The Stewartstown Railroad, in existence since 1885, now faces its most difficult challenge ever. Past President George Hart loaned money to the corporation and his heirs are have been insisting on payment or they will foreclose on our assets, and the result will be to sell and scrap the railroad. We have received a final ruling from the Surface Transportation Board (STB) on the case for adverse abandonment filed by the Estate of George M. Hart. Effective December 16th, the railroad will be declared abandoned and the Estate will be able to foreclose on our assets. While the Friends’ Capital Campaign has helped immensely in the process of starting to move towards train operations, it has raised only a small fraction of the total debt amount. Unless something is done immediately, the Stewartstown Railroad will cease to exist.
However, our darkest moment might in fact be a turning point into a new era. The Estate has stated several times that it is willing to sell the lien to a third party for the full amount, which is $352,415. A number of interested individuals have stepped up to commit funds to purchase the lien from the Estate. We now have tentative commitments of almost $275,000 from nine different sources. If enough people will commit funds, our goal is to purchase the lien from the estate and ask people to hold their liens for a minimum of 5 years to allow the railroad to restart train operations and generate funds to start paying off the new liens.
We are closer to running trains than we have been in years. The roofs on the stations have been worked on, the track is being repaired, the locomotives are nearly serviceable, one of the coaches is being painted, we are operating motor car trains and having open houses on a regular basis for the first time in ages. We have more volunteer support and interested people than ever before. We are getting some momentum going, and will probably be able to operate full size trains in 2013, nine years since the last revenue train operated. We anticipate that these efforts will accelerate significantly if the fear of abandonment and dismemberment goes away.
This is your chance to play a major role in saving the railroad for the future. It would only take 8 additional people making commitments of $10,000 to raise $352,000. However, we recognize that many supporters may wish to contribute smaller amounts, so a suggested minimum contribution level of $2,500 has been set to prevent the number of people from becoming unwieldy. We have also been approached by people willing to make commitments of $1000, and are trying to incorporate these pledges into our efforts.
As holders of the new liens, individuals will have the same rights that the Estate has currently, including the right to foreclose if necessary. Because of the liens, contributions would be backed by the assets of the Company, which are in excess of $1 million as documented by the official appraisals done by the Estate itself. Individuals who eventually decide to be reimbursed for their contribution can be accommodated if there are other contributors available. Several people have already indicated that they would be interested in being involved, but cannot produce funds immediately and thus would be candidates for replacement funding. At the end of the 5 year period, the railroad will begin paying off the lien at a rate that will be determined by its revenues.
The individuals will assume ownership of liens and the rights and responsibilities that go with it. However, because the goal is to save the railroad rather than dismantle it, we expect that they will work in cooperation with shareholders and management toward a collective goal, which is to put the railroad back into operation. The individuals will not actually own the railroad, but a lien against some or all of its assets. The possibility of an ownership interest in the company may also exist for major contributors.
The Stewartstown Railroad is an important piece of our local York County history and your support is needed if we are going to preserve it. Please help sustain the railroad. This can be done by simply emailing your pledge or forwarding questions to Kenneth Bitten at email@example.com or call at 410-336-1605. If we cannot assemble a large enough commitment, no money will be accepted, and the railroad will almost definitely be sold and scrapped.