Locomotive returning to Railroad Museum

Milwaukee Road steam locomotive #261 will be returning to the National Railroad Museum after 18 years of service with a Midwest tour company. It was the first piece of railroad equipment acquired by the museum in 1958.

The museum has leased out the steam engine to The Friends of 261 since 1991. The Minneapolis-based organization offers stream train rides around the Midwest.

Bob Lettenberger, the operations director at the National Railroad Museum, said the museum was unable to come to an agreement with The Friends of 261 to extend the current lease. It is set to expire in 2011.

"We're disappointed because we did want to see the locomotive keep running and we are actively talking with other parties who may be interested," said Lettenberger.

The steam engine has been a source of revenue for both organizations. Lettenberger, however, says it's only a modest source of income for the National Railroad Museum. Museum officials declined to release the exact terms of the agreement to FOX 11, only saying that it has been the same amount since 1991 and that the museum is now asking for a minimal increase.

The Friends of 261 did release the figures, arguing it is not a minimal increase.

Steve Sandberg, the COO of Friends of 261, tells FOX 11 that the National Railroad Museum was asking for an increase to about $50,000 per year but then negotiated down to about $25,000 per year to lease the locomotive. Currently, according to Sandberg, the organization is paying $10,000/year.

The group is also unhappy because it says the museum would only offer a 10-year lease --- even though it would have to pay the entire cost, an estimated half million dollars, for an inspection that is required every 15 years on a steam engine.

"The increase in rent along with the term of agreement, our organization really could not afford. The sentiment of the museum has changed drastically to 'you're not paying us enough money ... We want more'," said Sandberg.

The museum argues the amount is fair and long overdue --- but Lettenberger said money is not the motivating factor.

"For us, it has been more so important to have it out there and have it as an educational too;" said Lettenberger

The Friends of 261 must now return the engine back to the museum. It is unknown when that will happen because the engine is currently in Minneapolis, partially-torn apart.

The Friends of 261 was preparing to put it through inspection before deciding to end the agreement.

Lettenberger said the National Railroad Museum is looking at other options that would allow the steam locomotive to continue operating.