RG County has more time to respond to SLRG bid process

RIO GRANDE COUNTY — In an interview with Valley Publishing on Monday, March 7, Rio Grande County Commissioner John Noffsker announced that the county will have more time before it needs to respond to any bid that may come through for the purchase of the San Luis Rio Grande Railroad (SLRG).

Noffsker has been working to ensure that the railroad remains a viable source of commerce for freight in the San Luis Valley and though an actual time extension was not granted by the bankruptcy court judge, the county will have more time to respond to bids. The bankruptcy trustee is actively seeking bids currently.

Noffsker is working through the Rio Grande County attorney and outside legal representation hired by Rio Grande County to try and get more support from all the counties involved in the SLRG bankruptcy case.

According to Noffsker, the bankruptcy court has ruled that about $3.6 million is owed to several counties throughout the San Luis Valley and Huerfano County for back property taxes but even though this money would be paid when a sale is made, it would ultimately leave the counties involved with little to no say on the future of the SLRG.

“Our first and foremost goal is the public interest of the railroad. We want this railroad to continue to be a viable asset to the Valley and we want to see it survive. We are currently exploring creative financial solutions to ensure the viability of the railroad because the Valley needs it,” said Noffsker. 

A potential bid that was being considered in the last week has fallen through making this the fourth bid on the purchase of the line to come to no result mainly due to the expense a new owner would have to pay on top of what they needed to sustain the line once purchased. 

One option Noffsker is proposing is for the counties included in the bankruptcy case to consider offering a new owner a chance to pay the back property taxes over five years instead of all at once. If an agreement to do this can be reached, it would allow the counties to continue to have a say in what happens to the line.

“We need to look at the future of this line now more than ever. If we lose the low cost of shipping and receiving freight through the railroad it could mean a huge hit on the local agricultural community. We don’t have multi-million dollar offers on the table, mostly we have seen bids from short-line railroad owners that have fallen through. Our biggest fear is that a new owner or even the court could decide it is more worthwhile to scrap the line and, in that case, we lose our commerce,” Noffsker said. “One of the load companies involved in the bankruptcy has thrown out the idea that scrapping the line may be in the best interest of the court, but it is not in the best interest of the people.”

The importance of keeping the railroad here in the Valley is more than just tourism. The agricultural community in the Valley relies heavily on the line running to ship and receive goods at lower costs than what it costs to ship or receive through trucking freight.

“Rail is by far the most cost-effective way to ship and receive goods through our agricultural community," Noffsker said. "We have the obligation to protect the low costs for our farmers and ranchers because it directly impacts the economy here in the Valley. We cannot solely rely on tourism, as we learned when the COVID pandemic hit, there are variables in the tourism market that have to be considered.”

It was estimated that if the line was gone it would lead to an additional 24,000 trucks a year on the road, higher costs in fuel and higher costs in overall freight.

“Our main focus is on losing the low-cost freight for the agricultural community without sacrificing any potential future uses like tourism,” Noffsker said.

Rio Grande County is waiting to receive financial reports for the line from the past several years to review and a bankruptcy group out of Texas is helping draft a way forward for the county to be successful.

“I can’t predict what the future of the line will be, but it is in our best interest to not let go of this essential asset. We want to protect the Valley’s vital interest,” Noffsker said.

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