LANCASTER — The non-profit Mount Washington Observatory filed a lawsuit in Coos County Superior Court on Monday against the Mount Washington Cog Railway, alleging that the 1869-built mountain railway broke a 2009 agreement to pay the Obs a dollar for every passenger it takes to the summit in exchange for free admission to the Obs’ Summit Museum.
In its suit, the Obs also asks the court to force the Cog to refrain from further efforts to “harass the Observatory based on false claims of land ownership or other supposed restrictive covenants.”
The suit was filed by McLane Middleton Professional Association of Manchester, the law firm of longtime Obs trustee Jack B. Middleton of Freedom.
Contacted by the Sun Wednesday, Obs Executive Director Sharon Schilling and Cog owner and president Wayne Presby each had countering views on which party broke the 2009 agreement first.
According to Schilling: "The Cog broke a contract agreement they have with us dating from 2009 in which they agreed to pay us $1 a visit per passenger to the summit. The Mount Washington Auto Road is a secondary signatory to that agreement as they agreed to pay us $1 for every adult passenger visitor to the summit. The Cog stopped paying us in 2016.
“We tried to negotiate with Mr. Presby but to no avail,” she added. "We see no other recourse than to go to court for this.”
The Cog's suit says the agreement was in place for five years and is subject to three automatic five-year renewals unless the parties exercise termination rights. It adds that after the Cog stopped paying in 2017 it did not “provide written notice to terminate” the museum agreement.
Quoting figures release by Presby at past Mount Washington Summit Commission meetings, the suit says the Cog averaged more than 100,000 visitors in 2017 and 2018 and is expected to continue to draw that kind of business for this and coming years.
“So, that’s 200,000 at $100,000 each for 2017 and 2018 that the Cog has not paid, and he has no intention of paying us this year,” said Schilling.
The agreement concerns funding for the Obs’ Summit Museum, which was opened in the state-owned Sherman Adams Building in 1980 in the 60-acre Mount Washington State Park.
It was upgraded in 2014 after a $1 million capital campaign that transformed the facility through renovations into the “Extreme Mount Washington” museum.
Normal admission is $2 but per the agreement, adult customers arriving via the Cog and Auto Road are allowed free admission as part of their overall ticket.
Schilling says the 2009 agreement was signed by the Cog, the Obs and Auto Road and was a key financial component of making the summit project viable.
Now the lack of revenue is affecting Obs operations, she said.
“As a non-profit, we rely on our partners whomever we enter into a contract with to honor those contracts, and when someone doesn’t paym there are implications for the Obs doing business on top of the mountain. It’s an expensive endeavor to do what we do,” said Schilling.
Presby takes a different view.
He said he stopped paying after he found out from an Obs 2016 email they were not charging all visitors to enter the museum.
“We didn’t breach until they did,” said Presby, who is an attorney. “They were supposed to be charging everyone (who wasn’t a Cog passenger or Auto Road adult), but then by their own admission in an email they said they were not charging hikers or anyone else.
“Under the terms of the agreement, we were supporting the State Park and some of the funds for state improvements, but then when I found out about the hikers and everyone getting in for free, I said I don’t mind helping out but you need to charge everyone else coming here, too, and they never did that," he said.
"I gave them notice in February 2016, and they said that will really put a fix on our budget, so I said OK, I’ll continue to pay but then the deal is off for 2017,” Presby told the Sun on Wednesday.
Presby has long had issues with the Obs’ use of the space it leases in the Sherman Adams Building for its overnight EduTrips program, saying it violates an 1894 agreement that the railway and state had that, Presby contends, gives the railway “exclusive rights to house and feed overnight guests.”
The Obs counters that since it was not founded until 1932, it was not party to that 1894 agreement, a ruling the state Attorney General’s office determined in a report to the Mount Washington Commission in 2018.
Presby countered: “Whether or not they were in existence then (in 1894) is immaterial as these are easements which they need to abide by. Now the result of all of this is this is we will be getting into a quiet title action to resolve all of these easements under the 1894 agreement.”