(rshsdepot) Keokuk, Iowa

["Jim Dent" <james.dent_@_itochu.com>]

-From the Daily Gate City (Keokuk, Iowa):

Railroad's plans for depot off track

By Steve Dunn/Gate City Managing Editor

A railroad subsidiary's plans for the Union Depot in Keokuk got sidetracked
Thursday.

B. Allen Brown, chief operating officer of the Keokuk Junction Railway Co.,
decided not to announce the plans when Keokuk City Council members expressed
reservations during the workshop preceding the regular council meeting.

The Keokuk Union Depot Company, a wholly-owned subsidiary of the Keokuk
Junction Railway Co., was ready to unveil a four-part plan for renovating
and using the 1906 Union Depot overlooking the Mississippi River in Keokuk.
The depot is owned by the KUD.

KUD is an Iowa corporation that has been in operation in Keokuk since 1890,
according to a draft of the news release obtained from Brown.

Under the proposed plan, KUD would pursue a public offering of a
newly-formed Class B common stock. One hundred percent of the proceeds would
be used to renovate the Union Depot. The stock offering would be a
Regulation D, Rule 504 exempt offering to raise a total of $500,000.

Within 30 days of the release, KUD would begin accepting "indications of
interest" on a minimum subscription of $250,000. Subscriptions could come
-From individuals, businesses, corporations, foundations and governments.

Once KUD received an adequate level of "indications of interest," the actual
subscription process would begin. Proceeds would be collected and put in an
escrow account until $250,000 of subscriptions were reached. When escrow was
broken, renovation work would begin immediately. A railroad-community leader
partnership would be formed to promote the stock offering and renovation
efforts.

Second, the Keokuk Junction Railway Co. would be responsible for the costs
of the Class B stock offering, meaning 100 percent of the funds raised would
be available for renovation. KUD also would ask the city to furnish
utilities, more lighting and other work as well as security and police
protection. The railroad and its subsidiary would help try to obtain grants
to assist the renovation.

Third, the Keokuk Junction Railway Co. would lead the effort to turn the
renovated depot into a railroad museum with other shops, according to the
draft of the news release. Further, the KUD would work with Keokuk tourist
efforts to build a stronger program to attract more visitors to the city.

Fourth, the Keokuk Junction Railway Co. would start to plan a spring 2002
rail excursion tour starting at the depot and going across the Mississippi
River into Illinois. The 1 1/2- or three-hour trips would be held on
selected weekends next year and grow depending on ridership.

The Class B common stock would be offered at $100 per share with no minimum
or maximum. All proceeds would remain in escrow until the minimum
subscription of $250,000 was met.

The largest need at the depot is replacing the roof and gutter at an
estimated cost of $130,000, according to the railroad. The rest of the
minimum subscription would go toward stabilizing the building and replacing
windows.

The Keokuk Junction Railway Co. has started to assemble the resources for a
railroad museum to occupy part of the building and complement Keokuk's other
tourist attractions.

During the workshop, new council member Malcolm Mullin expressed concern
about the depot's ownership and who would be responsible ultimately. Brown
said the KUD would be the ultimate owner and the advisory committee could be
responsible for the depot after the renovation.

Brown also said the stock offering would be promoted extensively among the
railroad's 3,000 shareholders.

Council member Rodger Whitaker suggested that the railroad repair the
depot's roof first as a show of good faith. "We need a firm commitment that
the building will not go down," Whitaker added.

Brown responded that the city could help by contributing to the roof repair.

Other council members also expressed reservations about the railroad's
proposal.

Council member Susan Dunek questioned how the KUD is controlled. Another
council member, Roger Bryant, said although "no one here wants to be
perceived as anti-business ... it's (the proposal) just out there."

Brown also indicated the railroad has made little progress with its proposal
to establish a new rail yards away from the Union Depot.

A request from Pioneer Railcorp to extinguish the city's easement over a
portion of Valley Road is still in the Public Works Committee chaired by
council member Janet Fife-LaFrenz. The committee will discuss the latter
issue with County Attorney Michael Short at 3:30 p.m. Monday.

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