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The Adirondack Scenic Railroad train passing through Ray Brook. Photo: Mark Kurtz
The Adirondack Scenic Railroad train passing through Ray Brook. Photo: Mark Kurtz

Can the Adirondack Scenic Railroad make it happen?

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For more than two decades, the Adirondack Scenic Railroad has worked to create a world-class attraction in the North Country.

Under a state management plan that's been in place since the 1990s, the railroad now operates on short sections of track in the Old Forge area and between Lake Placid and Saranac Lake.

The excursion train they hope to build would expand to carry tourists 140 miles from Utica to Lake Placid through some of the wildest and most scenic territory in the eastern US.

Rail supporters are hoping that New York state will make a big new investment in that vision.

But a growing number of critics say developing the train corridor has taken too long. And they're questioning whether the Scenic Railroad has the expertise, the staff and the financial strength to run a 140-mile long railroad.

They've called for the state to formally reopen the "unit management plan" to look at other possible uses for the corridor.

Our Adirondack bureau chief Brian Mann has spent the last month investigating these questions, looking at the Scenic Railroad's plan for the future. Here's his special report.

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Brian Mann
Adirondack Bureau Chief

A FIERCE DEBATE AND LINGERING QUESTIONS

Financially speaking, I think we're in a much better place than we have been in past years. That's not to say that we don't have struggles.
The last few year one of the biggest fights in the Adirondacks has pitted the Adirondack Scenic Railroad and its supporters against a new group called ARTA that wants to scrap the train and replace it with a long, multi-use trail from Old Forge to Lake Placid.

That bitter, sometimes nasty debate has largely eclipsed another set of questions that have been brewing in the Park for nearly a decade, long before ARTA came on the scene.

Bethan Maher
Bethan Maher
Those questions in a nutshell go like this:  Can the Adirondack Scenic Railroad actually do what it says it wants to accomplish? 

Can this group, made up mostly of volunteers, build, operate and market an attraction that will draw visitors from all over the world?

Bethan Maher, who was hired last year to run the railroad, says she’s confident the railroad is in a great position to grow.

“Financially speaking, I think we’re in a much better place than we have been in past years," she said.

"That’s not to say that we don’t have struggles.  But we’ve eliminated all of our long-term debt, we’ve paid down our payable list considerably.”

The Scenic Railroad has scored some big wins in recent years – paying down roughly 400 thousand dollars in debts, including some that were roughly a decade old.

They also acquired two refurbished locomotives, and expanded the railroad from Old Forge to Big Moose  Lake, while growing the number of ticket sales to nearly a million dollars in annual revenue.

“It’s self-sufficient on ticket funds, memberships and donations that we have coming in," she said.

[NOTE:  The Scenic Railroad does receive funding from New York state each year, but the vast majority of that income is spent directly on maintaining the state-owned tracks and infrastructure.]

Those are big accomplishments for an organization with just seventeen full and part-time employees scattered from Utica to Lake Placid.

But as the Scenic Railroad talks about scaling up its operation, North Country Public Radio’s investigation found some stark and lingering questions.

REPAIRING TRAINS UNDER A BRIDGE

One of the most pressing involves the loss this summer of the railroad’s maintenance facility in Rome NY.

“I don’t think it’s a secret that we’re repairing train cars under a bridge," Maher said.

The Scenic Railroad has known for roughly a year that it would be losing its lease on the maintenance facility in Rome, in May 2013, but Maher says plans to acquire a new workshop were put on hold.

“Part of that reason that we have not developed a new maintenance facility at this point is because of the new UMP.  Before we secure any new, long-term debt, we need to know where we’re going.”

The state will decide by January whether to open a more formal review of the unit management plan or to stick with the current plan that’s been in place since the 1990s.

But internal documents from the Scenic Railroad – including a company newsletter produced last November – point to other on-going struggles – including the difficulty of retaining experienced maintenance staff on a bare-bones budget.

That document notes that one experienced mechanic was replaced in the last year by a recent high school graduate with no prior experience. 

The newsletter also points to “a shortfall of funds needed to complete upgrades to equipment and a continued shortage of locomotives” as major concerns.

Maher says many of those problems have since been addressed, but she acknowledged that the railroad will need to hire more staff if operations expand to include the entire Utica-Lake Placid corridor.   

“Currently the individual locations do marketing on their own, we would need to hire a marketing director," she said.  "Our accountant is in a few days a week at this point, we would probably have someone in the finance department full time.”

At present, the Scenic Railroad operates without a full-time fundraising department, or an endowment, or savings.  That’s a major contrast to other long-established non-profits operating in the North Country.

WHY NO LONG-TERM LEASE?

Other lingering questions involve the Scenic Railroad’s lack of a long-term lease to operate on the corridor.

For two decades, Maher says, the company has run its railroad on a 30-day permit that can be revoked by the DOT at any time. 

"A long term lease is obviously one of the outcomes that we are hoping for," she said.  "The UMP calls for a long-term lease, which I think they state probably just never got around to."

Ray Hessinger, a railroad expert with the DOT, agrees that the lack of a long-term lease has hindered the Scenic Railroad’s progress. 

"Nobody's going to put the kind of private money of the millions of dollars that you're going to need on a 30 day permit where the state can say you're out of here thirty days from now."

But no one at the railroad or the DOT would say why no long-term lease has been negotiated over the decades that the Scenic Railroad has operated. 

In an email, Hessinger would only say “we were unable to reach terms of a lease.”

Al Dunham, with the Scenic Railroad’s board, says the non-profit now hopes to win a 20-year commitment from the state.

But it’s unclear why the state of New York would be willing to grant that kind of lease now or what it will mean to the Scenic Railroad's financial stability if it doesn’t happen. 

Hessinger, with the DOT, said that before any long-term commitment could be provided, the state would now have to go through another formal process to identify all possible rail operators on the line.

“There is no guarantee,” Hessinger wrote, “that [the Adirondack Scenic Railroad] would be the selected operator.”

Diagram of the Adirondack Club Pullman Sleeping Car. Source: ANCA
Diagram of the Adirondack Club Pullman Sleeping Car. Source: ANCA
WHAT ABOUT THE PULLMAN CAR SERVICE?

Yet another point of uncertainty involves the Pullman car service, described by the Adirondack Scenic Railroad as a major part of their plans for the future.

That project, a partnership with another railroad called Iowa Pacific, would bring overnight travelers from New York City to Lake Placid.

It was announced with fanfare last year and a railroad supporters say it could bring as much as $300,000 in revenue.

But multiple sources contacted for this story suggest that negotiations and work to actually bring that project to fruition never advanced beyond the initial announcement. 

Ed Ellis, head of Iowa Pacific, says he still thinks the partnership with the Scenic Railroad is a good idea.

"The Adirondack Scenic Railroad is a very small organization," he noted, but he said his larger company would supplement the non-profit company's operations with its own staff and equipment.

But Ellis acknowledged that work to actually launch the service has been on hold, pending the state’s decision to maintain the corridor spend millions of dollars upgrading the tracks.

THE ADIRONDACK SCENIC RAILROAD'S BUSINESS PLAN

Railroad supporters say they’ve developed a comprehensive business plan that answers many of these questions and explains how their non-profit will scale up to into a major regional attraction.

Speaking last December, railroad president Bill Branson promised to release that document to the public.

“We will be glad to share that as soon as we’re comfortable with it  and we have other smarter people saying this makes sense, we can go with this," he said.

That offer to make the railroad’s business plan public was repeated in September of this year by board member Al Dunham who helped draft the document.

But the Scenic Railroad abruptly reversed course and said that the plan won’t be revealed to the public or the media until after New York state makes a decision on the future of the rail corridor. 

“I have received instructions from our board chair that the [Adirondack Rail Preservation Society-Adirondack Scenic Railroad] business plan will not be available to any media,” confirmed Dunham in an email, adding that “as a member of the ARPS board, I need to comply with those instructions.” 

“When a decision from the state comes, this will all become public,” Maher said in an interview.  

[NOTE:  A partial copy of the business plan was leaked to North Country Public Radio by critics of the train project, who say they acquired it from the state Transportation Department.

But that version — which can be viewed here — is apparently incomplete and NCPR was unable to confirm that it was the latest draft of the Scenic Railroad’s plan.]

QUESTIONING THE SCENIC RAILROAD'S TOP LEADERSHIP

A final question identified by NCPR’s investigation involves Bethan Maher herself. 

She was hired last year to lead the railroad during this transition period, despite the fact that she is a recent college graduate with no prior experience running a business, a non-profit or a railroad.

"I've learned pretty much everything on the job," she acknowledged. 

Asked what experience she had that she brought to her work as head of the Scenic Railroad, Maher pointed to her projects while a university student working "with indigenous women in Mexico creating sustainable tourism opportunity."

NYS DOT's Ray Hessinger (Photo:  Brian Mann)
NYS DOT's Ray Hessinger (Photo: Brian Mann)
Ray Hessinger with the DOT, acknowledged in an interview that the challenges facing Maher and her non-profit going forward are substantial. 

"The tourist rail business is not a cash cow, it's a hand-to-mouth operation," he said.

But Hessinger also pointed to the Scenic Railroad’s history of overcoming challenges and hurdles.

"They've been doing it for more than twenty years now.  So there's a demonstrated history there of being able to run the rail service."

Others have grown more skeptical, including many local governments along the corridor that have passed resolutions calling for the railroad to be removed to make way for a recreation trail.

Supporters of the Adirondack Scenic Railroad have argued repeatedly that questions of this kind represent an unfair attack on their small, mostly volunteer-driven operation.

Bill Branson, president of the railroad’s board, declined to be interviewed for this story, asserting repeatedly that media coverage has been biased.   

But speaking last December, he argued that the state’s investment in the excursion train would bring huge dividends to the economy in the Adirondacks.

"We can get this job done for a relatively small amount of money in a relatively short amount of time," he promised.

If the state does decide to maintain the train corridor, the Scenic Railroad hopes to then win roughly $15.2 million dollars in funding to upgrade the tracks, as well as the 20-year lease, in order to move their business forward.

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