Editorial: Another reason to restructure rail foundation

Published: Monday, Mar. 4, 2013 - 12:00 am | Page 11A

The California State Railroad Museum Foundation, a cooperating association in the California State Parks system, is claiming victory in the arbitration decision over its 2011 firing of one of the nation's pre-eminent rail historians.

The foundation board had unanimously hired Peter A. Hansen in April 2011 to lead the effort to raise $50 million and design the long-awaited Rail Technology Museum in two historic Central Shops buildings in the downtown railyard. Hansen had been a consultant to museums nationwide, exhibit curator, collaborator on award-winning documentaries, a popular speaker and editor of the scholarly journal "Railroad History."

The new museum would be expected to "break new ground in the museum community," according to the museum consulting firm, West Office Exhibition Design – combining "high tech, interactive exhibits of a science museum with the authentic, behind-the-scenes experiences of an industrial tour, all in a historic setting."

Unfortunately for Sacramento and the California State Parks system, things began to fall apart the day Hansen reported to work on July 5, 2011. The foundation presented him with a totally new contract – after he had already sold his home in Kansas and bought a home in Sacramento. When he declined the new terms, a divided foundation board then fired him and several board members resigned.

Now an arbitrator has ruled, according to Hansen, that he acted reasonably when he relied on the original April 2011 contract with the foundation. Further, the arbitrator ruled that the foundation should have told Hansen before he left Kansas that it expected him to sign a new contract when he started working. As Hansen told The Bee's editorial board, "Justice required the foundation to compensate me for the time and trouble I incurred, and I'm satisfied with the outcome."

Rail foundation vindicated?

For its part, the foundation says it is "pleased by the arbitrator's decision that vindicated the board's actions – and are glad to have this issue behind us."

Neither side would say just how much the arbitrator awarded Hansen.

This is no victory for the foundation – or the Rail Technology Museum project that California State Parks has worked mightily to get back on track. The foundation lost 21 months, but the real impact is that major donors and corporate funders in transportation circles nationally know all about this – an impediment to future fundraising.

Fortunately, the new State Parks director, retired Maj. Gen. Anthony Jackson, has made the Rail Technology Museum project a priority. He has started by assigning an in-house project manager, civil engineer Daniel Millsap. State Parks long ago lined up $15.7 million in federal grants and state Proposition 40 and Proposition 116 funding for the renovation of the two Central Shops buildings.

Chicago-based Inland American, the real estate investment firm that owns the railyard, and State Parks still need to close on the two historic Central Shops buildings and hand over title in a key land swap. Last March, a signing was expected "within weeks." It still hasn't happened. Escrow has been extended yet again until June.

Capital campaign a hurdle

With the arbitration decision over, this project is at a critical juncture.

The biggest undertaking remains finding a strong partner who can gear up for a $50 million capital campaign. The foundation has said that it is "committed to supporting construction" of the new museum and that "early planning is important," but it will not begin public fundraising until the ownership issue is settled.

The real issue, however, is: Can State Parks really rely on the foundation, which has had major missteps that cannot simply be brushed aside?

A sign of the depth of the problem is the pessimism expressed by Bill Withuhn, former curator of transportation for the Smithsonian's National Museum of American History. He told The Bee's editorial board, "After years of delays, I believe the historic Central Pacific shop buildings in the railyard are now in serious jeopardy." Withuhn resigned from the CSRM Foundation board in August 2011 after Hansen was fired.

With aggressive fundraising and first-rate design, the new museum could be a national asset and a boon to railyard development. For Sacramento, it could be a key part in creating a critical mass of high-quality cultural attractions, along with the Crocker Art Museum expansion and upcoming Power House Science Center along the Sacramento River.

State Parks has a major task ahead in restructuring the CSRM Foundation, and has leverage since the foundation's 1999 cooperating association agreement must be updated, and repairing relations with the larger community so this landmark project can proceed.

The Bee's past stands

"The CSRM Foundation, celebrating its 25th year, has been a great asset and can be again – if it steps up to the challenge of an overhaul. The current dysfunction should not continue."

– Nov. 16, 2012

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