Eighty percent of the parent company of Saratoga & North Creek Railway is being sold to a Midwestern corporation, and local officials are trying to figure out what that means for the local railroad.
Iowa Pacific Holdings LLC has agreed to sell an 80 percent interest in the company to Illinois-based entities known as Chai Trust Co. LLC and EGI Fund Investors LLC, according to federal filings.
No purchase price was released. Iowa Pacific’s “senior management” will retain the remaining 20 percent of the company, according to the federal notice.
“Chai-EGI states that the purpose of this transaction is to improve the revenue base of the railroads controlled by IPH (Iowa Pacific Holdings) through access to Chai-EGI’s resources,” a notice posted by the U.S. Surface Transportation Board states.
Warren County Administrator Paul Dusek and numerous county supervisors said Monday they were not aware of the proposed sale until advised of it Monday by Johnsburg Supervisor Ron Vanselow. Vanselow said a local resident told him about the sale.
Warrensburg Supervisor Kevin Geraghty, chairman of the county Board of Supervisors, said county officials were reaching out to Iowa Pacific staff to discuss the issue, but had not spoken with the company as of late Monday afternoon.
Iowa Pacific owns the railroad that operates passenger trains between North Creek and Saratoga Springs and freight trains between Tahawus and Saratoga Springs.
Warren County and the town of Corinth own the train line itself.
Iowa Pacific owns 10 railroads around the country, most of them in the Midwest and Southwest.
The possible sale was made public Wednesday through a filing made with the U.S. Surface Transportation Board. It was published on the federal agency’s website.
Iowa Pacific President Ed Ellis could not be reached for comment Monday, but said later in the week that the company's management and mission will stay the same if the sale takes place. There will be no effect on SNCRR's management, he added.
He said the company is simply "adding investors" to improve cash flow for investment into operations.
Ellis said he could not discuss the amount of money involved in the transaction.
SNCRR has had trouble paying its local bills promptly, including its payments to Warren County.
Vanselow said the sale could be good news if it infused the company with cash, as the sale notice seems to indicate.
“It may improve their cash flow considerably,” he said.
The railway has been criticized for a lack of communication with local officials, and Vanselow said he hopes that will improve.