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Wednesday, 03 April 2013 19:18

Critics try to derail train stimulus in Jackson

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The great Dillsboro train debate rolled on in Jackson County Monday with a public hearing this week on whether the county should give the Great Smoky Mountains Railroad $700,000 in exchange for the promise of more riders and tourists.

 

Residents, business owners and government officials packed the county commissioners’ chambers to share their thoughts, listen and show support for a train stimulus package.

“When one comes to Dillsboro and sees an empty railroad station, one is taking away the impression that we don’t take care of our own,” said Dillsboro Inn owner T.J. Walker.  “We have an opportunity to recapture a lot of business we have lost and redirect it to Dillsboro.”

The plan would provide the private railroad with up to $700,000 in county funds to restore an out-of-commission steam engine, build a turntable and improve its rail yard. In return, the train would bring the scenic rail trips back to Dillsboro, promising a major tourism boost.

The train pulled out of Dillsboro several years ago, taking with it hordes of tourists and leaving behind a trail of shuttered and struggling merchants. The railroad now bases most of its trips out of Bryson City, with only limited service to Dillsboro.

Dillsboro Mayor Mike Fitzgerald said the deal isn’t about propping up just his town, however. Tourists coming to ride the rails will help the whole county.

“This goes farther than Dillsboro,” Fitzgerald said. “You’d benefit a lot of people.”

Swain County commissioners already pledged $700,000 to the train earlier this year in hopes to help ridership at the train’s main hub in Bryson City. The railroad’s fleet currently consists of diesel engines. A steam engine would attract a new and bigger base of riders.

The railroad’s owner, Al Harper, said he can’t fund the project on his own, nor is he eligible for a traditional bank loan.

Jackson County commissioners have yet to take the plunge, however.

Meanwhile, critics of the deal also attended the meeting. One resident, Marie Leatherwood, urged the county not to invest taxpayer money in “a piece of rusted junk,” in reference to the old steam engine. 

The draft of the deal carries safeguards for the county’s money. Rather than handing over a blank check to the railroad, the county would process invoices as work is completed on the steam engine and turn table, paying as they go so to speak.

However, one source of contention and confusion is what the railroad would put up as collateral — something the county could seize to recoup its investment should the railroad not live up to its end of the deal. The train is putting up the steam engine itself as collateral for the funding from Swain. For Jackson, it has offered up 12 vacant acres in Dillsboro, but it would not include the train’s maintenance shed as originally thought by the county.

The railroad’s own appraisal of the property puts it at $1 million. County tax records show the value is only half of that, however.

County Manager Chuck Wooten said he couldn’t explain why there was such a discrepancy between the values but added the county had faith in the numbers provided by the railroad’s appraiser. He said if commissioners second-guessed the value a second appraisal could be undertaken.

“What you have to trust is that this guy, being a licensed appraiser, has done his homework,” Wooten said.

Leatherwood is skeptical, however, especially since the county has refused to release a copy of the private appraisal done by the railroad.

Other skeptics preached caution and pointed out potential flaws in the plan and the murky waters the county may be entering by providing taxpayer funds without adequate assurances.

“Taxpayer monies are not a treasure chest to dip into to give money to private business based on hope for economic improvement rather than a sound fiscal analysis,” said George Ware owner of The Chalet Inn, located just outside Dillsboro.

In exchange for economic assistance, the train must create six full time jobs within 36 months and stay operational for 15 years, at which point the loan will be entirely forgiven.

Jackson would insist half the steam engine trips originate in Dillsboro — but the county is also angling for its fair share of all train trips. The county wants half of all the train departures to be from Dillsboro, rather than starting in Bryson City and journeying to Dillsboro just for short layover.

As a sign of good faith for entering talks, the railroad has already started 12 trips out of Dillsboro this spring. Insisting half of all trips originate in Dillsboro could be a stretch, however, given that the railroad runs trips out of Bryson City heading in the other direction to the Nantahala Gorge.

As a pot sweetener, the county wants right-of-way along the train track to create a long-distance hiking trail through the county.

At its height, the railroad brought about 60,000 visitors per year to Dillsboro before moving to in 2008. A recent Western Carolina University study uses a similar ridership figure to estimate a $25 million boost to the local economy and the creation, or retention, of more than 300 jobs — if the steam engine is brought on line, the turntable built and the depot in Dillsboro reopened.

The turntable is a rotating track used to right the steam engine once it reaches the end of the line. A turntable would need to be constructed in both Dillsboro and Bryson.

The steam engine and turntable could be the game changer, according to Sandra Grunwell, associate professor at WCU and co-author of the study. She pointed out that a majority of respondents to the most recent survey said they’d prefer and would pay more for a steam engine ride. About half said a turntable in Dillsboro would influence where they hopped on the train.

However, Ware pointed out that using past projections for future success could be dubious logic because of changes in the national economy.

“If anyone thinks 55,000 people will come to Dillsboro, this year or in the near future, you’re kidding yourselves,” Ware said.

Carl Iobst, a local Tea Party Patriot, acknowledged that it was valid to pick apart the economic outlook. However, he ultimately said it was worth a try in the absence of other tourism stimulus ideas.

“Of course the studies that have been done are not perfect — but it comes down to the gut,” Iobst said. “If we do nothing, we can expect nothing. We have to do something.”

Economic skepticism aside, one of the biggest sticking points for those not yet onboard with the agreement is whether the county should offer a grant, or just a loan.

As a starting point, Jackson County is using the same language Swain used in its agreement with the railroad. That contract states that, ultimately, the money will not have to be paid back if the railroad meets certain performance benchmarks. 

County Commissioner Vickie Green asked why Jackson County has to agree to the same type of deal as Swain County did.

“Just because Swain County did something … doesn’t mean that Jackson County has to do the same thing if the potential is there for Jackson County to be repaid,” she said.

Jackson County Attorney Jay Coward has reworked the initial draft two times already. The latest rendition was presented to commissioners at the meeting, but even he suggested it needed more. And he asked that definitive decisions be made by commissioners on key points such as whether the loan should be repaid and how funds will be released to the Great Smoky Mountains Railroad. 

“I do not regard it as being the last version — it’s certainly not ready today,” Coward said.

Instead, the commissioners approved a letter of intent to continue to work with the railroad towards a final deal. But two commissioners, Charles Elders and Doug Cody, expressed their urgency towards reaching a final agreement.

“We’ve got to get going to get this thing in our lifetime,” Elders said. “If we don’t get this started soon, we’re going to pass the boat up again and well be sitting with nothing.”

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