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MT PROPERTIES, INC. 2380 WYCLIFF STREET ST. PAUL, MINNESOTA 55114 SUITE 100 October 19, 2010 Grant Fernelius Community Development Director City of New Brighton 803 Old Highway 8 NW New Brighton, MN 55112 Dear Grant: (651) 646-6564 FAX (651) 646-8548 CITY OF NEW BRIGHTON OCT 2 0 2010 DEPUTY REGISTRAR #163 This is in reference to our discussion yesterday concerning the proposed wye track at New Brighton. We have looked at every option we could think of with the CP and Minnesota Commercial Railway Company to try and find a way of reducing or eliminating the cost of the land lease and maintenance. It became clear that because the CP would not receive any significant benefit for this new facility that they were going to treat it as a straight business deal. This meant that the cost of land lease would be at a cost typical of this area. The maintenance cost would be for normal FRA required inspection and the cost of repairing defects which would be few if track wasn't being used. For the Minnesota Commercial it would receive no benefits unless the coal train returned which at this time is an unknown. With that in mind they could not justify paying additional cost of maintenance or lease charge for the switch. With these circumstances it is obvious that unless the city of New Brighton is willing to be responsible for the annual cost of land lease and maintenance which will be in the area of $4,500 to $5,000 annually the project cannot move forward. Grant, we have all spent a lot of time and money trying to put this project together to the benefit of all concerned. It is unfortunate that the coal trains are currently not moving and future trains are doubtful. From M T Properties' perspective I would suggest that we not proceed with the wye project and that the City of New Brighton so notify Minnesota DOT of that decision if your concur. Sincerely Li lal4a-t----- Executive Vice President LIL:Ia C: John Gohmann