed upon in 2018,” Stevens said. “All the rest is just noise.”

The depot issue came to the City Council in March after Midland announced it was suspending tourist train trips from Baldwin City because the SFTA had evicted it from the depot. Roger Boyd, president of the Douglas County Chapter of SFTA, told the Journal-World at the time that the action was taken because Midland was delinquent on a lease payment.

The city has leased the depot to the SFTA for $1 a year since 1977 and sold a park and parking lot just south of the depot to the association for $1 in 1984.

The SFTA has subleased to Midland the depot and park since 1987. The latest agreement has Midland paying 35 cents per passenger with an annual cap of $9,000. That cap has been reached in the last two years because of the success of Midland’s holiday season Polar Express rides.

Boyd said the SFTA used the lease payment to pay for insurance and maintenance on the depot and its other properties, which include the replica log cabin on U.S. Highway 56 east of Baldwin City and the old Grange Hall in Vinland. The annual installment payments for the small park would be used for the same purpose, he said.

Lauridsen said the special council meeting at 4 p.m. Tuesday at the Baldwin City American Legion Post, 803 High St., was scheduled to explain the depot issues to the public and hear comment. He said should Midland stick to its current position, he was prepared to support staying with the current agreements of the city leasing the depot to the SFTA and the association subleasing the building to the railway.

“We have agreed to lease the depot to Midland in perpetuity,” he said. “That’s not trivial. We’re giving them what they asked for. At some point you have to say, ‘That’s our best offer.'”