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 Post subject: The continuing saga of the Texas State Railroad
PostPosted: Fri Feb 10, 2017 1:29 am 

Joined: Wed Feb 16, 2005 11:17 pm
Posts: 252
Location: Houston, TX
From today's Palestine Herald Press

Railroad authority negotiating with other entities
Michael Maresh 2 hrs ago
Texas State Railroad

The future of the Texas State Railroad remained in limbo after Thursday's Texas State Railroad Authority meeting.

The board wants to sever ties with Iowa Pacific, the railroad's owner, and either go with another entity to run the railroad or have a local entity take it over.

Taking it over means the cities of Palestine and Rusk would have to find a way to raise $700,000, which would be close to impossible.

Former railroad employees terminated back on Dec. 30 have not been given their jobs back, though Iowa Pacific said it wants to rehire them back by the end of March.

After more than an hour-long executive session, the board announced it wants to negotiate with another operations entity.

“The board would like employees to know we have had discussions with two operators and have been contacted by others, and we are working quickly to resolve this,” said board member Steve Presley, who also serves on the Palestine City Council.

Board attorney Ron Stutes is negotiating with potential future operators, with the hope something could be rectified soon.

“It seems to be close,” said Chairman Bob Goldberry, who is also the Rusk Economic Development director. “It is down to the details. It is progressing rapidly.”

Board member Hugh Summers said a lot of things are happening, adding a lot of the details will be released at next week's meeting.

The question the board remains unsure of is, will the railroad season start March 4? IP has been maintaining it will for more than a month.

“We have to get control first,” Presley said. “There are so many questions right now.”

When asked if IP would give up its control of the railroad, Presley said the incentives to do so would likely entice it to walk away. The incentives are the board forgives the company's lease payments and debt.

“They have the ability to shut us down,” Presley said.

The hope is that the board will have this resolved by the time the season starts in about three weeks.

One company, American Heritage, has told the board that operations could resume in as little as two weeks once local entities take control.

“We have to do it as quickly as we can,” he said.

After the railroad board meeting, Presley attended the Palestine Economic Development Corp. board meeting to fill them in on possibilities.

The options were to have local entities to operate the railroad or to have an outside entity take over the operations.

“We have leased stuff back to operators, and that worked OK,” Presley said before telling the economic development board the railroad board is negotiating to “get (Iowa Pacific) out.”

“If we wanted to take it over, it would take $700,000,” he said.

Another potential pitfall is this money that would be needed is long before the Polar Express tickets are sold, he said.

Even if Rusk were to participate, the bulk of the money, if this is the decision, would come from Palestine.

When asked by the EDC board if the railroad is profitable, Presley said there is a slight profit for tourism and a larger profit for freight.

“To be operational long-term, you need both,” Presley said. “That possibility is out there should we go for that.”

Presley's comments to the EDC board were meant to get their input.

When asked if the state could be the operators, Presley said it would not and would, instead, close it.

One benefit in keeping it local is that the railroad can be operated the way the community wants. Another benefit would be employing more people.

A decision needs to be made soon, partly because the experienced workers laid off will land other jobs.

“We can't wait,” Presley said. “It will be very bad public relations, if we don't open until the summer. Either way, the railroad will be here.”

After Presley left the EDC board meeting, TSRA board member Ben Campbell said it had trouble with contractors or operators in the past, and the agreement with IP was like a shotgun wedding to keep the railroad going.

Campbell said the railroad has the employees, administrative policy and a top-notch general manager, but do not have the necessary funds.

“The way it is now, the operator has complete control,” he said. “The contractor is trying to squeeze every nickel out of it.”

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