The 98-year-old Apache Railway Company, a short-line railroad operating in Navajo County, Ariz., announced that it has been purchased by an entity formed by Aztec Land and Cattle Company Limited and related entities. The deal will enable the railway to see its centennial and beyond.
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 had 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’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).
In addition to the assistance of the Arizona Commerce Authority, other federal, state and local leaders have assisted the Apache during its long journey. United States Senators John McCain and Jeff Flake, Congresswoman Ann Kirkpatrick, Governor Doug Ducey and his staff all played important roles during the last three years. Locally, the Apache was aided by the Snowflake Town Council, former Snowflake Town Manager Paul Watson (now with Navajo County), Snowflake Mayor Tom Poscharsky, and former Vice Mayor Jason Whiting (now Navajo County Supervisor). Apache customers Hormel Foods and Preferred Sands also lent key support to the effort.
