Sigh.....OK, some irrational individual decides to somehow get the debt off the table and satisfy the society and the estate.

Now, what's the likely progression of the future of the railroad?

It's a proven money pit with lots of political and logistical problems that has demonstrated its inability to fund its own costs and reach sustainability, much less prosperity.

NOBODY has presented a plan with enough support to demonstate anything to the contrary in opposition to the petition for abandonment, which seems to me to prove it isn't realistically possible.

Anybody with a concrete supportable plan that will change that hasn't materialized, and there's been more than enough anguished wailing and gnashing of teeth over this that if any such plan was realistic, it would have come to light by now, and generated enough support to at least make a show of an attempt.

So, let's stop whining and document what we can while we can, then work on preserving what has a chance of being sustainable and useful.

dave

The railroad company made a presentation two years ago to the heirs of the Hart Estate asking that they consider receiving a five-year note in lieu of the cash. At the end of the five year period, if the note had not been satisfied the railroad company would agree to being dissolved to satisfy the debt. The heirs of the Estate declined the offer.

...And the Conman of Cockeysville has been heard from:
http://www.stb.dot.gov/filings/all.nsf/ba7f93537688b8e5852573210004b318/318d46f301651df185257abc0057d719/$FILE/233373.PDF
We have now come full circle to the north end of his original Northern Central application.
GME

Playing "devil's advocate" here...what would be worse? Letting Mr. Riffin purchase the line in order to save it (depending if he has the funds) or letting it go to scrap and have the line be gone? Which would be worse, in both a preservation/operation/financial sense? (All three can be looked at separately.)

I think the worst thing would be for no resolution since it would result in lengthening the process by which it stays the subject of ongoing tiresome speculation and debate.

Again: somebody with a legitimate and substantiated business plan and resources please act now. Otherwise.....useless noise.

dave

We should have seen this malarkey coming, but I still screamed loud enough to strain my larynx. Ouch.

The problem here is that this gentleman has repeatedly failed for years to come forth to "put his money where his Word document is," as it were, and the STB, absent Riffin walking in with a $400,000 cashier's check on Monday, has due cause to tell him to go away, or at least insist he post bond immediately before the matter is even considered.

Regrettably, Riffin once again has (in my blah-blah-blah opinion) a valid point. A valid Offer of Financial Assistance, or an outright purchase, or appropriate financing to enact such a OFA/purchase, simply cannot be made (or at least is extremely ill-advised even for the proverbial "Powerball lottery winner") without the documentation requested by Riffin of the SRR, and it appears that for whatever reason the SRR has "stonewalled" him. I have no obligation to assist a "vulture" who wants to buy my failing business on terms I don't like for his own possibly-nefarious purposes, but at the same time both the legal quagmire (giggety) of the estate's "foreclosure" actions and the fact that we're dealing with the STB and/or possibly the Pa. PUC means that there may well be a different set of rules and regulations in play......

ah, now you see the effects of abandonment and how it affects other issues.
A little harder to do. Its declared -not- a common carrier railroad at this time, does not mean it still has potential for something.

looks like some wheels...trying to turn.

This just appeared in my e-mail this morning. I don't know how effective this approach might be, but can't fault Mr. Williamson for trying.

Hello, All:
Given the recent STB decision, the Stewartstown Railroad is in dire straits!
We are continuing and redoubling our efforts to save the railroad by paying
off the lein held by the Estate of George M. Hart.
Please see the attached document and also our website at:
http://www.stewartstownrailroadcompany.com.

I am asking for your help and would very much appreciate it if you could
somehow circulate the information to your NRHS and railroad society
memberships? We are looking for persons or entities who are willing to
make an investment and join the Friendly Lein Holders group. An investment in
the Friendly Lein Holders is a loan to the railroad company to purchse the
[color=#FF4000][color=#FF4000][color=#FF4000][/color][/color][/color] lein
from the Estate and put it in the hands of individals who DO NOT want to
scrap the railroad., that is backed by the assets of the railroad which are
in excess of the amount of the lein. There are also links on the website
to make contributions to the Friends of the Stewartstown capital campaign.
The Friends is a 501(c)3 charitable organization and gifts to the Friends are
>tax-deductible.

Any help you can give would be greatly appreciated! If we do not raise
enough money to settle the lein in the next couple of months, we fully
expect the Estate to foreclose on the lein and they have stated clearly
that they intend to scrap the track to satisfy the lein.

If you have any questions or need any further information, please do not
hesitate to contact me directly at 989-798-3821, or fairmontdave@gmail.com.
If this message should go to anyone else in your group, or if there are
persons interested in historic preservation or railroad history/preservation, please pass this on!

Best Regards,

David Williamsom
President
Stewartstown Railroad Company

And if they save it then how do they make it sustainable? I'm not seeing anything that addresses that bigger question. Looks like a sort of long narrow Kalakala-style debacle from my perspective. And, saying the salvaged assets are worth more than the lein may (or may not) be true but that isn't supported by any information either......the costs of recovery are a bit murky.

Show me how it can be sustainably operated in concrete and realistic terms and maybe I'll decide it is worth a contribution. Otherwise, i have other options for contributing to things that i know can be sustained and perhaps even grow in preservation projects to support.

Emotional desperation isn't something I want to buy into.

dave

The way you talk just sounds like naysaying. Do you actually know what it takes for a historic railroad museum to be sustainable?

Since you're so concerned with the financials, pull some form 990's for nonprofit railroad museums that own a railroad. I think you'll be in for quite a surprise. It's not nearly as much as your arm-waving guess might be.

Not talking about any other situation than this one in this thread. I'm pleased that many operators have developed sustainable business plans, and never opined that it was impossible. I've been part of creating some.......Just wanting to know the details of one for THIS situation before considering the probability of any donated support not going down the crapper. They aren't asking me to support a proven winner; what makes the case that THIS ONE can be one? Asking for my investment and support makes me want to know.
If you know, please share it. I don't think I'm the only one interested.

dave

If you're asking me, "sustainable" means that, by whatever means--being a ward of a government entity, a nice endowment, location in a high-traffic area with good promotion, living within its means, getting movie contracts, hauling freight, whatever--the operation/museum/shop/whatever is operating in such a way that it is not repeatedly dependent upon "bailouts," or doesn't lurch from crisis to crisis in constant need of fundraising just to keep the lights on, the locomotive fueled, the ties replaced, etc.

The fact that Hart had to make a six-figure loan to the railroad in question years ago just to perpetuate operation indicates that the Stewartstown as currently operated has not been sustainable for some time. We are not, as far as I or anyone else can tell, looking at a frac-sand or LNG terminal being established at Stewartstown or Tolna. We have not seen a business proposal that gives any indication, even delusional, that the operation makes fiscal sense. The ONLY thing this line has going for it, as with the East Broad Top and many others, is emotional appeal to the heartstrings. But heartstrings are typically separated from purse strings, at least with financially successful persons.

Let's scribble on the back of the envelope for a few.

7.4 miles of track X 2 rails at 60 pounds per yard @ $100 a ton = just short of $80,000.

Add fishplates and spikes and joint bars. Be very generous and double the above figure. Throw in the locomotives and hope someone will give you $15K each as collectibles or scrap.

We're not even up to $200K.

The ONLY thing I can see that works here is someone able and willing to trade 60-pound rail for a restoration project (WW&F? EBT? Maine NG RR Museum? Tweetsie?) for more-easily-obtained 100-pound or other scrap metal that they can get donated to the cause. And that still means someone determined to make the effort to remove the Stewartstown rail for another project.

An intriguing proposal I heard floated was to consolidate the efforts and equipment of the Stewartstown (lovely right-of-way, in the red, has passenger equipment) with that of the nearby Ma & Pa Preservation Society in Muddy Creek Forks (owns the track, lovely right-of-way, short on equipment). Equipment moves would be over-the-road but local. At an extreme, the enginehouse could be disassembled and relocated, and the rail salvaged for any needed Ma & Pa restoration.

Is anyone winning the lottery these days?

You HAVE to look at comparables. Otherwise you are prejudging, and that is the biggest threat to this railroad, just as it was the biggest threat to the Trolleyville collection. (the BELIEF that not only must we survive, but must do it MYYYY WAYYYYYY...)

But even there, you can be wildly wrong. Just as a hypothetical example, someone who comes from the school of "big dollar dinner train", would look at ANY 501(c)(3) railroad museum and call them wildly unrealistic. What, you don't have a million dollars budgeted for trackwork??? Even within museums there are the big players (Boone, Indiana Ry Museum, Orange Empire) and little ones (Fox River, Kansas City, Michigan Transit Museum), some of whom file the 990 e-postcard. Many of those operations have similar capitalization to this railroad, have less than $100,000 total revenue, and do just fine.

My question for this railroad is "show me how you can earn $100,000/year on passenger revenue, memberships and donor support." I consider that not even hard, in their market.


You talk the talk of a serious donor... in which case you are definitely thinking and judging way too much for someone who has not yet TALKED TO THEM DIRECTLY. It should be you who should be investigating, and reporting back to us.

And that is relevant when we are haggling with the owner/creditor. Goes like this.

Creditor: We have $375,000 owed on this railroad. Pay it, and it's yours.
Buyer: $375,000? How do you get that value?
Creditor: That's what we need to get paid in full.
Buyer: All due respect, you should know by now that is not going to happen. Half the properties in America are underwater, because credit was given too freely, and yours is no exception. That isn't your fault, nor ours. Ultimately, your job is to take the best deal you can get. Our job is to be it. But not by a wide margin, because we are a nonprofit and it is illegal for us to, in essence, overpay. Now, absent us, what do you realistically think you can get for this property?
Creditor: Well, we honestly do not know.
Buyer: Beg pardon? All the legal work you've done on this case, tens of thousands in fees, and none to professionally appraise it?
Creditor: Well, we have, but the appraiser was somewhat stumped by the linear nature of the land and rail assets, and in any case his guess does not a buyer produce.
Buyer: I agree. A linear stretch of land is useful to few. Let's talk about title work. How clean is the title? What about liens, easements by, easements to, access, and other encumberances?
Creditor: Well, we have only done that research on a limited basis.
Buyer: I have. *pulls thick folder out, waves it, puts back in briefcase.* This is a maze, and that's going to be an impediment to buyers. Somebody, also you, is going to spend 20 grand on legal fees sorting all this out. Are your legal services free to you?
Creditor: No. The estate is charged for legal work.
Buyer: We have some assistance from our volunteer supporters. Nothing here raises any red flags for us, but then, we're buying it as a railroad. Others will certainly have to do a significant amount of environmental site assessment. Have you done any of that?
Creditor: No.
Buyer: Well, the uncertainty will reduce the value a buyer will pay for the property. Nobody's going to sign a PA for top dollar and THEN pay for a site assessment to see IF the property is clean. Now, how do you aim to recoup the value of the rail and ties?
Creditor: Sell it to a scrapper.
Buyer: And you have quotes for how much?
Creditor: We don't yet have any.
Buyer: Well, don't go by us, but we know a thing or two about the field, and these are our back of napkin numbers.
Creditor: Oh. And what's this?
Buyer: Ties have creosote. They require special disposal. How about entitlements? Who can build on this land?
Creditor: Are you kidding? Nobody. The property is so narrow that nothing can be built due to setbacks.
Buyer: Except a railroad can build auxiliary buildings - that's Federal law.
Creditor: Really?
Buyer: By the way, how much are you paying in property tax while the property's disposition is sorted out? What sort of professional and legal expenses do you expect while all that's going on? You can't just ignore those fees, the estate must pay them.
Creditor: Admittedly, this has been rather a toxic property in that sense.
Buyer: Right, and the property is yours until it's not. Now, most buyers who sign a PA with you are going to want a long list of contingencies that allow them to back out of the deal if they turn up any issues relating to any of these. You probably know you're going to have some of that, and that ties up the property during those periods.
Creditor: We could do an absolute auction...
Buyer: And I think we know what you'd get. Bottom line: You look at the gross proceeds you ultimately realize, minus the various costs you'll bear, minus the professional fees, minus the costs of delay... it is simply not possible to even gross your number. Realistically you will net out only a fraction, and at significant risk. A quick clean sale to us really is the best value for you.