Concerns Over Lease Sideline Saginaw #2

The Board of Directors released the following update on Saginaw Timber Company #2:

At Mid‑Continent’s Board of Directors meeting held on December 10, 2016, after a long discussion, a majority of the Board voted, pursuant to the terms of the lease, not to run the Saginaw #2 as a part of its steam program. The Board of Directors’ primary concern is the potential large financial liability in running the Saginaw #2 as the Museum is immediately responsible for all repairs to the engine during the term of the lease. The lease does not require the Lessor to give any warranties on the workmanship of repairs made to the engine. In addition the Board of Directors is committed to running Museum owned engines, not privately owned engines, and at the present time does not believe, with the high cost of maintaining and running steam locomotives, that two engines can be run at the same time.

One director explains, “This was not an easy decision to make. It was not a black-and-white situation and there are several issues that had to be considered. All options were looked at. In the best interest of the museum, the financial liabilities had to take priority. Lease costs with the obligation of fifteen years for maintenance and with no warranties whatsoever was the main reason that made the decision necessary.”

Arbitration regarding the #2’s lease is ongoing.

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