Amid financial losses, Saratoga & North Creek Railway plans to shut down this weekend
Saratoga & North Creek Railway notified its local partners that it plans to halt its operations after the Saturday “snow train” run between Saratoga Springs and Thurman.
The company will not operate tourist trains after that date but does not plan to lay off its employees at that point, according to Justin Gonyo, the railway’s general manager.
He would not say how long workers would stay on if the railroad is shuttered. The announcement came after company President Ed Ellis told Warren County leaders last week that mounting financial losses would force a closure unless the company can sell a rail line it owns in Essex and northern Warren counties for $5 million to develop freight business for mined stone. The line is known as the Sanford Lake or Tahawus line.
The railway has also contracted with Revolution Rail Co., which offers rail bike rides on the Tahawus line, for rail bike trips. The company’s voicemail and Facebook page show business as usual for a late May seasonal opening, and Gonyo said the railway’s decision about its operations will not affect the rail bike business.
The shutdown comes months after SNCR had worked with Stony Creek Ranch Resort on a new holiday train program, and talks on additional partnerships between the railway and the resort were ongoing. A new platform was built at the resort to accommodate the train.
Carol McLean, general manager of the resort, said in an email Saturday her business had been working with groups wanting to take dinner train trips, which will apparently become “moot” now. She could not be reached Monday.
The company had recently entered into a contract with Barton Mines of North River to move stone south. It was unclear what effect Ellis’ comments would have on that contract. A call to Barton’s headquarters in Glens Falls was not returned Monday.
A Tupper Lake contractor bought the former NL Industries mine in Tahawus and also plans to move stone tailings from the site via rail.
Ellis’ comments about closing down the railroad company came after Warren County notified his company that the contract between the county and SNCR had been “breached” as of earlier this year, when the company’s revenue payments were overdue. The county gets a portion of the revenue that the rail company takes in, but SNCR has repeatedly been late forwarding the money to the county and town of Corinth, which owns the line between Corinth and Saratoga Springs.
Ellis is president of Iowa Pacific Holdings, which owns SNCR and at least nine other railroads around the country and in Great Britain.
He said the company has lost millions of dollars because it has not been able to develop freight traffic to balance bills for its tourist train, which does not produce enough revenue to support itself.
The controversy last fall over Iowa Pacific storing out-of-service tanker cars on the rail line north of North River, in the state Forest Preserve, chased away potential storage customers, and the county’s vote to oppose car storage “broke” his company’s relationship with county leaders, Ellis said last week.
“We aren’t able to continue to operate the railroad financially and lose money,” he said. “There is either a purchase of the Tahawus line or we are done.”
Warren County leaders have indicated the county will hire a lawyer who specializes in rail issues to help the county plot its actions going forward.