Saratoga & North Creek Railway leaves unpaid tax bills

Debris left along the tracks near the North Creak rail station is seen. Warren County is trying to get the former rail operator to clean it up. (Photo provided by the town of Johnsburg)

The financial hits from the tenure of Saratoga & North Creek Railway continue for Warren County.

County leaders found out this week that the railroad company has not paid property taxes on a stretch of rail line in Saratoga County as its contract required, and Saratoga County was beginning foreclosure proceedings on the property.

The land in question is owned by Warren County and includes the train station off Rockwell Street and the stretch of rail line south of the station between Hadley and Corinth. The town of Corinth owns the line from Corinth south to Saratoga Springs.

SNCR leased the rail line from Warren County between 2012 and earlier this year, and its contract with Warren County called for the company to pay taxes on the property, but Saratoga County officials contend that the company did not do so for 2017 and 2018. Now that SNCR has pulled out of the region, stiffing Warren County on revenue payments dating back to last summer that were not turned over, it has become clear that the tax bill would not be paid.

County Treasurer Michael Swan said the county was notified in recent days that Saratoga County was preparing to begin foreclosure proceedings on the property, and interest and fees were compounding at a rate of 1 percent a month.

As of Thursday, Swan said just over $30,000 was owed.

“We’re just finding out about this now,” Swan said.

Saratoga County’s annual property tax auction is held in March, so the county has time to avoid losing the property.

The county Board of Supervisors Finance Committee authorized payment of the taxes from its savings account.

“I can’t see stiffing another county because of a bad business deal,” Warrensburg Supervisor Kevin Geraghty said.

SNCR also owed the county an estimated $28,000 in revenue from ticket sales last year. The county Board of Supervisors is looking into possible legal action over the unpaid bills, as well as SNCR’s inability to move its equipment off of Warren County’s rail line. Numerous deadlines have passed, but there appears to have been little progress for months.

Supervisors discussed a variety of possible tactics as more than a dozen train cars remain on the line in North Creek, as well as piles of what county Public Works Superintendent Kevin Hajos described as piles of “construction and demolition” waste.

Hajos said the company has had a contractor on site looking to move train cars south, but a number of problems have developed with equipment.

Johnsburg Supervisor Andrea Hogan said the situation was “well beyond the point of good faith.”

County Administrator Ryan Moore said efforts by his office to contact Iowa Pacific have not resulted in a response.

Supervisors discussed potentially seizing the equipment, or loading the debris and other materials in box cars so they are no longer an eyesore at the train station, where other events like a weekly farmer’s market are held.

“As far as I’m concerned, it belongs to us,” said Stony Creek Supervisor Frank Thomas, the county’s budget officer.

The owner of SNCR’s parent company, Ed Ellis, has not responded to requests for comment since last March.