BERLIN – The creation of an excursion railroad operation in Worcester County could have as much as a $17.6 million impact on the local economy, according to a report released this week.
At Tuesday’s meeting of the Worcester County Commissioners, Randy Gustafson of Stone Consulting went over the potential cost and economic impact of a tourist train in the Berlin area. He stressed that to make money, such an enterprise would have to focus on special event trains, such as a Polar Express ride, in addition to excursion trips.
“I think everybody went into this thinking it would be a reconstruction of the Ocean City Western [railroad},” Gustafson said. “This has part of that in it but bottom line it’s a completely different business.”
Officials have been discussing the possibility of bringing an excursion train, to operate on the Maryland Delaware Railroad Co. line, to the area since last year. In his initial reports, Gustafson outlined a train operation that would provide tourist trips throughout the year as well as several themed rides during the winter on a roughly eight-mile stretch of track. Capital costs associated with that plan, depending on location and length, range from $1.2 million to $3 million.
This week Gustafson offered an in-depth financial analysis of the proposal, which he said would come about through an agreement between the railroad, a rail events company and a non-profit. The railroad, he said, would provide the track and the locomotive, while the rail events company would facilitate themed rides like Polar Express.
“This thing is too big for it to be run with a batch of volunteers,” Gustafson said.
While there are several potential routes for such a train to take, Gustafson told the commissioners he’d based his report off a route centered in Berlin. He estimates an excursion train there could see as many as 72,650 riders a year, with more than half of them buying tickets for the themed rides between Halloween and Christmas. Tickets, he said, would start in the $12-$14 range for regular excursion trips and could increase to as much as $42 a ticket for the Polar Express train.
Some commissioners expressed concern about the $12-$14 ticket price.
“The railroad’s going to have a lot of competition,” Commissioner Bud Church said.
Gustafson explained that price was in line with what tourists paid to go on boat rides in Ocean City.
Commissioner Joe Mitrecic said he didn’t think it was an appropriate comparison. He said when tourists paid to go out on a boat, that boat took them out on the water — a unique experience for many vacationers.
“I support it,” he said of the railroad. “I hope it works. I just don’t see the numbers working out that way.”
Gustafson stressed that evening special event train rides had a stronger economic impact than daily excursion trips.
“The scenery isn’t important,” he said, adding that after the themed ride tourists would be looking for a place to stay and a restaurant where they could eat dinner. “That’s the secret of your economic impact.”
Capital expenses related to setting up an excursion railroad in Berlin are estimated at $2.3 million, according to Gustafson. That comes from buying or leasing equipment, repairing the track and building a station.
Once it’s set up, the consultant expects the railroad’s annual operating expenses to come to $1.6 million while revenue would amount to just under $2 million a year.
The economic impact associated with the railroad, though, is $8.4 million. Associated visitor spending impact should be $9.1 million, meaning the enterprise could have a more than $17 million impact on the region as a whole.
“This is a good number,” Gustafson said.
Gustafson said the next step for the project was an agreement between the parties involved — namely the railroad company and a rail events company — and the addition of a non-profit or private partner.
Merry Mears, the county’s deputy economic development director, said she would continue facilitating discussions with potential private investors and municipal governments that had shown interest in the venture.
Following the consultant’s presentation, Snow Hill Mayor Charlie Dorman — who’d been watching with several downtown business owners — asked why the south end of the county wasn’t being considered for the excursion train.
Commissioner Jim Bunting said the route was up to the railroad company.
“The Worcester County Commissioners as far as cost will have nothing to do with the project,” he said.