Colebrookdale Railroad seeks $25 million
Colebrookdale line turning away business, needs upgrades
The Colebrookdale Railroad is in the unfortunate and unavoidable position of having to make extensive improvements to its infrastructure to effectively sustain operations.
That was the grim assessment Nathaniel Guest, executive director of the trust that manages the railroad, delivered to the Berks County commissioners at their weekly budget and operations meeting Feb. 6.
And to finance those improvements, the trust is asking the county to invest $25 million.
“What we discovered is that in order to take advantage of some of the opportunities we are going to require capital investments on a level that our capital reserves will not cover,” Guest told the board.
“We believe that with infrastructure improvements we can carry more freight business and grow our passenger service. The trust is willing to do its part, but there is a significant infrastructure need. That’s where we need the county to help.”
The Colebrookdale Railroad, a 9-mile freight line that winds its way along the Manatawny Creek through woodlands and over historical bridges, was first established as a link between Boyertown and Pottstown in 1869.
Upon learning that the line was going to be abandoned in 2009 and believing the history of the line was worth saving, Guest created a campaign to keep the trains running.
He formed the Colebrookdale Railroad Preservation Trust and approached the county for assistance. The county bought the line in March 2009 for $1.35 million to continue service to its freight customers through an agreement with Eastern Berks Gateway Railroad.
Then, in 2014, commissioners turned it over to the Berks County Redevelopment Authority.
The redevelopment authority established a partnership with the trust with the goal of keeping the freight business moving while also working to create a passenger service that would become a tourist destination.
The partnership made the two nonprofit organizations responsible for securing grants and funding the maintenance of the railroad.
Aging infrastructure
Kenneth L. Pick, executive director of the redevelopment authority, told the commissioners that the $25 million would be spent to replace the existing track and renovate some of the bridges to handle the 286,000-pound rail cars that have become the industry standard.
Pick said that while the line continues to be safe in its current condition, the railroad is missing out on valuable freight business because the line is not up to industry standards.
He said the authority has recently had to turn away two customers wanting to use the line because the track and bridges fail to meet those requirements.
He said there are two reasons why the authority was not prepared for this problem.
First, the condition of the track and bridges was not completely known when the county purchased the line, and second, the track has deteriorated faster than anticipated due to heavy inland flooding from recent intense rainstorms.
“It’s not in the shape we thought it was,” he said. “And when it comes to the infrastructure, the redevelopment authority still owns the railroad and is still obligated to make the improvements if we want to attract more freight service to our line.”
Guest pointed out that the passenger service has been a tremendous success.
“We are doing things with this operation that haven’t been done anywhere else,” he said. “We are the highest rated tourist railroad in the state and that’s something we should be very proud to have.”
But he said the railroad has reached a ceiling on that side of the business.
Guest and Pick told the board the best way to ensure the line is financially sustainable heading into the future is to add more freight customers. And they can’t do that until these infrastructure improvements are made.
Clash of priorities
County Budget Director Robert Patrizio said he would like to see a business and marketing plan revealing what the railroad would do with improved infrastructure before he can make any recommendations about whether the county should spend reserve funds to finance the project.
“We want to see that the railroad is sustainable,” he said. “I don’t believe we can afford to do the $25 million on top of the new prison construction. There’s a lot of moving parts right now. Once we have more information we’ll have a better idea of what we can and cannot do.”
Patrizio added that there would need to be a serious discussion about how to finance the project.
He said the county won’t be able to borrow the money because the county doesn’t own the asset. And while the redevelopment authority might be able to finance a loan, those loans would not qualify for taxexempt status because the for-profit Eastern Berks Gateway Railroad operates the freight business.
Guest said the trust is working on a plan and should be completed within a few months.
Commissioner Kevin S. Barnhardt said he would need to see that before he could decide.
“We consciously moved this railroad to the redevelopment authority so that the county wouldn’t be faced with the issue we’re discussing today,” he said. “And I support the railroad, but these numbers are beyond shocking.”
Barnhardt said that if the board were to take $25 million out of its reserves it would most likely affect the county’s AAA rating, which will be very important when the board is ready to issue bonds for the construction of a new prison.
“Personally, I thought we were getting out of the railroad business and now we are getting pulled back in,” he said, adding that he will need to see guarantees from freight customers willing to come aboard if these improvements are made before committing to any investments.
Commissioners Christian Y. Leinbach and Michael Rivera said they want to look at the numbers to see if the railroad can outline a sustainable path forward before they even begin to discuss the possibility of financing the improvements.
“There is a lot more that needs to happen before we make any decisions,” Leinbach said.