What's the next step for the Stewartstown Railroad?
Two groups are interested in buying the debt the railroad owes an estate.
By JEFF FRANTZ
Daily Record/Sunday News
Posted: 04/24/2010 08:05:11 PM EDT

New players have entered the discussion for the future of the Stewartstown Railroad Company.

For more than two years, the estate of George M. Hart has been trying to collect a debt of more than $350,000 from the 125-year-old company. Deadlines have passed, and been extended, and the estate is now listening to offers from groups looking to buy that debt, a lien on the railroad's station and engine houses.

At the same time, a nonprofit is trying to raise money to preserve the 7.4-mile railroad and help company shareholders resume running tourist trains on the line that has not operated since 2004.

Hart, a former president of the railroad, paid the company's bills with his own money for more than 20 years. In 2006, he asked the railroad to sign a lien, requiring repayment of that money. After his death in 2008, the company learned that in his will, Hart specifically reminded his executors to collect the sum, $352,415. That money and other parts of the estate will eventually go to the Bucks County Historical Society.

Company board members have presented a plan to repay the debt over time, but so far neither the estate nor the historical society have favored those ideas.

"Two different parties have expressed interest in the possibility of buying the mortgage lien from the estate," said Jim Gillotti, the estate's attorney. He would not name either party, but said both are from York County.

"Nothing has been finished yet," Gillotti said. "We're hopeful that we can work out a deal with one of them because the proposal that was made by Stewartstown to pay off the debt over five years -- the terms were disappointing for the estate."

Dave Williamson, president of the Stewartstown Railroad Company, said he knows of two potential buyers for the lien -- the Codorus Creek Railway and a real estate developer.

The Codorus Creek Railway would like to rebuild the Stewartstown Railroad from the rails up to run freight cars, said company president Don Kress, who confirmed they have had talks with the estate.

The Codorus Creek Railway has previously asked the county to lease the Northern Central line, which runs next to the Heritage Rail Trail, for a freight operation. The county has denied them, but Kress said they are continuing with the effort. Having a connection for Stewartstown to New Freedom makes sense, he said.

"We've got hundreds of acres of industrial zoned land in southern York County," said Kress, who added that further development will require shipping ability.

Williamson described the other potential buyer, the real estate developer, as a "white knight figure" who he feels would work with the Stewartstown Railroad to preserve the railroad, resume operations and repay the debt on a more favorable timeframe.

Buying the lien would not give someone control of the company, Williamson said. But a lienholder would have the ability to foreclose on the debt, which might bankrupt the company.

As this plays out, the Friends of the Stewartstown Railroad had begun accepting donations on its website for the preservation of the railroad. The Friends are a nonprofit closely aligned with the company; some people sit on the boards of both groups.

The friends hope to soon start a full capital campaign, Williamson said.

PrrOpCrew (John F.): I noticed you are a new member of the RYPN bulletin board. Are you the same person who is Vice President of Codorus Creek Railway?