Minneapolis officials have reached a compromise with BNSF Railway over the company's abrupt decision last year to expand tracks in northeast Minneapolis, cutting through some backyards and possible city land in the process.

After an outcry from neighbors, the railroad agreed to build a sound barrier atop the new three-block-long retaining wall it erected alongside a new track south of its Northtown Yard terminal. That barrier, built several months ago, is one of the conditions of a settlement approved by a City Council committee Tuesday.

The dispute began last fall when BNSF suddenly planted stakes showing its property line traveling through private yards and land claimed by the city. Because the company is not subject to the public process required for other transportation projects, it wasn't long before the railroad removed some yard fences and a tree barrier that shielded homes from the 75 trains that pass each day.

Several of those property owners are still negotiating with the railroad to reach agreements on their future use of the BNSF land for existing sheds and landscaping improvements, likely through a lease or conveyance.

"The sound wall I think was our biggest victory," said Kaline Sandven, who lives next to the project. "It's not trees, but it's better than nothing."

Dennis Rusinko, who lives across the street, said the new sound barrier will help reduce noise but can't replace what used to be there. "When you take trees away and shrubs away and flowers and things like that … there's no comparison between that and a wall," Rusinko said.

A new retaining wall and 5-foot wooden sound barrier have been erected in place of trees in northeast Minneapolis.

The settlement with the city allows both entities to continue claiming ownership over a disputed piece of land alongside a city cul-de-sac. But BNSF agreed it would be responsible for any damage to the city's infrastructure there — such as a sewer pipe — as a result of the project.

"We sat down with the city and we came up with an agreement that essentially protects everybody's interests and allowed the project to move forward," said BNSF spokeswoman Amy McBeth.

"Guns were drawn and guns were holstered," said Council Member Kevin Reich, who represents the area and chairs the city's transportation committee, which approved the settlement.

McBeth said they have also talked to property owners about a stipend to help plant new trees.

"Once we resolve the issues with that land, where there are encroachments … if they want to plant trees on their property in that area, that's something we'll work with them also to do," McBeth said.

City ownership unclear

The city's research over the right-of-way ownership reached all the way back to the 1803 Louisiana Purchase, when the U.S. government first acquired the property, said Assistant City Attorney Robin Hennessy.

Records showed that the city's right of way was established before the railroad received a land grant for its corridor, she said, and there is no evidence that ownership was formally transferred to the railroad.

The question was "whose rights are superior, the railroad's or the city's right-of-way interest?" Hennessy said. "And that was not resolved."

The work on the wall and sound barrier was completed last year, and McBeth said trains have been using the new track since January. The expansion widens a bottleneck south of the Northtown Yard terminal, easing freight traffic congestion there. BNSF moved forward with the new track after a previous plan to divert trains south in Crystal was derailed by Hennepin County and the Legislature.

"At this point, I'm very thankful for just even the ear that the city lent us," Sandven said.

Eric Roper • 612-673-1732

Twitter: @StribRoper