(The following article by Bob Hansen was posted on the Hawk Eye website on February 22.)
BURLINGTON, Iowa — For most of its existence, Burlington has been a railroad town.
The steel rails brought its settlers and carried away its manufactured goods. The salaries paid to its workers were an economic mainstay in good times and bad. This relationship is especially evident in the town’s 41–acre riverfront area — a maze of mainline and switchyard tracks.
However, with the Burlington Northern Santa Fe Railway’s Dec. 3, 2003, decision to virtually close its Burlington locomotive repair facility, that relationship has begun to unravel and the issue of BNSF’s continued rent–free occupation of the prime riverfront land may be headed to the courts.
The recent layoffs have prompted the Burlington City Council to consider legal action against BNSF to either reacquire land now occupied by the railroad, force the return of the repair facilities or to force the railroad into paying rent to the city for use of the land and facilities in a given area.
Dan Cahill represented the city in a related 1982 dispute with the railroad regarding ownership of the south parking lot of Memorial Auditorium, and said that while the city’s claim appears sound, BNSF lawyers are capable of playing “hard ball” on questions of property ownership.
The agreement for use of the riverfront held the railroad to an ongoing contractual obligation to locate the shops in Burlington. The fact that the railroad is not in compliance with this agreement would seem to weigh heavily in favor of Burlington, Cahill said.
But, with the railroad, being right isn’t always enough.
“The railroad is extremely difficult to deal with,” Cahill said. “They are worse than a government agency because, at some level, the government has to answer to the people that elect it. But the railroad feels they are above all of that. They feel they hold title to the land, but it is not a good title.
“The city could not have given away the land even if they had wanted to,” Cahill said. “But, the railroad has very deep pockets and can afford to litigate an issue like this until hell freezes over. They could just outlast Burlington.
“I think the city has an extremely strong bargaining lever here, and I wish they had used it a year ago when the negotiations with the railroad concerning the shops were going on. I don’t think BNSF realized the shops were part of the agreement regarding riverfront land.”
The basis for the legal spitting match involving town and railroad is an 1836 act of Congress that called for the U.S. surveyor general to lay out the town of Burlington. That directive stipulated, “A quantity of land on the river banks shall be reserved from sale and remain forever in public use, as public highways and other public uses.”
The federal government mandated that Burlington, along with the communities of Dubuque, Bellview, Fort Madison and Peru, be trustees for the land along their riverfronts and that this ground could never be sold but used only for “public purposes.”
There were later U.S. Supreme Court cases, which ruled railroads were such a public purpose, but title for the land would remain with the city.
By 1855, placement of the riverfront into the trust was becoming an important issue in the town’s development.
The Chicago, Burlington and Quincy Railroad had arrived on the Illinois shore at the railhead of East Burlington and was looking for a route to the opening western territories. The Burlington and Missouri River Railroad was waiting for it.
The B&MR had been put together by a group of Burlington businessmen with a financial assist from Boston bankers who also were funding the CB&Q.
The local investors were able to engineer a number of sweetheart agreements from the federal and city governments. Principal among these were land grants along the right of way as it crossed Iowa, but there also was an agreement with the city granting the railroad a portion of the land held in trust so a repair facility could be built.
In 1868, the CB&Q bridge was completed at Burlington and by 1872 the Burlington and Missouri was rolled into the CB&Q — along with its assets and liabilities.
Among those assets was the agreement with the city providing land for a repair facility and switchyard along the riverfront. But with that right came the obligation that the CB&Q would now have to maintain its shops in Burlington.
This position was not an issue for the CB&Q until 1880 when the riverfront parcel became too small to hold the shops necessary to service the expanding rail network.
But, once again, Burlington had an answer.
The town acquired land on the town’s western edge and made it available to the railroad under terms of the original agreement.
At this point, the city attorney was becoming a little more specific on the CB&Q’s obligations.
Written into that 1880 agreement was the declaration: “It being expressly understood that the words ‘machine shop and other buildings’ whenever used in this agreement shall be understood to mean the principal machine shops and other buildings of the Burlington and Missouri River Railroad mentioned in any former ordinances.”
The agreement calls for not just any machine shop, but the “principal shops” for the entire system.
In other words, the city wished all parties to be aware that the agreement with the B&MR was just as binding on the CB&Q as it had been on the local company the larger railroad had taken over.
Apparently, this posed little problem and the agreement was signed by A.G. Adams, Burlington mayor, and C.E. Perkins, vice president for the railroad.
More than 12 decades later, in 2003, the railroad decided to move the shops and is no longer in compliance with the 1880 agreement.
The question now facing the City Council is should Burlington seek legal redress and force the railroad to pay rent for the property, force them to re–establish the shops and the nearly 400 jobs that were lost, or pick up their bridge and go elsewhere?
In the nearly 150 years since the B&MR was formed, the riverfront property has sprouted a wealth of non–railroad uses including grain elevators and warehouses. The situation has grown so complicated that in 1980 Burlington spent $58,000 to acquire land for the municipal sewage treatment facility — land that apparently the city already owned.
The city has approached legal action with the railroad regarding the riverfront on at least two other occasions.
The first was in the 1930s when then–city attorney Ben Poor wrote to the City Dock Board regarding the railroad’s contention that it had been deeded the property: “The city did not take the water front as its own property. It took title simply as a trustee … for the benefit of the public,” he wrote. “It is my thought that the city had no power to abandon the trusteeship or to place it in other hands.”
Poor’s contention that the city could not give away the riverfront even if it wanted to was echoed by Cahill when he represented the city in the 1980s.
Cahill wrote to the railroad: “The agreement that the city had with the CB&Q was that the principal shops for the railroad would be maintained in Burlington, Iowa. We are inclined to question whether the railroad is currently honoring this contractual agreement in light of the establishment of the vast rail facility proposed for Galesburg, Ill.”
In both these instances, the city backed down in the face of significant legal expenses and no further legal action was pursued with the transportation giant.
Now, however, the torch has passed to the current city government to evaluate the wisdom of fighting the railroad. However, with the loss of the West Burlington shops the stakes have grown considerable higher.