Union Pacific agrees to sell right of way to city for $1.6M

For more than 110 years, McNeil Road has served as a conduit between the cities of Austin and Round Rock. Until recently, however, the ownership of the property the road sits on has remained unresolved.

On March 28 the city of Round Rock put the issue to rest when the city signed an agreement to purchase more than 15 acres of right of way adjacent to McNeil Road and the downtown area from the Union Pacific Railroad Co. for $1.6 million. The agreement resolves an ongoing legal dispute over who owns the rights to the property and whether the railroad held the power to charge the city lease fees for using McNeil Road.

"I think all in all this is a win-win for the city and the railroad," Round Rock City Attorney Steve Sheets said. "The amount of land we are getting for what we are paying is significant."

Nearly 140 years ago the now-defunct International-Great Northern Railroad laid out the path for the still-existing railroad right of way that runs east and west through Round Rock and ties into Austin and Hutto. In the 1890s the current layout of McNeil Road was established parallel to the tracks and operated unimpeded for 90 years.

According to city records, in 1987 Round Rock officials discovered parts of McNeil Road may have sat within the right of way of the railroad tracks—which by that time had been taken over by Union Pacific. Rather than spend the money to research who owned the title to the land, Sheets said the city agreed to pay Union Pacific $3,495 for a 25-year lease. When the lease expired in 2012, however, Union Pacific sent a letter to the city requesting more than $4.9 million for a 25-year renewal.

The city reacted to the demand of payment by filing a lawsuit against Union Pacific in the Williamson County District Court, claiming the railroad had lost all rights to the land through statutes of limitations. Union Pacific filed a countersuit, and the issue remained tied up in litigation until the deal was announced in March.

As part of the sale, Union Pacific agreed to hand over the title to 11.76 acres of land containing 2.5 miles of the McNeil Road right of way, 0.26 acres of land adjacent to Chisholm Valley Park, 0.66 acres of land containing a 954-foot span of Bellview Avenue, and a 0.41-acre tract adjacent to the former Gypsum Supply plant south of downtown. In addition, Union Pacific signed a revocable deed over to the city for a 1,900-foot, 1.13-acre section of Park Lane that provides access to Lake Creek Park. The deed is expected to remain in the city's possession unless the railroad ever feels the need to add another line of tracks, Sheets said.

Sheets also said Union Pacific has agreed to donate $100,000 of the proceeds from the land sales toward a memorial marking the 1927 bus crash that killed 11 members of the Baylor University men's basketball team.

"Union Pacific has always had a great working relationship with the city of Round Rock, which helped us work through some complex real estate issues," Union Pacific spokeswoman Elizabeth Hutchinson said. "The agreement approved by the city benefits both parties and the community as a whole. We appreciate the city leadership's efforts and look forward to working with them in the future."

A final caveat of the deal that had nothing to do with land rights involves the city's push to establish railroad quiet zones at several crossing points. Establishing the zones—which requires the consent of Union Pacific—normally can take years. Union Pacific, however, consented to expedite Round Rock's application in lieu of the land agreements.

"This community has been working for many years to establish quiet zones throughout Round Rock," City Manager Steve Norwood said. "It is not uncommon taking three, four, or five years getting quiet zones approved. So if we can shave off a year or two and basically get to the front of the line, I think it will go a long way towards building some goodwill in the community."