A long time east Texas attraction may have to close down because of cash flow problems.  If the popular Texas State Railroad can't get a cash infusion soon and find ways to make money 12 months a year, its managers say it will go out of business this week.


The Texas State Railroad is a popular 19th century vintage passenger train that carries paying passengers -- mostly tourists --on a 25 mile ride  through the Piney Woods between Rusk and Palestine.

It was originally a private rail line built in the late 1800s, and for decades various owners used it for a variety of commercial purposes.  But when its commercial viability dried up in the 1970s, the Texas Legislature turned the railroad over to the Texas Parks and Wildlife Department to be used as a state park. The rail line is now managed by American Heritage Railways, and it's in financial trouble.

Palestine city manager Michel Orht says the railroad makes most of its money during the popular Polar Express attraction, but getting money to operate the rest of the year is a challenge that has forced them to ask the cities of Palestine and Rusk for help.

American Heritage officials say they need operating cash to make ends meet and help the company break even for the year.  They also want Rusk and Palestine to forgive the loans both cities gave to keep the line going, to maintain the parks at both ends of the line and help pay for some of the railroad's marketing programs.

Orht says American heritage has told them if it can't come up with the funding it needs fairly soon they'll have to shut the railroad down, as soon as this week.

via Texas State Railroad owner seeking financial relief » Local News » The Palestine Herald, Palestine, Texas.

The problem here is that the Texas State Railroad has never made a profit as a tourist attraction.  It lost 2 million dollars a year when it was owned by the Texas Parks and Wildlife Department.  American Heritage Railways loses about 150 thousand dollars a year.

The question is: even if it gets money to get through the rest of the year, how in the world can it hope to stay in business that way?