PALESTINE, Tx. – A treasured Texas institution appears to have been derailed.
The East Texas rail line shut down just after a successful Christmas run and the operators have left many asking the question: What happened to their livelihood and the money?
Just a few weeks ago, the sounds and spirit of the Christmas season were on full display as the Polar Express locomotive chugged through the Piney Woods on its way into children’s imaginations.
The Polar Express is the successful seasonal run of the Texas State Railroad, traveling from Palestine to the depot in Rusk, where vintage locomotives and rail cars have been restored and revered as a beloved tourist attraction in East Texas for the past 40 years.
“This is our treasure, this is our economic drive for this region and we want to keep it here and keep it running,” said Bob Goldsberry, president of the Texas State Railroad Authority board.
By Christmas of last year, the Polar Express and the Texas State Railroad had just enjoyed their most profitable year ever, capping two straight years of success. Five days later, all of the employees were gathered together at the Rusk Depot. They were all congratulated, then, all but just a few of them were fired.
“To be honest with you, that morning, when we came in here, we all thought we might get bonuses,” said Mike Dorsey. “That was not the case.”
Dorsey has been shop foreman for the Texas State Railroad for the past six years.
He was among the 25 employees claiming he was terminated without explanation.
“When we have an organization such as this that is doing such a good job, and then it’s kind of yanked away from us, it hurts,” he said.
Janet Gregg was the Texas Railroad’s head of marketing. She too was fired.
“I feel like that was a slap in the face to every long-term, year-round employee who has given years of their lives to saving that railroad,” she said.
Gregg says she sensed trouble four years ago when a company called Iowa Pacific Holdings of Chicago was hired to manage and operate the trains.
Iowa Pacific operates 9 rail lines in the United States, and at least two in Britain.
Gregg and others say even though the Texas State Railroad turned a profit the past two years, Iowa Pacific had trouble paying the bills.
Goldsberry is careful with his criticism of Iowa Pacific.
“They are not doing what they are supposed to be doing,” he said. “But at the same token, trains were still running, people were still coming into the depots.”
But News 8 has learned rail officials in Texas knew there was trouble coming down the tracks.
Records obtained by News 8 including a draft copy of an un-filed affidavit, claiming that Iowa Pacific had defaulted on two loans and failed to pay the annual rental payment for the last five years.
The un-filed affidavit claims Iowa Pacific owes the Railroad Authority more than $2 million in lease payments and loans.
News 8 has sent Iowa Pacific officials repeated emails and left numerous phone messages seeking comment. No one has responded.
Today, even with most of the employees gone, Texas State Railroad officials still hold out hope.
In fact, signs posted at the depot and information on the internet recently claimed employees will be rehired and operations will resume March 4.
Why is Goldsberry optimistic? "Because I have a commitment from them that they are going to do it," he told News 8.
But News 8 has learned Iowa Pacific is shutting down railroad operations and terminating or failing to pay employees across the country, such as Richard White, a Polar Express Santa in New York State.
“The respect and thanks I get from this company is, ‘Oh, by the way, you’re not getting paid,’” he told WTEN-TV in New York.
Next month, Iowa Pacific Holdings is ending its role in operating the Hoosier State train, which runs between Chicago and Indianapolis. According to published reports, it’s because Iowa Pacific needed more money than it was getting.
Also, according to company insiders, Iowa Pacific's Massachusetts Costal railroad terminated about 40 employees in December. News 8 also discovered 13 employee complaints on file with the Massachusetts Attorney General claiming they were not getting paid on time.
And despite the terminations in East Texas, earlier this week, Iowa Pacific was still selling tickets for the Texas State Railroad’s March 4th Piney Woods Excursion.
Gregg says local railroad officials need to cut ties with Iowa Pacific and find a way to save the railroad, and the popular Polar Express attraction.
“Obviously, Iowa Pacific has no money,” she said. “If they did they wouldn’t have fired everybody they would have just laid us off because we are the number one railroad in the company in revenue and ridership.”
And for those employees who lost their jobs, realization is settling in, this could be the end of the line.
“When we have an organization such as this that is doing such a good job and then it’s kind of yanked away from us it hurts,” Dorsey said.