Bid process begins for San Luis and Rio Grande Railroad

About $3.6 million in back property taxes owed to SLV counties

SAN LUIS VALLEY — Over the past four years, Rio Grande County has taken the lead on following the San Luis and Rio Grande Railroad through bankruptcy court, and a final decision on the fate of the line is nearing. Rio Grande County Commissioner John Noffsker has been the head of the SLGR bankruptcy dealings throughout the duration of the proceedings and is asking for help to see that the line continues to offer commerce availability and tourism in the Valley.

The line first went into bankruptcy in the spring of 2019, forcing the counties where the line resides to consider their options for the future of the line. Noffsker explains that now that the bankruptcy has been finalized and the line put up for sale, the potential for change is inevitable.

“We are currently faced with several potential outcomes when the line is sold, and it is no longer just about getting the property tax that is owed to several counties in the Valley,” he said.

When the line went into bankruptcy, it was determined that about $3.6 million was owed to several counties within the San Luis Valley in back property taxes. Part of the $3.6 million owed would go to Huerfano County and Rio Grande, Saguache, Alamosa, Conejos and Costilla counties here in the Valley.

“If the line sells for more than what is owed, then the debt will be paid," Noffsker said, "if there is any money left after the other debt is paid to other lenders, and the counties will no longer have a say in what happens to the line once the new owner takes possession.”

The main concern for the Valley according to Noffsker is the potential to lose the commerce that the line brings to the Valley.

“If the bankruptcy judge takes into account, the statutory public interest of the line then we have a chance. But if they look at it and say that it is not viable anyhow, public interest wouldn’t matter," Noffsker said. "We can’t force a railroad operator to continue to operate and go bankrupt as well. We have to figure out a way to do this, keep an interest in the line and help the new owner to be successful.”

Noffsker also said that if the county commissioners throughout the affected counties come to an agreement, one option would be to sell the line for less than what is owed with the stipulation that the new owner would eventually pay the debt over a longer period of time and the counties could potentially continue to have a say in what happens.

“For instance, if we were to take the $3.6 million that is owed in property tax and use it as leverage at the table when they go to sell this railroad or pay it towards the new owner with an agreement that the debt would be paid eventually, then we could possibly keep a say in what happens to the line," he said. "If the line were to sell for more than what is owed and the debt be paid immediately out of what is left of the bankruptcy, it is possible that the new owner would choose to scrap the line and close it for good because they were not making ends meet. If this were to happen, we could potentially lose a huge part of the commerce and financial stability the line brings here to the Valley.

“If we get the money that is owed, it is a one-time deal. We would rather see the railroad here and operational in 20 years,” he added.

At this time, Noffsker said that the line has been put up for bid and could sell by the end of the month. If an agreement to pursue another avenue cannot be reached soon, the counties could lose their say in what happens to the railroad altogether.

Rio Grande County recently hired an outside legal team to follow the bankruptcy proceedings so that they could stay in the loop.

“If we hadn’t done that, we would not have known what was about to happen,” Noffsker said.

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