3 companies to bid on SLRG

Three companies will bid on the San Luis Rio Grande Railroad at 10 a.m. Thursday in Denver. File photo

Auction slated for Thursday

THIS STORY HAS BEEN UPDATED WITH A STATEMENT FROM OmniTRAX's CEO. 9:49 A.M. 11/17/2022

ALAMOSA — Three years after going into bankruptcy, San Luis Rio Grande Railroad goes up for auction at 10 a.m. Thursday in Denver. However, in a last-minute development, there will be three qualified bidders at the auction.

OmniTRAX, self-described as “powered by rail and real estate,” made the first offer for the railroad. OmniTRAX is the third largest operator of short-line railroads throughout the United States. A subsidiary of Denver-based Broe Real Estate, OmniTRAX promotes its transportation and shipping services hand in hand with, for those interested in investment and industrial development of property along the railroad line.

Then, according to trustee William Brandt, a second bidder appeared and made a higher bid. That second bidder is Colorado Pacific Railroad.

Colorado Pacific Railroad (CPRR) was originally created by Stefan Soloviev, owner of Crossroads Agriculture which has significant land devoted to farming and ranching in eastern Colorado, western Kansas, New Mexico and parts of New York. During the years Soloviev was establishing his ag operations on the eastern plains, he became aware that the “Towner line”, a no longer operational 156-mile short line railroad that runs from the Kansas border to Boone Junction outside of Pueblo, had been sold to V & S Railway, LLC., a railroad salvage company that was in the process of having the line designated as abandoned by the Surface Transportation Board with ultimate plans to tear up the tracks — made of high-quality steel in the early 1900s — and sell the tracks for scrap.

Soloviev, who had become very familiar with the area and its producers because of his own local agricultural operations, knew what a permanently devastating impact that would have on the economies of the counties along the line. He also wanted to provide a shipping alternative – not only for his own operations but also for local farmers in eastern “Coloradah” (as he pronounces it).

He took V & S to court and was ultimately successful, ultimately purchasing and resurrecting the Towner Line. Since the acquisition, he has made the necessary investments to not just rehabilitate the line but also upgrade it and return it to operation after going unused for almost 40 years.

“The Colorado Pacific and the Soloviev Group (as we have done with the Towner line) would keep the SLRG in service and make any necessary improvements to have it operating at its highest possible level,” Soloviev said.

“We just put in a 6-million-bushel grain facility that will be sending unit trains (110 cars) of grain to the west coast and the gul from just west of the Kansas border where the CPRR starts.

“I highly doubt any of the other bidders, including OmniTRAX, are interested in doing anything but scrapping the line and killing Colorado jobs in doing so. The Soloviev Group, Crossroads and the CPRR are dedicated to doing the best thing here for the people of Colorado.”

Brandt said that, for 16 years, he rented an apartment in the Solow building owned by Soloviev and his father that was considered to be some of the most prime real estate in New York City. Soloviev is now the sole owner, following his father’s death.

“I have the highest respect for how that family does business,” Brandt said. “They really know what they’re doing. They’re the real deal.”

A third bidder then appeared, as well. The bidder is Big Shoulders Capital, a Chicago-based financial lender, that is bidding in combination with the San Luis Central Railroad and railroad executive Edward Burkhardt.

The San Luis Central Railroad is a 13-mile line that runs from Center to Monte Vista.

“Big Shoulders was the party that threw the SLRG into receivership in 2019,” Brandt said. “I’ve been sparring with them ever since. I think they’re trying to find a way to recover on their loan and they teamed up with Burkhardt and the SLC to get it done. Ed Burkhardt is a long-time player in the railroad industry. He owns a 13-mile-long railroad that runs from Center to Monte Vista. That railroad feeds into the SLRG, and the only way they can get their cars to market is to hook up with the SLRG that then connects to the Union Pacific. So Burkhardt is probably concerned.”

All three bidders have posted a deposit and “we’re ready to go,” Brandt said.

The company that has the highest bid at the end of the auction will have the right to pursue the purchase of the line, but the deal will not be done for several weeks. 

According to Brandt, the judge will have a final hearing on Nov. 28 to announce the decision. 

During the time between the auction and that final hearing, Brandt will submit his recommendation to the court with a summary on which bid he considers to be the “highest and best” bid.

Since this story was published, OmniTRAX contacted the Valley Courier with the following statement.

“OmniTRAX has publicly committed to the restoration of the SLRG and continued economic development within San Luis Valley and any assertion to the contrary is a baseless attempt to distort our clear commitment to local investment and growth,” said OmniTRAX CEO Dean Piacente.

“OmniTRAX has a decades long history of investing in our railroads and the communities they serve as evidenced by the documented support for our SLRG bid from a broad coalition of economic development agencies, rail customers, and industry partners provided to Trustee Brandt and the court. The misinformation being perpetuated by competing biding parties, coupled with the Trustee’s unbalanced public statements, are providing an inaccurate picture of the process and its participants.”

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