California company will operate V&T in 2010

A California company will operate the reconstructed Virginia & Truckee Railway in 2010, which is expected to attract 73,000 riders and make a $420,000 net income in its first year.

The Nevada Commission for the Reconstruction of the V&T Railway unanimously selected Sierra Railroad after a five-hour meeting Tuesday afternoon.

"I think we were uniquely suited for this particular situation because of the history and our proximity (to the Carson City area)," said Chris Hart, president of the company's tourism division.

The Oakdale, Calif., company's business plan beat out railroad giant American Heritage Railways, which operates the acclaimed Durango & Silverton Narrow Gauge Railroad. Sierra Railroad also won the contract to operate the $40 million railroad over a small family-owned railroad that already operates on the existing two miles of track in Virginia City.

"I'm disappointed with the decision," said Tom Gray, co-owner of the V&T Railroad. "I think by far we're a better operator, but partnership with another operator will make it even stronger."

The V&T board, which is rebuilding the historic 16 miles of right-of-way between Gold Hill and Carson City, will negotiate with Sierra Railroad before signing a long-term operation contract in early 2007. The public board chose an operator this early so that it can help make building decisions. The 18-mile V&T Railway is being reconstructed using private funds and taxpayer monies. So far, 1.4 miles of track has been reconstructed in addition to the two miles in Virginia City.

Several commissioners said they favored American Heritage just based off its submitted business plans, but then flip-flopped after hearing Sierra Railroad's presentation. The board's consultant ranked Sierra Railroad as its top pick, followed by American Heritage and then the V&T Railroad, owned by the Gray Family.

Commissioner Marv Teixeira, who is also the Carson City mayor, said the community will have invested $32 million into this project, through room and sales tax revenue, and it needs a dedicated partner. He called this the board's "most important decision."

"What I got out of Sierra is that they have passion for the product," he said. "I want to see that same passion in negotiations and when you're working with me at the Legislature. We've got to do some selling."

Teixeira hopes to secure about $13 million more in project funding from the state and feds.

Commissioners said Sierra Railroad can help develop a depot in Carson City and market the project successfully around the country and globally through print campaigns and a Web site. The company also hopes to get the attention of Hollywood film producers.

"They indicated that they can stand alone on their own - they can do it," said Commissioner John Flanagan.

Commissioner Ron Allen said he favored Sierra Railroad because the company's hub of operations is much closer to Carson City than Durango, Colo. Senior Vice President Jeff Jackson, of American Heritage, could not be reached for comment following the meeting.

"Sierra has the things that are needed and required here," Allen said.

Gray said he is now interested in selling, leasing or partnering with Sierra Railroad. "Sierra is a stronger partner," Gray said after the meeting. "They need us, we need them."

Sierra's Hart said they plan on employing from 25 to 50 people in Carson City and Virginia City for the track maintenance crews, the repair shop, and for office and management positions. He said the V&T will be marketed on its own and with the company's three other trains in Northern California.

Hart said he is eager to make a deal with the V&T Railroad to get the steam engine up to Virginia City. And, one day soon, this tourist track may attract thousands with dinner trains and special events.

• Contact reporter Becky Bosshart at bbosshart@nevadaappeal.com or 881-1212.

Projected V&T Railway revenue:

2010

Total train trips: 360

Passengers: 73,000

Net income: $420,000

2011

Total trains: 500

Passengers: 100,000

Net income: $700,000

2012

Total trains: 690

Passengers: 135,000

Net income: $1.1 million

Source: Sierra Railroad

business plan