Presented, in part, from a report to be published in the December issue of the NMRA magazine:
Re-examination of Programs and Functions. We have looked critically at what we do and how we do it. As earlier reported, the Kalmbach Library is in the process of being moved to the California State Railroad Library to be administered there at the same or less cost than we have spent. With this our members gain access to the largest railroad library west of the Mississippi and one of the largest in the world. We are taking steps to insure a dedicated partial position to serve our members' research needs...and all of this at no additional cost to you. I will continue to report progress as we finalize arrangements.
Sometimes, changes in focus and priorities over time align with new opportunities in very favorable ways. We have entered such a time with our plans for the Gallery Exhibit and possible Library consolidation at the California State Railroad Museum (CSRM) as those decisions affect our Headquarters building in Chattanooga.
Thirty years ago, NMRA leadership had a vision to create a monument to model railroading. At the time, the vision was that a central headquarters building would be a strong signal to the membership. It would provide a location for the Howell Day Model Railroading Museum and the A.C. Kalmbach Library. The plan also included space for the day-to-day operations of the organization to provide member support for planned growth of a much larger world-wide organization.
Several alternatives were explored before the current location in Chattanooga, TN was chosen, primarily because of an attractively priced land parcel offered by the Tennessee Valley Railroad Museum (TVRM). A successful member fund-raising campaign allowed the NMRA to construct our headquarters and soon, NMRA had a headquarters building.
Fast-forward thirty years. The founding visions have not become a reality in the way that was planned, but have evolved with even better options. Over the period 2010-2012, NMRA and the CSRM jointly explored the exciting possibility of creating a Gallery and/or Museum of Scale Model Railroading. We now have an agreement to establish the Magic of Scale Model Railroading exhibit on the gallery level of the country's largest and most visited railroad museum, the California State Railroad Museum in Sacramento, California. It attracts over six hundred thousand (600,000) visitors each year while our HQ building typically has fewer than 100 visitors each year. CSRM has also expressed a serious interest in administering the NMRA library collections with the CSRM collection as a co-operative venture and to establish a joint researcher position to answer member research questions as we do today. This new and better plan will provide additional benefits for our members as they will all also become members of the CSRM Library and have full access to it.
In 2011, we developed a plan and started a fundraising drive for the gallery exhibit as a first step. The fundraising has been very successful and we have raised more than $500,000 in cash and pledges thus far. We have signed a contract for construction of the initial exhibits and the opening is planned for late 2014. One day, we can expand this exhibit into a permanent museum in different dedicated space as resources become available.
As a result of these positive developments, we now have a building that is underutilized and will become even more so after the Museum and Library are moved to CSRM. Our core operations will need significantly less space than we have today. We have been looking at options to address this reality.
In January 2013, the TVRM, our neighbor, approached us and asked if we might consider selling them the building. We did not solicit their request. They were aware of our developing plans with the CSRM. They are severely cramped for space as they expand their commercial operations and were looking to construct significant additional office and classroom space at their Cromwell Road location, adjacent to the NMRA. Acquiring an existing building would be of great benefit to TVRM. Their operations personnel are spread across the region and they want to consolidate into fewer and centralized locations. And as Jenny can tell you, nearly every day, someone wanders in to buy tickets for the TVRM!
The NMRA BOD discussed this exciting and unsolicited opportunity at the Winter 2013 BOD meeting and authorized the CFO to determine whether a mutually agreeable sale might be possible. After several months of negotiations, we arrived at a mutually agreeable price and set terms and conditions. In July 2013, TVRM presented a formal offer to the NMRA. The NMRA BOD accepted the offer, and the NMRA CFO was authorized to complete the transaction. TVRM is ready to complete the sale in a timely fashion. At press time we do not have a firm closing date, so watch for future announcements here or via the NMRA eBulletin or Infoblast.
NMRA still needs a central location to manage the organization's business, merchandise sales, membership records, the online archives, and some elements of the Library and Museum collections. We had previously investigated other options (lease part of the building to others or sell and lease back), but found none that were as attractive or met our needs to support the NMRA and its members as well as selling the building and leasing a variety of spaces that would meet our various needs.
But because of the quickness of the sale and our desire to not interrupt service, a new location was found in the Soddy-Daisy area of Chattanooga for our staff. We have opened this rented facility (at an annual cost less than operating the old building) and moved our staff there. Note the new address listed here and on our website; our phones remain the same. Staff is pleased with the new location, which is nearer other facilities, and is operating without interruption. We have a lot of transition work left to do at the old site but thanks to CFO Frank Koch and CAO Jenny Hendricks, all is running smoothly.
All HQ office functions (membership and Company Store, online archives, and Library surplus sales) and the Library and Museum collections will be handled at the new location. We can do this at a cost that is no higher than we currently pay to operate the building. There will be no change in our support of member research requests. The Company Store and on-line surplus book sales will continue uninterrupted. We will invest the sale proceeds to generate income for the NMRA in the future. This principal and income will help to strengthen our overall position, provide funds for future projects, and potentially delay the need for a future dues increase.
For TVRM, this offers an effective and efficient way to expand their office and operations capability without the headaches and delays of construction. It also gives them a more visible presence along Cromwell Road. You may read or hear of their fund raising campaign as they are expanding on several fronts. They have also purchased the parcel of property on the other side of our shared drive for additional expansion.
For NMRA, it offers significant flexibility as we change in the future. We can increase or decrease our leased space as our needs change. It gives NMRA greater fiscal flexibility as we will have liquid assets rather than a non-liquid asset. This flexibility will be important as we increase our marketing and communication to members and non-members alike.
For some of you, this news will come as welcomed. For years, members have asked, "when are you going to sell Headquarters?" For years, it has been the BOD policy that we do so when it seemed appropriate. In 1982, the world was different. Brick and mortar offices were the norm. The Internet and home computers were unknown or limited. Today, where you are is less important that how you function. Remember, for many years, we operated out of office manager Bob Bast's basement! We are not leaving Chattanooga. We are not moving the NMRA to California. The NMRA is not in financial trouble. So ignore those who tell you differently.
But for those disappointed by the news, I fully understand. The NMRA expended much effort and member donations in building and operating our Headquarters building. For over thirty years, we operated there. Yet, how many of you reading this have ever visited? And if you did, what did you see? The simple truth is that Headquarters never lived up to its promise or potential. It has become an expensive anachronism to operate but a valuable asset that appreciated over time. In fact, it was a wise investment. So whether disappointed, pleased or neutral, let me hear from you. But if disappointed, please tell me how many times you visited and why you feel we need stay. I hope you will all understand what we are doing and why.
In closing, much has been accomplished but much remains. We have a great crew in place working very hard for you and for our hobby. With your support, we will only grow stronger and better. Those are my thoughts; what are yours?
December Issue of the NMRA Magazine: