The Texas State Railroad Authority paid off a $1 million debt to the cities of Palestine and Rusk this month. Now it's ready to chug on to bigger and better things, including added service and special events that the authority hopes will boost ridership and profitability.
TSRA presented two checks, of nearly $133,000 each, to the city councils of Palestine and Rusk. That closes out the $500,000 debt obligation the authority had incurred to each of the two cities.
In 2007, Palestine and Rusk issued notes to the railroad authority to upgrade railroad cars and engines, and keep the Texas State Railroad running. The two cities frame the historic rail line; the Polar Express makes the 50-mile round-trip through the Piney Woods of East Texas.
“We are pleased to get this debt paid,” Ben Campbell, vice president of the Texas State Railroad Authority board, said on Monday. “I'm sure the cities are happy, too.”
The railroad authority plans to build on recent successes to boost ridership, up to 120,000 passengers a year. It also wants the railroad's operator to turn an annual profit of $1 million. Last year, the railroad made a small profit, but it has made up to nearly $1 million in recent years.
“We are hoping to get back to that level of profitability,” Campbell said. “I think we can.”
As a non-profit agency, the Texas State Railroad Authority receives 20 percent of the operator's profits. It plows that money back into the railroad for upgrades, improvements, maintenance, and marketing.
“Keeping a steam locomotive running and maintained is extremely expensive, far more expensive than a regular diesel engine,” Campbell said.
Now, the Polar Express carries roughly 60,000 passengers, from late November until the end of the year, and about 25,000 passengers from April to early November.
“I'd love to see (ridership) at more than 100,000 or 120,000 a year, as opposed to 80,000,” Campbell said. That would hinge largely on increasing ridership from April to November.
Nearly all passengers – up to 95 percent – are from outside the area, mostly from Houston and Dallas, but also Arkansas, Missouri, Mexico and other states and nations.
“They come to Palestine and spend money on motels, restaurants, and other local businesses,” Campbell said. The railroad authority is considering ways to attract more local residents.
Asked about fare discounts for local residents, Campbell said the operator sets fares, but the authority could recommend such a change.
The Polar Express could have another Presidential car by mid-summer. The popular premium service, offering oversize seats, a private outdoor viewing platform, and complimentary champagne and appetizers, usually sells out. The railroad might also add another caboose. Carrying up to eight passengers, this premium service is popular with families.
Plans also call for a railroad park near the depot, possibly next year, including exhibits of steam engines and railroad cars. Also on deck: scheduling more theme runs and special events to bolster ridership from April to early November, such as a Tommy the Tank, or a murder mystery on the “Disoriented Express.”
Founded in 1883, The Texas State Railroad was built by prisoner labor to haul iron ore and timber. For the last 42 years, it has operated as a sometimes-struggling tourist line.
The Texas Parks and Wildlife Department started to run the tourist line in 1976. Due to high operating deficits, however, the department announced in 2007 that it would shut down railroad operations. Plans called for turning the railroad engines and cars into a static display.
People from Rusk and Palestine urged state legislators to continue operating the train, or turn it over to the two cities. In response, the Legislature turned over the railroad and all its property to a newly created Texas State Railroad Authority.
The first two private operators under the new authority – American Heritage Railways and Iowa Pacific Holdings – struggled to make the railroad consistently profitable.
Last year, the authority granted Western Company a new contract to lease and operate the line. When Western Group took over from the previous owner, Iowa Pacific, in May 2017, ridership was down. Rumors flew that the railroad would close.
Western quickly extinguished those rumors. It made a small profit last year; the authority continued to make much-needed improvements to its buildings in Palestine and Rusk.
Ridership increased after the new operator began working with the Texas State Tourism board, which helped promote the railroad statewide.
Last July, the Palestine Economic Development Corporation awarded the railroad $25,000 of a matching grant to makeover the Palestine depot. Western Group has already spent more than $100,000 on the building, which was built in the 1970s.
Western Group has continued to improve service, even serving soft drinks, food, wine, and beer. It has also installed new carpet and chairs for the railroad cars.
Tickets to ride the Polar Express vary with cars and seasons, generally ranging from $39 to $99.
For information or to make a reservation, 1-855-632-7729, or firstname.lastname@example.org