The Apache Railway is important economically to Navajo County and the surrounding communities in the region. It provides over 20 jobs and, according to District III Navajo County Supervisor Jason Whiting, it continues to draw interest from new industry looking into the area. Community leaders are concerned about losing this asset and the jobs tied to it, though, if the U.S. Department of Agriculture (USDA) loan that was sought in June following approval of a pre-application is not approved to pay off the creditors at Hackman Capital, who want to scrap the railroad.
Since the Catalyst Paper Mill closed on Sept. 30, 2012, local leaders have worked diligently to keep the railway. Catalyst sold the railroad in bankruptcy to an investment group led by Hackman Capital Partners. Hackman has since been working to dismantle the mill, which community leaders were not able to stop, but they did work with Hackman to secure time to put together a long-term loan to save the railway from being scrapped.
Hackman officials agreed that the railroad and its stock could be formed into a nonprofit foundation, The Snowflake Community Foundation, and they would extend a short-term loan to this foundation, allowing it and local leadership time to find a long term funding source.
Since that time, the foundation and employees of the Apache Railway have worked diligently to secure business. They have been able to secure contracts storing railcars off the main line, providing repair and wash services, and more recently have shipped loads of timber from the new Novo Star lumber mill. This is in addition to hauling feed to PFFJ, which they have continued to do during this time. This past year the Apache turned a profit and they are well on their way to improving on those numbers this year, demonstrating the viability of the railroad and helping justify long term financing.
While the Apache Railway was securing business, foundation officials worked on a loan with the Federal Railroad Administration designed to save short line railroads. It appeared to be a great fit and opportunity for the Apache Railway, and those involved felt they had been all but assured the loan would be approved. In November 2014, with no explanation, the loan was denied.
The foundation worked quickly with local and state leadership to find any other funding opportunities and discovered a USDA loan that looked promising. Over the past several months the foundation has successfully gone through a pre-application process designed to give the applicant a good indication of the viability of the loan prior to submitting a formal application. In June the final application was submitted for underwriting and they now wait, hoping for approval.
While the railroad was making a profit and working toward the USDA loan, Hackman leaders maneuvered to take over railroad operations in May of this year. As a result of their actions, the foundation filed for bankruptcy protection. Since that time several hearings have occurred and it is working its way through the legal process, but the funding of the USDA loan is becoming increasingly urgent.
Many local and state leaders have offered support to the Apache Railway by reaching out to the USDA at the state and federal level. Among many who have worked to help secure this loan is Congresswoman Ann Kirkpatrick, who has been monitoring the issue and following up with USDA directly.
Local and state leaders understand this is important to northeast Arizona because of the many current jobs it supports in combination with the potential future economic opportunities it provides.
Local leaders ask area residents to join the effort by contacting Congresswoman Kirkpatrick at Kirkpatrick.house.gov/contact, thanking her for her support and asking her to continue to support the effort to secure the loan.
