The Commission to Reconstruct the V&T Railway is ready to play hardball with the current operators of the train.
The commission voted unanimously to approve Chairman Bob Hadfield's suggestion to negotiate "in earnest" with Bob Gray, who owns and operates the tourist train that runs from Virginia City to Gold Hill, until the next meeting.
"We will try one more time to reach an agreement with the Grays and answer once and for all how are we going to get to Virginia City; then we need to play hardball," he said.
Hadfield accused the Grays of being unresponsive to overtures by the commission.
"I think it's very important now to point out we're at a critical stage because we need to know where our railroad begins and ends," he said. "Clearly our part is just between Gold Hill and Carson City."
He said there had been discussions between commissioners and members of the Gray family but had seen nothing in writing from the Grays. He said there was no point in talking to Sierra Railroad until something is worked out with the Gray family.
Sierra Railroad, of Sacramento, was awarded the contract to operate the V&T by the Nevada Commission for the Reconstruction of the V&T Railway in late 2006. The company operates the excursion Sierra Railroad Dinner Train in Oakdale, Calif., and the Sacramento River Train.
A March 1996 contract promises the Grays operation of the railway for the first two years after its completion. It also has provisions for leasing the track to another operator or allowing the commission or other operator to buy the railroad outright.
Tom Gray, Bob's son, denied that the family had not responded. He said no formal offer was given.
He said he offered a lease arrangement to the commission and was given an offer he didn't like. He said he didn't respond in writing but told Hadfield verbally that he didn't like the offer they made.
Hadfield said there were several meetings with Bob Gray where options to either lease the track, form some sort of partnership or buy the railroad were listed, and Bob Gray wanted to think about it. Hadfield said the Grays were asked to come back with a written proposal and never did.
He said the commission elected to go with Sierra Railroad despite the current contract with the Grays because they believed the former could meet the needs of a Carson City to Virginia City railroad in ways the Grays could not.
"We didn't know whether they would have the capacity to accomplish those needs to operate the kind of train to the standards that we wanted," he said.
He said the agreement made in 1996 was done before the commission had any funding and before they realized what it would take to run the train from Virginia City to Carson City.
Hadfield said the current contract could be canceled because it doesn't go into effect until the rail reaches Carson City.
"Things have changed, and our needs have changed," he said. "There's no value. No one is out anything."
Hadfield said the destination points should be Virginia City and Carson City, not Virginia City and Gold Hill, and the way to do that is to cancel the contract with the Grays so that a contract with Sierra Railroad can be negotiated.
"We can't just continue to go on and negotiate a contract with one operator and have an existing contract with another operator," he said. "We were negotiating an agreement that is in direct conflict with an agreement we already have and that makes no sense."
Hadfield said they can't just use the Grays' tracks because the tracks need upgrading and the commission can't spend public money to benefit a private business.
Tom Gray said his family has run the train for 32 years and the commission agreed to have them operate the railroad, but now just wants to get rid of them.
"The operating agreement doesn't seem unreasonable to me," he said. "I don't know what you mean by 'hardball.'"
Gray said the operating agreement allows the commission to use their rail lines and gives them the right to use the name for fundraising purposes.
He said the commission has never made a formal offer to purchase the railroad.
"We're the whole reason they're here," he said. "They want to take our business from us. But I think it will work out somehow."
Gray said 25 percent to 30 percent of Virginia City's visitors come to the Comstock just to ride the train, and each spends about $40.
"We've been bringing $900,000 a year here for 32 years," he said.
• Contact reporter Karen Woodmansee at kwoodmansee@nevadaappeal.com or 882-2111 ext. 351.