01-0430R

RESOLUTION AUTHORIZING THE EXECUTION OF A MEMORANDUM OF EASEMENT WITH THE DM&IR RAILROAD IN CONJUNCTION WITH ACQUISITION OF EASEMENTS FOR A NEW NATURAL GAS PIPELINE INTO DULUTH.

BY COUNCILOR ECKENBERG:

        RESOLVED, that the proper city officers are authorized to execute the memorandum of easement filed as Public Document No. _____________ between the Duluth Missabe and Iron Range Railway Company and the city to clarify and facilitate the recording of a 1986 easement agreement between the parties.



STATEMENT OF PURPOSE:  The city is in the process of acquiring additional right-of-way for the construction of a second natural gas supply main into the city. The city has hired ProSource Technologies, Inc., a right-of-way acquisition specialist company, to secure necessary easements. In 1961, a high pressure gas main was constructed on DM&IR right-of-way in Section 3, 48, 15 to serve Gary-New Duluth. The railroad was reluctant to grant the city a permanent easement and issued the city a license agreement that required the city to pay taxes on the right-of-way. Because of changes in railroad tax law, this became too expensive for the city. In 1986, the city and DM&IR entered into an easement agreement for the right-of-way that was executed by the parties but never recorded against the property (possibly at the request of the railroad). This agreement was for only nominal consideration ($1). The city now wants to expand the width of this easement, record this easement, and acquire additional easements from the DM&IR. As a first step, our acquisition company suggested the execution of the memorandum of easement to reaffirm the parties rights in the 1986 agreement and to facilitate the recording of the 1986 agreement. That is what this resolution accomplishes. A subsequent resolution will be brought to the council purchasing additional width for this easement and additional easements from the DM&IR necessary for the pipeline.