ADMINISTRATIVE REPORT
MEETING DATE: January 21, 2026 AGENDA CATEGORY: Report TO: Honorable Mayor and City Council
FROM: Jennifer M. Byers, Economic and Community Development Director DATE: January 14, 2026
SUBJECT: Update on Agreement 2021-142 with Union Pacific Railroad Company to Lease Sumner Station (Ward 2).
City Council Member referral to receive a report on Agreement 2021-142
RECOMMENDATION:
Staff recommends City Council review Agreement 2021-142 for consideration and direction with options noted below:
1. Take no action. Lease remains valid unless/until termination, and will automatically renew for another one-year term on June 24, 2026;
2. Direct staff to terminate the lease. City must provide Union Pacific a thirty (30) day notice to terminate;
3. Provide additional/alternative direction.
BACKGROUND:
At the January 7, 2026 City Council meeting, Councilmember Bashirtash made a referral for staff to report on the City’s current lease with Union Pacific for Sumner Station (Agreement 2021-142) for Council evaluation and consideration.
On May 5, 2021, City Council authorized the City Manager to negotiate a 12-month lease with Union Pacific and move forward with the necessary improvements/agreements to maintain the property for the negotiated lease period.
On June 16, 2021, City Council authorized the City Manager to enter into a 12-month lease and appropriate $130,000 for general maintenance of Sumner Station to avoid likely demolition of the building. Staff was also directed to return to Council with updates on negotiations with Union Pacific on private interest in purchase/redevelopment of the property. At the time, staff estimated that it would cost between $5-$8 million to rehabilitate the structure.
Accordingly, Agreement No. 2021-142 was executed June 24, 2021, between the City and Union Pacific Railroad for the City’s lease of the land. The initial term of the lease was for one year, but has automatically renewed each subsequent year (not in accordance with Council’s directive in June 2021) and therefore remains in effect. Although rent is waived, the City is liable for maintenance of the building and must release, indemnify and defend Union Pacific in the event of any losses, damages, injuries, or claims.
Since 2021, approximately $140,000 has been expended by the City with the majority of funding spent to secure the property with some staff time from our real estate division of the City Managers office.
However, various Departments (Police, Fire, ECD, and Code) staff time for time spent responding to the property are not included in the $140,000 estimate.
FISCAL IMPACT:
Fiscal Impact is contingent upon nature and scope of any future action proposed
COUNCIL GOAL:
Community Character & Quality of Life
ATTACHMENT:
06/16/2021 City Council Agenda item 12.b Deferred Business Executed Lease Agreement 2021-142