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Ely council tables trackage-rights agreement with Nevada Northern Railway after legal worries
Summary
After public concerns and legal caution raised by the city attorney, Ely City Council voted unanimously June 11 to table a consolidated trackage-rights agreement with the Nevada Northern Railway Foundation for further review; the agreement would have combined two prior contracts and carries a 20-year term and tax-credit implications.
Ely, Nev. — The Ely City Council on June 11 voted to table a proposed consolidated trackage-rights agreement with the Nevada Northern Railway Foundation after the city attorney and several council members voiced concerns about the agreement’s length and lack of an obvious early-exit mechanism.
NNRY President Mark Bassett told the council the draft would combine two existing trackage agreements into a single document and describes how a federal tax incentive known as the "45G" tax credit is allocated between entities. Bassett said the tax credit payment is imminent: "the 45G tax credit is going to be paid next month," and urged timely action.
City Attorney Chris Arabia said he was uneasy about the contract language. "Twenty years is a long time," Arabia said, adding that his concern centered on the apparent lack of a practical way to end the contract early if disputes arise. Councilman Terrill Trask also flagged the proposed 50-50 split of legal fees and the long term as points of risk.
Public commenter George Chachas earlier had pressed the council for more transparency around railroad management decisions and alleged the Railroad Management Board had bypassed City Council oversight in past transactions. "I want to know who oversaw the Railroad Management Board that gave testimony" about prior property transfers, Chachas said during public comment, urging that the Railroad Museum and its finances be brought back under council oversight.
Councilman Dennis Perea moved to table the trackage-rights agreement pending further legal review; Councilwoman Melody Van Camp seconded. The motion carried unanimously. City Clerk Jennifer Lee told the council the item would be reposted the following Wednesday because of Juneteenth holiday and staff scheduling.
The tabling halts a final vote that NNRY representatives said is tied to how federal tax credits are allocated and to long-standing operational agreements on multiple branch lines. Council members and the city attorney said they want more time to review breach/remedy language and to seek uniform contract terms that would permit the city to exit or resolve disputes without long, costly litigation.
