Here's a website detailing the non-profit set up for the restoration of GSMR's 722 and 1702.

http://wjsawyeredu.org/default.aspx

Matt Bumgarner

Haven't these two been in pieces for the last five years (or more)?

And the further question is, who actually OWNS the two locos? Isn't 722 under long-term lease from the Asheville NRHS?

Is there not a conflict with a 501(c)3 disbursing money to a for-profit enterprise's assets?

I am wondering how that works as well. American Heritage Railways is a large for profit company that operates a number of tourist railroads. I am all for more steam but the little voice in my head is saying "does not compute". In theory how different is this venture from a foundation gathering donations to renovate a building and then turn it over to Walmart?

#722 was always owned by Southern/NS after being re-acquired from the ET&WNC. During the end-days of the NS excursion era, she was on "permanent loan" to the Asheville Chapter-NRHS from the railroad. When the chapter had to abandon its museum plans, #722 would have been homeless.

GSMR then purchased the locomotive from NS, and it was moved from the Asheville display track to the Murphy Branch. So, in short, GSMR has owned the engine outright.

If I understand this new foundation properly, it looks like the railroad will donate both engines to the new 501(c)3 which will raise funds and oversee their restorations. After which, both locos will then be leased BACK to GSMR for $1/yr plus maintenance.

Matt Bumgarner

There is the possibility that this can be done perfectly legal, but there is certainly the appearance of impropriety. Why would Harper want those two engines anyway with his Swedish junk? (That has to be the bone-headed move of the decade, at least.)

It sounds as though American Heritage is quickly coming up with as many avenues as possible to practice crony capitalism (TXSRR, GSMR) and avoid spending their own money or taking their own risks. I understand the occassional grants for track or bridge rehab, but this is getting a bit out of hand. If they want to withdraw their risk, then perhaps they need to set up independent foundations to own these operations and then charge a management fee for operating them. At least that would be a bit more above board...

Don't get me wrong, as I think the 722 deserves better than what she has gotten.

Mike
Ratty Smell, NC

I can sort of see both sides of this argument.

On the one hand, it does indeed smell an awful lot like handing off the costs of a massive depreciation to a non-profit. (Ask any auto aficionado who spends $35K to restore a car that at BEST is worth $12K when he's done. The same kind of situation applies here--they can spend $500K-$1 million to restore a steamer, but they probably will be unable to sell it for anywhere near that much.)

On the other hand, there are folks that want to see 722 and 1702 run. And without this arrangement, it may never happen otherwise. Would we be looking at this differently if, say, the GSMR were offering to lease them for $25K a year each, AND was responsible for maintenance and upkeep?

This is by no means the first but is certainly the most visible. Several years ago there was a thread here about the NYS&W T&HS asking for donations to buy ties that would then be installed on the for profit Belvidere & Delaware RR. The response was something to the effect of it would benefit their steam train operation.

Is anyone aware of a non-railroad example?

I just don't see myself donating money to a foundation that is raising millions of dollars to help out a profit making company. I would open my wallet more readily if the engines were held by the foundation and used as guns for hire. More like the Reading FP7s that have made their way around the Northeast. It just seems like a scam to get the steamers restored without spending their own money. Ask American Heritage Railways what they would charge to lease a D&S 2-8-2 and use that as a starting point for the lease fee to be paid the foundation. Lastly the foundation board is loaded with GSMR employees, what's to say they don't decide to sell the restored locomotives back for $1.

The acquisition of the Swedish engine isn't a bad idea overall, but you have to look at the big picture. From what I've heard, GSMR got the Swedish trainset (engine and about 4-5 cars) for a very cheap price. If it was that good of a deal, it was worth it for the cars alone, and the engine is a bonus.

1702 needs a fair amount of work, and 722 is closer to a basket case than anything else. Neither of them are a quick fix. On the other hand, you have a Swedish engine that is close to being operable that would require minimal work to be placed in service. Think of it as a stop-gap to get steam operation there faster than would have otherwise been possible.

Now, how effective that 4-6-0 will be on that railroad is another question entirely with the high drivers dealing with those curves and some significant grades regardless of which direction you are going. There's a reason Southern used the big Ks1 2-8-0s on the west end of the line as much as possible, and there are pics of 722 switching out the tannery in Sylva during the steam era. In more recent times, 1702 was pushed to its limit and beyond on that railroad before it went out of service in 2004. The Murphy Branch is mountain railroad first and tourist railroad at a distant second--and that's not even counting the line west of Nantahala over Topton.

GSMR during the Malcolm MacNeill era was one of the finest steam operations out there, and seeing 1702 slugging out of Bryson City with the throttle on the roof pulling 15 cars (and a disguised diesel on the back end) was a sight to be seen, and the trips over Red Marble on 5% grades were spectacular to say the least. For hard working steam, it may well have been the best train ride outside of Cumbres & Toltec.

American Heritage has done a fairly good job dismantling what was the #3 most popular tourist railroad in the US (down in ridership only to Strasburg and White Pass & Yukon), and considering the fact that prices to ride have just about tripled in 10 years coupled with the total disappearance of steam, it's not really surprising. From someone who experienced the best years of operation on that line, it's been sad to see what has happened since the sale to American Heritage, but I'm cautiously optimistic at the moment. Maybe they are finally making steps to bring it back.
Kevin

I hear you Kevin, but still not sure I agree on the Swedish set being a good idea.

IIRC, the Swedish set cost $350k for the loco, coaches and and RDC. That's what? 8 pieces of equipment counting the tender? Perhaps not a bad piece price. But right after that, GSMR makes a proposal to Dillsboro that if they foot the $300k MOVING bill, then the railroad will re-establish operations to that town.

That's $650k total for the new trainset.

Going by figures on the new foundation website, that would have funded the return of 1702 to service completely, and taken care of 2/3 of 722.

GSMR is only 2 hours from me. Guess how motivated I am to go ride a Swedish trainset? If you answered less than zero, you would be correct.

722 on the otherhand? I would be there the following morning.

Matt

Wouldn't surprise me if it was a deal for the passenger cars mainly. I'll be the first to admit that I'm not that picky on what constitutes "steam", but it will be nice to have steam back up there again. The 1149 will definitely get a workout on that line, and the scenery is still some of the best on the east coast.

The news piece that came out a while back about using GSMR as collateral to buy Ghost Town in Maggie Valley tells me almost all I need to know about AHR and the GSMR property. That's why I was shocked when the steam purchase came about because they could have had steam running up there long before now if they wanted to put money into the place. We'll see what happens.

I'd love to see 722 running up there also. Really thought it was going to happen after chasing the inbound ferry move from Asheville in 2000ish right after AHR took over. The word at the time was that turntables were going to be installed all over the line (Dillsboro, Bryson City, Nantahala, Andrews), and that the railroad would be all steam within five years. There was even a possibility of acquiring the Dillsboro to Waynesville segment over Balsam Mountain, which would be a much shorter drive for tourists coming in from Asheville. There really was a lot of optimism at the time that AHR would take the GSMR to the next level to become the eastern D&S. Then, Greg Dodd and Steve Webb left and the opposite happened. By 2005, there was no steam on the GSMR.

Maybe someone can talk GSMR into leasing 630 for a week whenever NS brings it to Asheville. One would think the new steam program would have to get there at some point, right ;)
Kevin

Amen Kevin!

OTOH, while a bit puzzled about the seemingly contridictory statements about donation and leasing for $1, it is nice to see a nonprofit working with a friendly rail line who will gladly run steam in 2011. Makes a lot more sense than "restore her now, we'll worry about whether we can ever run her anywhere later."

15 years can evaporate much faster than a new set of tubes, and with very unfavorable recapitilization.

I'd probably take my Scandinavian wife on the Lutevisk dinner train behind the Swedish steamer once, which she has already told me is all the Lutevisk eating experience she ever wants to have, and actually one too many. It does perhaps open up a new range of themed events to promote Syttenede Mai, for example, or Krumkakke Days.

dave

I don't see any conflicts here. The foundation raises the cash for restoration. Following restoration, the rail line leases the engine for $1, but they have to pay for the employees and materials to maintain and run the engine, so it stays in good operating condition, basically protecting the foundations investment. Furthermore, the foundation also has access to the engine AND THE LINE as needed under the lease.

Sounds like perfect situation to me, especially in today's economy. Everyone wins, a steamer stays on the rails, and the foundation gets free repairs, storage, and maintenance AND the opportunity to use their engine at the leisure. I wish more places would follow this model. It's the first successful one that I've heard of in a long time.