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Train Deal Derails

 Heritage Foundation plans to open Railway in April for tourist season

After an intense week dealing with the termination of negotiations for the lease/sale of the Big South Scenic Railway the McCreary County Heritage Foundation (MCHF) shed some light on their decision to retain ownership of the historic tourist attraction as the Board met Tuesday to discuss the future of the railroad.

Negotiations stalled last week, and a Facebook open letter posted by Diana Bybee and Sam Carpenter of DSRR, LLC (Diana and Sam Railroad) challenged the Foundation to reopen negotiations for the sale of the Railway, and to consider additional negotiations for the sale of downtown Stearns.
Board Director Tim Lavender spoke of the factors that eventually led to the Heritage Foundation terminating the deal.

“I feel we really tried and exceeded our good faith effort,” Lavender remarked.  “Because of the promises and representations of improvements for the town and railway, we bent over backwards to negotiate.  From the beginning, Mr. Carpenter departed from the Memorandum of Understanding making it impossible for the Heritage Foundation to continue negotiations-if we met one demand, another demand came from a different direction.  It was simply impossible to make an agreement for one party to retain most of the revenue while leaving expenses with the Heritage Foundation.  I personally got the impression there was never an intention to reach an agreement.”

The Voice has obtained a letter, dated March 9, signed by MCHF Chairperson Buddy Wilson, which terminated all negotiations regarding the Scenic Railroad and other subjects addressed in a Memorandum of Understanding between the two parties dated December 13, 2016.

In the termination letter, the Heritage Foundation also asked DSRR to arrange to return immediate control of the Heritage Foundation’s BSFSRY webpage and Facebook page to the Heritage Foundation along with all property and keys.

In addition, the letter expressed MCHF Chairperson Wilson’s willingness to discuss the reimbursement of expenses incurred by DSRR that provided a measurable benefit to the Heritage Foundation.

Public interest in the negotiations has been intense with an outpouring of social media comments and opinions expressed through the Big South Fork Scenic Railway (BSFSRY) Facebook page.  As of press time, it appears administrative control of the page is in the hands of DSRR although the March 9 letter of termination specifically asks control of the Facebook page, along with property and keys, be returned to the MCHF.

Wilson said he acted in good faith based on the Memorandum of Agreement in granting administrative control of the BSFSRY Facebook page to DSRR after receiving a February 8 voicemail from Carpenter insisting DSRR be granted administrative access.  In the voicemail, Carpenter indicated DSRR needed administrative access immediately to control the content of the web page to assist in their own redesign of the page.  In the voicemail, Carpenter assured Wilson not to worry about the Heritage Foundation getting administrative access back if the deal failed and acknowledged the reality that either party could walk away and not sign the deal.

Although there were other issues, Wilson indicated a major “deal breaker” for the Heritage Foundation was DSRR’s desire to renegotiate the original triple net leases.  According to Wilson, all original lease negotiations were based in perpetuity (forever) on triple net leases.

Triple net leases are defined as leases in which the tenant is responsible for insurance, taxes, and maintenance in addition to rent.

Chairperson Wilson indicated significant changes were made in February by DSRR to the first leases drafted in January (triple net).  Changes included taking responsibility for maintenance of the roof, gutters, painting, HVAC and the repair and maintenance of landscaped areas, sidewalks, driveways, and parking areas away from DSRR and placing them on the Heritage Foundation.

With negotiations for sale of the railway terminated, the non-profit McCreary County Heritage Foundation will now turn its attention to preparing for the rapidly approaching opening days of train season.

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