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Durango railroad’s liability for 416 Fire worries economic leaders

‘It will all come down to what the insurance will cover’
Economic development officials say a heavy liability on the Durango & Silverton Narrow Gauge Railroad would likely sap Durango’s and the region’s economic vitality for years.

Economic leaders warned Tuesday any final ruling in a 416 Fire lawsuit that saddles the Durango & Silverton Narrow Gauge Railroad with a burdensome financial penalty will be counterproductive – likely bruising economic vitality for years.

Tim Walsworth, executive director of the Business Improvement District, said in an email, “The railroad has insurance that will pay for any damages. It is BID’s hope that the future of the railroad is not put in jeopardy by this lawsuit.”

The federal government is seeking $25 million from the D&SNG for damages incurred as a result of fighting the fire, which burned 54,000 acres mostly in the San Juan National Forest north of Durango.

Both Walsworth and Durango Chamber of Commerce Executive Director Jack Llewellyn noted the D&SNG has strove and invested to minimize the fire danger posed by sending historic 19th-century coal-burning locomotives on a 2,793-foot climb from Durango to Silverton.

Walsworth said, “Durango cannot afford to lose the railroad, nor can we afford for the railroad to operate the same way it has in the past when conditions are dangerous. The good news is that the railroad has made changes and will continue to look at how to operate as safely as possible.”

He added that the D&SNG has devoted $7 million to upgrades, including converting a coal-burning locomotive to burn oil to minimize the chance the historic train will ignite future destructive wildland fires in its 45-mile trek from Durango to Silverton.

D&SNG has reported summer bookings should exceed 150,000 riders, perhaps rising as high as 160,000 riders. In addition, total riders are expected to reach 200,000 this year.

Llewellyn estimated the railroad brings in $250 million to the regional economy.

“The DSNGRR has been an integral part of Durango since the late 1800s. From the mining days to tourists, the train is an economic driver. The train’s impact is $250 million to the local region. With over 200 employees peak season and 100 employees year-round, the train supports families and beyond,” he said in an email.

The railroad’s economic benefit to downtown Durango, La Plata County and the broader region is huge, Walsworth added.

“Remember also that the railroad contributes over $300,000 annually to nonprofit organizations. This cannot be overlooked,” Walsworth said.

Roger Zalneraitis, former executive director of the La Plata County Economic Development Alliance, said the big question is how much liability will eventually be assessed and how much will be covered by D&SNG’s insurance carrier.

“There was more than $40 million in damages. I wouldn’t be surprised if some negotiations are going on,” he said. “It will all come down to what the insurance will cover.

“If a large part of the damages is covered, the impact to the train and to the town will not be too severe. If it doesn’t, the hit will be huge – to the train and to the town. A lot of things would change for the train and the town, and not for the better.”

parmijo@durangoherald.com

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