Iowa Pacific Holdings Gone: Texas State Railroad Board approves tentative contract with Arizona company

March 30, 2017

By Caleb Beames, Multi-Media Journalist, KTRE ABC 9, March 29, 2017

RUSK, TX (KTRE) – During a meeting Wednesday morning, the board for the Texas State Railroad gave its approval for a tentative offer to have the Arizona-based Western Group to take over operations of the railroad.

The railroad’s contract with Iowa Pacific is scheduled to end in May. The board sent a 120-day termination notice to Iowa Pacific in January if the company could not pay back on their estimated $2 million in loan payments owed to the cities of Rusk and Palestine.

At today’s meeting the board’s legal counsel noted that he was called by Iowa Pacific and told that the group did have an investor on the way that would be good for money and the plan was for them to start making IRS payments. Iowa Pacific had offered the TSRA $500,000 up front as long as they could remain the operator and set up a payment system for the rest.

The tentative contract with the Western Group would call for a five-year term on the lease and an up-front initial payment of $150,000. The proposed contract also calls for current Texas State railroad employees to be allowed to stay on and retired employees to continue receiving retirement coverage.

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