The future of the Texas State Railroad is expected to be revealed Thursday.
The Texas State Railroad Authority will discuss a proposed sale of the railroad from its current operator, American Heritage Railways, to another private company.
Steve Presley, chairman of the TSRA, said the sale is proposed to be to Permian Railways Inc., a subsidiary of Iowa Pacific Holdings, L.L.C. But he said the transaction is not a done deal and negotiations are ongoing between the companies.
In February, American Heritage sent a letter to the TSRA requesting loan forgiveness of $500,000 from both Rusk and Palestine and a total of $600,000 to help with its cash flow problems, or the company said it would furlough its 40 employees and shut its doors. Both cities and the TSRA denied the request, but the railway was committed to keeping the railroad running through the 2012 season.
In the interim, Presley was approached by the owner of Iowa Pacific to possibly take over operation of the Texas State Railroad.
In March, the American Heritage’s cash flow problems were not helped when the company began the cleanup on a large diesel spill at the Rusk depot. After a month of excavating contaminated dirt and spending over $205,000, Presley said cleanup has stalled because of a lack of funds.
But, Presley said he does not know what will be proposed at Thursday’s meeting. The meeting will be held in Palestine’s city hall, 504 North Queen St. at 9 a.m.
“There are a whole slew of things that can be done, and all of them are positive progress,” Presley said. “If we get some freight rail going, that will help support the tourist stuff. If we get another partner in, that is going to put some cash in and support it. Iowa Pacific Holdings is a good company to get to come in because they have four tourist railroads themselves, so they know what they are getting into.”
Jeff Jackson, COO of American Heritage, said he would not comment until after the meeting.
“We are a private business, they are a private business, and it will be made public on Thursday,” he said.
Ed Ellis with Iowa Pacific could not be reached by press time.
Local News
Texas State Railroad's fate to be decided today
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