CR 90-149 Lease Agreement Burlington Northern
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Jllly 10, 1990
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Council Report: 90-149
Lease Agreement with
Bur 1 i:n(f ton Northern Railroad
f.;~~9!!I!M~ Acti9n~
Staff recommends the following:
e~~nditure of $500 forth~ city
~~"lin~ton Northe~ Railroad.
Move that council authoriz~--.th~
to enter into a le~se ~reement with
QYjl1;.Y.a..lh.
Since August 1989 city staff has be.en negotiating with Burlington
Northern Railroad for an easement or nermit to reconstruct a chain
link fence along an alley abutting raiiroad property between Madison
Circle North and South. The present fence is situated directly on the
common property line and is in a badly deteriorated condition. The
city intended to remove and replace the fence in kind by relocating it
ten feet. inside Burlingt,on. Northern right-cf--way. This was proposed
to the Council at its June 5 meeting but the Council tabled
consideration of a lease agreement with Burlington Northern Railroad
for further information.
~upport1~q Information.
o Letter to Burlington Northern
o Location map
o Letter from Hopkins City Assessor
o Lett~r from Burlington Northern Railroad
o Lease agreement with Burlington Northern Railroad
1~~lUSry ISflJ4Il1. ~o COnsider ~
o What is the need for a fence?
o What are the terms of the lease?
o What are the costs and source of funding for the lease and
fence installation?
o Alternatives.
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J!\U'M~S GeG~~le
Engineering Supervisor
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CR: 90-149
Page 2
An&ly~i8.
o What is the need for a fence?
City staff undertook a poll in August 1989 of Campbell Third Addition
residents to determine sentiments concerning the present chain link
fence between the neighborhood and Burlington Northern property. The
overwhelming sentiment was to replace the structure that is badly
deteriorated because of the snow mounded up against it during winter
plowing. Reside.nts cit,ed safety reasons for maintaining a fence
because of p'edes~rian traffic through the railroad property and
because of a precipitous drop in terrain west of the alley way. The
residents were again polled recently and agai.n safety was the
paramount issue. The fence is approximately thirty years old and was
installed by the developer of the housing in the neighborhood to
address t.he issue of a barrier between the homes and the then existing
railway spur line. The residents feel strongly about maintaining the
struc,ture.
Proper reconstruction of the damaged fence requires a setback from the
property line on to railroad property. This design consideration led
staff initially to seek permission to encroach on railroad property.
Burlington Northern's first response was to offer their property for
sale~ staff r'equested a proposed sale price but none has been offered
to date. Recent correspondence from the City Assessor to Burlington
Northern indicates the 1990 property valuation is set at $143,500. In
lieu of .the City purchasing the railroad parcel, staff proposed a
lease or easement to accomplish the relocation.
o Wha,t are the terms of the lease?
Burlington Northern leases .:t ten foot strip of its property to the
City of Hopkins for the purpose of placement of a chain link fence.
The lease COMmence~ on May 21, 1990 and the city agrs6s to pay a one
time rental sum of $500. This is a perpetual agreement that either
party may cancel at will on thirty day's advance written notice. This
latter term appears rather restrictive in its open-ended termination
featu~e. The city Attorney suggested that staff obtain a fixed term
in the neighborhood of five years as a minimum. B\,u"lin9''ton Northern
was approached with a counter proposal but tho company remains firm
with its original Pl"Oposal. Further invt!lstigation by staff into pas't
lease nc;reements with railroads reveals this aqreement has terms no
different than former ones. In fact, the city haa aqraements. with
:t~y ..a~lta~er:;~:;i~~d ~t"o~e~e;::: cover such utilities as water,~
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CR: 90-149
Page 3
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What are the costs and source of funding for the lease and fence
installation?
The c~st of a full term lease with Burlington Northern is $500. The
cost of approximately 400 feet of new fence is $4000. The source of
funding for this project can be from the street department. This
division is presently facing some tight budget constraints; and
installation could be scheduled for this fall and costs spread over
1990 and 1991.
AlU.!]Mlti veL.
1. Table authorization for further information.
2. Grant authorization to enter into lease agreement.
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C I T Y
o F
HOPKINS
August 7, 1989
Bruce Hopp
Burlington Northern Railroad
4105 Lexington Avenue North
suite 200
Arden Hills.. MN 55126
Subject: Abandoned railroad right-at-way along Madison Circle North
and South, Hopkins I Minnesota.
Dea.r Hr, aopp;
As I explained in our telephone conversation, the city ,,,f Hopkins
aaintains a chain link fence between your property and a City street.
~o>> a preliminary survey we have established that the fence is
. situated directly on the common property lin.e., The condition of the
fence bas deteriorated badly r arisirlg from snow mounded up against, it
durinq winter plowing of ~~e street.
The City of Hopkins intends to remove the present fence and requests
permission to relocate a new fence in kind ten feet inside Burlinqton
Northern %'i.9ht-of-wa~1'. Should we need to enter into negotiations over
an easement or permit with your firm we are prepared to do so,
I have enclosed a map showing the site in question and location of the
existing and proposed fences.
You mentioned Burlington Norther-n's interest in selling the abandoned
prgperty~ At the pr~sent time the City has no interest in purchasinq
this parcel.
sincerely,
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James Gessele
Ingineerinq Supervisor
1010 Arst Street South, Hopkins, Minnesota 55343 612/935-8474
An Equal Opportunity Employer
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RELOCATION
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C I T Y
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HOP K
N S
May 2, 1990
Burlington Northern Railroad
Attn: John M. Heron
Property Management
4105 Lexington Avenue N. ste. 200
Arden Hills, MN 55126
Subject: P.I.D. #19-117-21 23 0094
Dear Mr. Heron:
On May 1, 1990 the Hopkins Board of Review approved a
reduction in valuation of the property that you had
appealed~ The 1990 valuation will be reduced by $38,100.
The new 1990 valuation will be:
LAND
$143,500
BUILDING
TOTAL
$143,500
Their decision may be appealed to the Hennepin County Board
of Equalization. The Hennepin County Board of Equalization
will meet June lS-June 29, 1990. For an appointment to
appe.ar at the County Board you may call 348-5076.
Application to the County Board must be made by June 11,
1.990.
sta:te Law also provides that a property owner can appeal to
the Tax Court or District Court for a review of his or her
assessment (for information call 296-2806). If you have any
questions, please call me at 935-8474.
Slnc.arely I
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Rohert C. Wilson
City Assessor
1010 First Street South, Hopkins. Minnesota 55343 612/935-8474
An Equal Opportunity Employ!)r
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-=:: BlJRUNGTON NORTHERN RAILROAIl
Property Managem<:i1t
4105 Lexington Avenue Nett '
Suite 200
Arden Hills. MN 55126
June 18, 1990
Mr. James Gessele
Engineering Supervisor
City of: Hopkins
101.0 First Street South
HopkhiS: MN 55343
RE: Lease 545,294 - Chain link fence - Hopkins, MN
Dear Mi". Gessele:
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This refers to your letter dated June 'l regarding the terms of the above
agreement.
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Item 1 of the lease referring to rental of $500.0fJ tor the full term ia ~ntended to
mean a one-time payment tor the agreementj and as to Section 14 this is the best
terms that Burlington Northern can issue tor fencing purposes.
Sincerely,
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I Bruee E. Opp
Regional Mana.ger Real Estate
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