Apache Railway sold
Written by Jenifer Nunez, assistant editor
The 98-year-old Apache Railway Company, a shortline railroad operating in Navajo County, Ariz., has been purchased by an entity formed by Aztec Land and Cattle Company Limited and related entities.
The three-year effort to save the Apache began after the 2012 closure of the Catalyst Paper Mill, which ultimately led to the mill and the Apache being purchased out of bankruptcy by a California investment group. Fearing that the Apache would be scrapped, concerned Navajo County leaders formed the Snowflake Community Foundation (SCF) to purchase the Apache from the investment group using short-term financing. Under SCF’s ownership over the past three years, the Apache continued operations and became profitable again.
In May 2015, SCF filed for U.S. Bankruptcy Court protection as it continued to seek permanent financing for the railway and thereby ensure the railway would continue to be one of the region’s lifelines for jobs and economic development. The court recently established a November 30, 2015, deadline for SCF’s debt to be repaid. Last week, the court approved the sale of the Apache stock to the new ownership group. The deal, which closed Monday, November 30, extinguishes SCF’s debt and related liens on Apache assets and allows the railway to continue operations as it has for nearly the past century.
“The Apache Railway has used up another one of its nine lives and we are glad it is still serving the economic development of our community and Navajo County,” said Town of Snowflake Mayor Tom Poscharsky.
The Apache’s management will remain in place. Its workforce, which three years ago consisted of eight employees, has increased to 21. The workforce will continue to expand to meet demand for the Apache’s rail services.
Through a collaborative local and state effort, equity investors were found to contribute significant capital to the acquisition of the railroad. The effort was complemented with a $2.5-million joint loan from the Arizona Commerce Authority’s Arizona Innovation Accelerator Fund program ($1.75 million) and Arizona MultiBank ($750,000).
“The Apache is such a tremendous asset to our community,” said Navajo County Supervisor Jason Whiting. “It provides Navajo County and the Town of Snowflake a connection to other markets, increasing our ability to better do business throughout the southwest. For economic development purposes, the more assets a community has, the better chance it will attract meaningful investment and the jobs that go with it.”
