Alternate bidder to move ahead after auction winner misses down payment
By Tim Rowland
Revolution Rail, a North Creek rail-biking company, will purchase the defunct Saratoga and North Creek Railway for $2.7 million under an agreement filed with a federal bankruptcy court in Denver.
The filing is the latest twist in the curious saga of the Tahawus Line, a lonesome, 30-mile spur to an old titanium mine in the Town of Newcomb near the popular Upper Works trailhead to the southern High Peaks.
Barring another unusual development, it also ends a brief foray into the railroad business by a New Mexico couple operating as Doc N Duchess Railway LLC. They had announced a multi-million-dollar plan to run freight and passenger service on the line while reviving the long-gone titanium operation.
Court trustee William Brandt Jr. said the focus shifted from Doc N Duchess to Revolution Rail this month after the couple, John and Carol McLean Wright, failed to produce a required down payment on the railroad’s assets after winning an auction for them in March.
The railroad was built during World War II by a U.S. government desperate for titanium. The mine itself was owned by National Lead Co., which shut down operations at Tahawus 40 years ago. Since then, the railroad has withered, making headlines only when carriers failed to make a go of it, or, as happened in 2018, it gained notoriety when the owner parked oil tankers on the line, which for a third of its length runs through the Adirondack Forest Preserve.
Many conservation and recreational advocates felt the line would be best used as a rail trail, but local governments held fast to the idea that it could once again become commercially viable.
Briefly, it seemed that would be the case. The Wrights’ winning bid was $3.3 million, far more than onlookers thought the line was worth. They had also announced plans to buy the old Tahawus titanium mine and a fleet of rolling stock — including a steam engine that ran on restaurant grease — that would revive the titanium trade. They proposed harvesting other rare metals and running excursion passenger trains.
Brandt said it is not clear whether the Wrights ever had the needed financing.
“I must say there are now a number of questions on many people’s part as to whether the Wrights were ever really capable of doing what they claimed,” Brandt said in an email.
The Wrights previously said their investors are European and have been unable to move funds in a timely fashion due to Russia’s war with Ukraine and the scrutiny now afforded to large asset transfers. They also said they were caught unaware when told they would have to produce a down payment in excess of the $35,000.
Brandt disputed that, saying that the three bidders had been informed that additional capital would be required. “When the bidding reached approximately $2.8 million,” the filing states, “the Plan Administrator paused the auction to inform the bidders that given the fact that the amounts had risen significantly and materially above the original (baseline) bid, at the conclusion of the auction, the Plan Administrator would require the successful bidder to significantly ‘upscale’ their deposit …”
On March 11, Brandt and the Wrights agreed on an additional $250,000 deposit, according to court papers.
Shortly later, Doc N Duchess asked for and received an extension until April 1, provided the amount of the deposit was $500,000.
According to court documents, Doc N Duchess missed that deadline and failed to file ”the requisite paperwork with the Surface Transportation Board requesting regulatory approval of their purchase and assumption of Saratoga and North Creek Railway’s common carrier status.”
As the days went by, Brandt said he was still prepared to work with Doc N Duchess if their financing materialized, but that never happened.
Owners of Revolution Rail could not be immediately reached, but Brandt said they had met conditions of the sale, which included a $475,000 deposit and a request for carrier status from the STB. The organization in the past has said it would like to initiate a northern version of its popular North Creek rail biking enterprise, and will contract with a short-line hauler to run occasional freight from the Tahawus mine, which currently transports loads of gravel and other aggregate by truck.
Rail biking allows seated riders to pedal bike-like machines on rails.
In his court filing, Brandt acknowledged that the high selling price remained a potential obstacle to closure, but noted that the other option was to wipe the slate clean and rerun the auction. Since Doc N Duchess would be unlikely to qualify, and the third participant in the auction, Sierra Railway, had dropped out at the $2 million mark, creditors of the railway would recoup less of what they are owed, were the auction to be held again.