The Friends of the Stewartstown Railroad was formed in 2006 when concerned railfans realized an organization independent of the railroad company itself was desirable to recruit volunteers to help reactivate the then-dormant railroad.
In the spring of 2004 the Stewartstown Railroad experienced a relatively minor derailment on one of its “Easter Bunny” excursions. This incident highlighted the effect of years of deferred maintenance on the railroad’s properties. During the following two years the prior management team, led by an aging and ailing George M. Hart, was not able to develop a plan to rehabilitate the line. As a result, people who had been volunteering on the railroad started drifting away from the company to pursue other volunteer activities.
One of the first projects the newly-formed Friends organization pursued was contacting former volunteers to weigh their interest in joining the new organization. There was a tepid response, but enough positive feedback to encourage the founding members to push forward. The Friends of the Stewartstown Railroad, Inc., has been growing ever since.
While the railroad company management team in place in 2006 was not overly accepting of the new organization that attitude changed dramatically in 2008 when the passing of George M. Hart necessitated a change in the railroad company’s management.
The new management team welcomed the help of the Friends volunteers to rehabilitate the railroad so it could once again operate trains. It was soon realized that this would be a very long process, as, by this time, the railroad had not seen any measurable amount of trackwork, let alone equipment maintenance, in four years. And, the railroad’s new management team quickly learned how little money the railroad had on hand to pay for such work.
Within a few weeks of Mr. Hart’s passing, it also became known that money Mr. Hart had advanced to the railroad from time-to-time over his 25-year tenure on the Stewartstown Railroad management team, would need to be repaid to his estate. Repaid in full—an amount just over $352,000.00. The railroad which had barely enough money on hand to pay its utility bills (directors were asked at more than one meeting to donate their pocket change to help) now faced a huge financial obligation. This, just as the country was entering what has been described as the worst economic downturn since the “Great Depression” of the 1930s. With little income and a credit market practically “frozen” by the recession and the resulting failure of banks due to the collapse of the real estate mortgage business, there was little hope for the Stewartstown Railroad to survive if the Hart Estate debt had to be repaid.
Still, the Friends decided to push ahead. With the permission of the railroad company the Friends started operating “open house” events at the station in Stewartstown one Sunday a month. Even though trains were not running, the Friends cleaned-up the waiting room and ticket office to show visitors what an early 20th century small town train station looked like. With support of free publicity from the local media outlets, folks started to drop-by and make donations to the Friends to help with restoration efforts. Sales from the Friends modest “gift shop” inventory augmented these donations.
After much consideration, a “capital campaign” was launched by the Friends to raise even more money to help save the railroad. The Friends goal was to purchase the debt from the Hart Estate and hold it as a long-term investment until the railroad had the funds to buy it back from the Friends.
The continuing poor national economy showed no signs of improving and, in fact, for a couple of years seemed to be getting worse. Unemployment was rising and businesses were closing. Folks and organizations that only a few years earlier would have been able to donate to the Friends suddenly found themselves in their own “survival mode.” It would be several years before the railroad would be able to refinance its debt to the Hart Estate. In the meantime, the Hart Estate started pursuing legal action against the railroad company to have the railroad declared abandoned so the Hart Estate could seize assets to satisfy the debt it was owed.
By 2013, with the economy slowly recovering, the Stewartstown Railroad Company was able to raise enough money to settle its debt to the Hart Estate. The Friends of the Stewartstown Railroad was able to participate in this refinancing effort by purchasing a modest minority equity interest in the railroad company. The proceeds from the Friends investment was used to retire a like-amount of the Hart Estate debt.
Even though the Friends of the Stewartstown Railroad, Inc., holds a minority equity interest in the Stewartstown Railroad Company, the two organizations are separate and independent of each other. The equity interest held by the Friends in the railroad company is part of the Friends investment portfolio.