ABOVE: On May 11, 2013, the 261 arrives at Cambridge, Minn., for the first service stop. The train consisted of 14 cars including four full-length domes. RIGHT: Number 261 steams across the ex-Great Northern bridge at Sandstone, Minn., halfway to Duluth on May 11, 2013. JEFF TERRY PHOTOS


longtime home base – and dismantled. With the lease between the National Railroad Museum and the Friends of 261 set to expire in November 2011, ne- gotiations for an extension commenced in 2008 between the museum’s board of directors and Steve Sandberg, Chief Operating Officer of RHMA. From the beginning the talks were plagued with issues. The museum asked for substan- tial increase in annual rent payments in addition to other concessions, and specified a lease period of ten years rather than 15. Facing a $600,000 price tag for the overhaul, and with the prospect of not being able to use 261 for the full 15 years, RHMA found the new agreement “unworkable,” according to Sandberg. Negotiations broke down and eventually led to a very bitter – and very public – feud between the mu- seum and RHMA. Repair work to the locomotive ceased. In November 2009 negotiations ended and it was an- nounced that 261 would be reassem- bled and returned to Green Bay as a static display.


A bizarre series of events followed. Despite calling No. 261 the “center- piece” of its collection, the National


60 JUNE 2013 • RAILFAN.COM


Railroad Museum offered it for sale via equipment broker Sterling Rail with a price tag of $225,000. In February 2010 it was publicized that the 4-8-4 had been sold to a California-based busi- nessman and collector, but the deal fell through less than a month later. Fol- lowing this, and faced with increasing- ly negative publicity over its handling of the situation, the National Railroad Museum contacted Sandberg’s group with an offer to sell them 261 at the same price. The deal was accepted and a purchase agreement was signed in May 2010. No. 261 was now the proper- ty of RHMA.


The rebuild quickly resumed despite


the fact that much of the money ear- marked for the overhaul had gone to- wards 261’s purchase price. In order to raise the needed cash RHMA continued to


offer


excursions, using borrowed Southern Pacific 4449 in 2009 and Am- trak diesels in subsequent years; other funding came in via donations. During July 2010 the 261’s wheels were removed and sent out for quarter- ing and to have their steel tires turned. Because the main driver had worn to an oval shape, a custom-built 450-ton press was used to pull the main driving axle from the main drive wheel for in- spection and refitting; the driver was repaired and pressed back onto the axle


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