CITY COMMISSION AGENDA ITEM

Department:	City Manager’s Office		Commission Meeting Date: May 2, 2017
Staff Contact:	Diane Stoddard, Assistant City Manager
Recommendations/Options/Action Requested:
Authorize staff to finalize and the City Manager to execute the building and land donation agreements and associated documents related to the Burlington Northern Santa Fe (BNSF) Railway for the acquisition of the Santa Fe Station, located on E. 7^th Street.
Executive Summary:		As the City Commission is aware, staff has been finalizing the transfer of the Santa Fe Station from the BNSF Railway to the City of Lawrence in order to take advantage of a sizeable grant for the rehabilitation of the station that was awarded by the Kansas Department of Transportation (KDOT) in 2013. Amtrak recently approved all of the documents. During the final review of the documents by the BNSF Railway, BNSF has requested modification to the transfer. On Monday, April 17, staff was informed that BNSF desired to donate the land, in addition to the building, to the City. The long standing position of the railway prior to that notification was that BNSF was only willing to enter into a long-term land lease. Further conversations have clarified that BNSF is willing to maintain the environmental liability provisions previously negotiated as part of the long-term land lease with the land transfer. That means that BNSF will retain liability for past actions related to the land and the City will assume responsibility for any environmental liability occurring after it assumes ownership. Additional discussions with the railroad revealed that they no longer will require a lease-back agreement or a repurchase clause. Previously they required the ability to lease-back their former space within the building with a short notification lead time to the City. This would have limited the ability of the City to utilize that portion of the building for any long term programming or use. Also, they required a repurchase clause that would have enabled them to repurchase the building from the City in the future. All of these modifications in position are in the interest of the City and will add flexibility to the City for the use of this building and site into the future. Further, the City has learned that BNSF is very interested in completing this transaction with the City expeditiously and the desire to gift the land to the City has come from the CEO level of the railroad. Staff has also been in contact with Amtrak and with KDOT regarding these recent discussions. KDOT has agreed to move the bid letting for the project back to July. This requires swift finalization of the agreements to meet KDOT lead time requirements ahead of the bid letting. Staff is working on the final drafts of the agreement and there are not yet final documents. However, staff is confident that key points of the transaction have been negotiated in the favor of the City and requests authorization for the City Manager to finalize and execute these documents so that the land transaction can be closed in May.
Strategic Plan Critical Success Factor		Safe, Healthy, and Welcoming Neighborhoods Innovative Infrastructure and Asset Management Collaborative Solutions Economic Growth and Security
Fiscal Impact (Amount/Source):		Funds budgeted for the grant match were budgeted and reserved in 2013. Once the building and land transfer are completed, the City will be obligated for responsibility for the facility and the site into the future.
Attachments:		N/A

Reviewed By: (for CMO use only)

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