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Elko council approves pursuing up to $7.5 million purchase of Union Pacific right‑of‑way, with conditions
Summary
The City of Elko voted to authorize staff to pursue a conditional purchase with an aggregate value of up to $7.5 million for about 78.253 acres of Union Pacific right‑of‑way, subject to surveys, a feasibility study, conveyance documents, federal approvals and other conditions; council and public speakers emphasized redevelopment potential and concerns about tenant lease increases.
The Elko City Council on June 24 authorized city staff to pursue a conditional purchase and sale agreement for approximately 78.253 acres of Union Pacific Railroad right‑of‑way within Elko, with a proposed aggregate value of up to $7,500,000, subject to completion of required surveys, a feasibility study, conveyance documents, governmental approvals and other conditions spelled out in the PSA.
City staff said the parcel consists of two areas — about 28.426 acres on the west end (Area A) and about 49.827 acres on the east end (Area B) — and described benefits that would follow a successful acquisition, including removal of blight, the ability to build roads and sewer, and the potential to parcel and sell land to private owners to broaden the local tax base. A city staff member told the council the transaction is complex and will require additional work before closing, including updated surveys, completion of exhibits to the PSA and a federal lands bill to transfer title.
“I feel like that maybe we're rounding second base, approaching third base,” the chair said in support of continuing the acquisition process, urging the council to move the proposal forward while acknowledging there are multiple hurdles ahead.
Private commenters and tenants urged the city to move quickly. Dusty Shipp said tenants along the rail right‑of‑way are already seeing lease increases and asked whether the area could be expanded to include parcels he occupies; the council and staff said expansion was discussed but that financing and active rail spurs limited immediate additions to the proposed A and B areas.
City staff outlined the conditions that must be satisfied before closing, which the PSA lists as: agreement on the purchase price; completion and inclusion of updated surveys; completion of a feasibility study; preparation of conveyance documents by Union Pacific in a form satisfactory to the city; approval of a final PSA and exhibits by an authorized UP official; receipt of any governmental approvals required for the transaction; and payment authorizations in specified amounts described in the PSA. The council added that any further negotiation or inclusion of additional parcels could be pursued with UP management but emphasized the process will take time — possibly years — because of the need for federal legislation to complete title transfer.
A staff member described a likely plan of parceling and resale, where the city would not retain long‑term ownership but would prepare parcels for sale to private owners and give existing tenants first‑opportunity mechanisms as warranted by statute. Staff said environmental due diligence and appraisals of individual parcels will be required before any sale.
Councilors voted to approve a motion authorizing staff to communicate the proposed aggregate value and conditions to the Union Pacific Real Estate Group and to seek formal management approval by UP, with the vote recorded as a voice vote in favor.
Next steps: staff will coordinate updated surveys and the feasibility study, continue negotiations with Union Pacific real estate representatives, and pursue the additional approvals and documentation specified in the PSA. Any final sale or parceling of land will follow the city’s due‑diligence process and any required federal or state approvals.
