Published: April 06, 2007 07:29 pm      

TSRR efforts gaining steam

Hearings set for Tuesday; contract inked

PALESTINE — Local supporters of efforts to save the Texas State Railroad now have two more reasons for optimism — a signed contract with a potential private operator and committee hearings set for Tuesday.

On Thursday, representatives of the Texas State Railroad Operating Agency and American Heritage Railways signed an eight-year contract to allow American Heritage to take over TSRR operations on Sept. 1, 2007, pending approval by the Texas Legislature.

On Tuesday, American Heritage owner Al Harper, TSRR Operating Agency chairman Steve Presley and possibly others are scheduled to appear before House and Senate committees to testify during a pair of afternoon hearings on House Bill 3113 and Senate Bill 1659.

“That’s one more step closer to completion to save the railroad,” Presley said late Thursday afternoon.

The two companion bills, sponsored by Rep. Byron Cook, R-Corsicana, and Sen. Robert Nichols, R-Jacksonville, would allow the transfer of operations of the TSRR from the Texas Parks and Wildlife Department to a Texas State Railroad Authority for the purpose of contracting with a private company, American Heritage, to run the trains. In the event that the legislature agrees to relinquish state control, the operating agency — which was created by an interlocal agreement between the cities of Palestine and Rusk to find and contract with a potential operator — would be dissolved and the railroad authority would be created to govern, or oversee, the operation of the railroad.

If the legislature does not agree, Presley said, then it’s over.

“Everything we continue to hear from Austin is either we manage to save the railroad with a private operator or it will close September 1st. There will be no other options,” Presley said, adding, “Parks and Wildlife says if they’re given the money (to fund the TSRR’s operation as a state park) they’re not going to use it on the Texas State Railroad.”

At least Harper and Presley and possibly more are expected to testify before the House Committee on Culture, Recreation and Tourism in a hearing set to begin at 1 p.m., Presley said, and again at 2 p.m. before the Senate Committee on Natural Resources. Both times are subject to change, he noted, at the discretion of the respective committees.

In the months prior to Thursday’s contract signing, Presley said local supporters had been advised that in order to give the railroad its best chance to remain on track, the operating agency should be formed to show joint support from both cities; the agency should issue an RFQ, or Request for Qualification, from rail companies interested in running the trains; and a detailed contract should be agreed to between the agency and the potential operator.

Under terms of the contract, and pending state approval, the Texas State Railroad would cease to be a state park as of Sept. 1, 2007, when American Heritage would take over operations until Aug. 31, 2015, when the contract would either automatically renew or action would be taken to terminate it or renegotiate terms.

Annually, American Heritage would pay the railroad authority either a guaranteed payment of $100,000 or 2 percent of the gross operating revenue, whichever was greater, for the use of the railroad. It also would pay $50,000 for each of the first five years in the form of promotional expenses at American Heritage’s two other railways — the Durango-Silverton Narrow Gauge Railway in Durango, Colo., and the Great Smokey Mountains Railway in Bryson City, N.C. — and it would guarantee $50,000 of in-kind charter train services for non-profit fundraising purposes.

Additionally, the contract states that American Heritage would “endeavor to offer continued employment to all employees of the State of Texas Parks & Wildlife Department currently working at the Texas State Railroad” and that it would continue to run trains from both the Palestine and Rusk depots while marketing the railroad, be available to market the surrounding areas and attractions in Anderson and Cherokee counties and put in place a capital improvement and rehabilitation plan to make necessary improvements and additions to the facility and equipment and maintain it appropriately.

In return, the railroad authority will set up a $2 million revolving loan fund from $12 million requested by the agency from the state for repairs and maintenance. The loan would not accrue interest, and no payments would be required until 2010.

If the total number of riders in a calendar year meets or exceeds ridership goals, the agency would transfer to American Heritage an undivided 12.5 percent of ownership interest in railroad property — locomotives, rolling stock, concession equipment, buildings, structures and other real property other than rights-of-way, railbed and track. The percentage transferred would rise if ridership fell below those goals.

“This really is a great economic opportunity for our area,” Presley said. “We’re really proud to have worked it out with American Heritage Railways.”

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Beth Foley may be contacted via e-mail at bfoley@palestineherald.com