The Pikes Peak Cog Railway, whose future as an iconic tourist attraction has been in doubt since its closing late last year, will be rebuilt and reopened if its owner and the city of Manitou Springs sign a proposed agreement.

The cost to rebuild the railway could be close to $100 million, said Gary Pierson, president and CEO of Oklahoma Publishing Co., parent company of The Broadmoor hotel in Colorado Springs and the Cog Railway. The ownership group is seeking a pair of tax breaks from Manitou Springs but otherwise plans to pay for the project privately.

Pikes Peak Cog Railway - OutThere Colorado

Work on the railway could begin as soon as August with a reopening in May 2020, in time for the unveiling later that year of the new $50 million Summit House on top of Pikes Peak.

“This project is important to the ownership group, the state, the cities, the local economy and even nationally,” Pierson said. “We are trying to find ways to make it work. It is like buying a new car. How much do you put into making repairs on the existing car, or buy new instead?”

Over its 126 years, the Cog Railway took passengers on a scenic, 8.9-mile trip from a depot in Manitou Springs to the summit of Pikes Peak. In recent years, Manitou officials estimate, 300,000 people annually made the trek on the railway; their stops at stores and restaurants helped pump life into the city’s economy.

But the Cog closed in November for maintenance and never reopened. In March, Broadmoor President and CEO Jack Damioli announced that the aging railway had “run its useful life” and a study would be launched to consider whether to rebuild it or close it permanently.

That study, Pierson said, says a complete rebuild of the railway could cost $75 million to $95 million. The cost would include a remodeling, expansion or even demolition of the depot in Manitou; demolition and rebuilding of the track; and new material to improve leveling and stability.

The Cog also would decommission four of eight train cars and refurbish the other four, which accommodate 212 passengers each. The railway would buy three new, 240-seat cars and a new snowplow. The goal is to operate the railway year-round, Pierson said.

The Manitou City Council will hold a special meeting at 6 p.m. Tuesday to give initial consideration to an agreement with Oklahoma Publishing, ask questions and possibly propose changes. If approved Tuesday, another meeting and public hearing would take place June 26, during which the council would consider final approval of the deal.

Key provisions call for Oklahoma Publishing to pay $1 million to Manitou Springs from 2018 to 2019 to offset the city’s loss of tax revenue because of the railway’s closure. A city financial analysis says Manitou Springs stands to lose $600,000 a year – $500,000 from the loss of amusement taxes levied on the purchase of Cog tickets and another $100,000 in sales tax revenue.

Manitou Springs would amend its amusement tax ordinance and cap any taxpayer’s annual amusement tax payment at $500,000, although that provision likely would only apply to the Cog. That capped payment would increase by up to 1.5 percent every four years; monies collected above the cap would be kept by Oklahoma Publishing. The cap would remain in place for a half-century, assuming it’s legal under the Colorado Constitution.

“It will give us the incentive to invest $75 million to $95 million to do the project,” Pierson said.

Another key element of the agreement: Manitou would waive its use tax on equipment and machinery related to the railway’s rebuilding, which city staffers estimate could total $900,000 to $1.1 million.

Other provisions include:

– The Cog and Manitou will coordinate and expedite plans to renovate, expand or demolish the depot and related structures. The buildings’ architecture will maintain their historical appearance.

– The two parties will work to alleviate traffic congestion, including on Ruxton Avenue where the train depot is. Efforts might include a structure or deck to increase parking at Hiawatha Gardens. They’ll also work to prevent traffic congestion during construction.

– The Cog will donate historical rail-related items to a Manitou-owned Cog rail museum, an idea city officials have floated, Pierson said.

On Monday, Pierson, Mayor Ken Jaray and others appeared at an informal community meeting to discuss the agreement, answer questions and hear public comments. More than 60 people attended.

Hiawatha Gardens, where visitors park for free and take a shuttle to the Manitou Incline and downtown, could become a “transportation hub” where motorists leave their cars and get on a scooter, bike, Segway or bus to explore Manitou Springs, Jaray said. Decommissioned train cars could be used for a museum at Hiawatha Gardens, he said.

“I think we have some really cool opportunities to put together here,” Jaray said. “I’m excited about it.

“The main idea that we’re really trying to get out tonight is that we want this opportunity for the Cog to work for everyone – to work for Manitou Springs, to work for the Cog . to work for the region, and to work for the state.”

Several people at the meeting appeared to back the plan to restore the Cog.

“This is a very progressive, comprehensive plan, and I’m 100 percent in support of it,” said Doug Keithley Edmundson, proprietor of Keithley Pines Historic Cabins. “This means money in my pocket for the future of my family and my business and for a better quality level of tourism.”

But resident Kolleen Johnson said the Cog was looking to Manitou citizens to “shore up” its investment.

“It’s concerning to me that, unless you get this, you’re not going to make the investment. That’s business,” she said. “Business is risk. And there’s a lot of small business owners in Manitou in this room right now, and they know that.”

Pierson, however, said the stakes are high in the proposal.

“If we can’t justify this project, we’re hurt, but Manitou is hurt also,” he said. “It’s very much a two-sided equation. It’s not only what you’re getting. It’s what you’re not losing . The big picture is certainty for Manitou and longevity. It’s certainty and longevity for the Cog, also.”

The railway’s rebuilding has other hurdles to clear.

If Manitou officials sign the agreement, Oklahoma Publishing still must finalize contract bids and design work on the project, he said.

And Trump administration steel tariffs could send costs soaring and even kill the project, Pierson said. Steel rails that would be used to rebuild the Cog – one of the few railways of its kind in the world – are available only in Switzerland, he said, as are the three steel railway cars that Oklahoma Publishing says it needs to buy.

“At the end of the day, this is a tourist attraction, but it is also a business,” Pierson said. “This plan passes muster by a narrow (profitability) margin, and there’s also a historical perspective. This is important to Manitou, to Colorado Springs, to the state and to the nation. That’s not lost on any of us.”

Oklahoma Publishing and The Broadmoor are owned by the Denver-based Anschutz Corp., whose Clarity Media Group owns The Gazette.

The Gazette’s Wayne Heilman and Vince Bzdek contributed to this report.

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