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261 Will Stay in the 55413

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After a winter of rumours and uncertainty, an historic steam locomotive has been purchased by a metro-area railfan group:

Earlier this month the [Friends of the 261] Board of Directors approved the purchase of Milwaukee Road No. 261 from the National Railroad Museum of Green Bay, Wis.

The locomotive, which operated from 1993 to 2008, was owned by NRM and leased to the Friends for operation. For the past several years the two organizations have been negotiating for a new lease, but were unable to agree on terms. At one point NRM offered to sell the engine to the Friends for $800,000 or lease it for $70,000 per year. Things finally came to a head in November 2009 when negotiations ended and it was agreed that No. 261 would return to NRM for display - the engine had been on exhibit in Green Bay from 1958 to 1992.

Following the end of negotiations last fall, NRM, through broker SterlingRail, put No. 261 up for sale for $225,000. A California businessman and World War II aircraft collector made a bid to purchase the locomotive, and contacted the Friends about the possibility of overhauling and operating it. However, the buyer was unable to complete the transaction and in March 2010 NRM contacted Steve Sandberg. The Museum offered to sell the engine to the Friends, but the deal was a one time, short term offer. Acting quickly, the Friends Board approved spending the money to purchase the locomotive.

No. 261 was restored and operated out of shops on Harrison Street in Northeast Minneapolis. That’s close enough to the 55418 to hear her whistle. But there will not be any whistling for a while.

The last excursion pulled by No. 261 was back in September, 2008. Then she was up for bolier recertification, which will require significant restoration:

We had to use much of the cash we had originally earmarked to rebuild 261 on the purchase, which means we now do not have enough money on hand to complete the rebuild. While crews will resume work on 261 immediately, the Friends now must also concentrate on raising the funds necessary to complete the work.

The Friends RHMA owns some beautiful rolling stock in addition to their locomotive. They’re still operating excursions, but pulled by modern power.