Texas State Railroad executives say layoffs are seasonal and trains will resume running in March

Published on Friday, 30 December 2016 16:54 - Written by Augusta Robinson, augustarobinson@tylerpaper.com

An email sent Friday from the former Texas State Railroad marketing and special events manager indicated the railroad was closing and had terminated employees, but the railroad's operator said those layoffs are seasonal and trains will be back running in March.

An email sent by Janet Gregg on Friday morning indicated that railroad, popular for its Christmastime Polar Express train trips and other themed rides throughout the year, shut down and most of its employees had been terminated. Gregg said she was one of the employees to lose her job. 

"This is very disappointing, especially in light of the fact that we set a new record for ridership this year with both Polar Express and regular season riders," Gregg said in the email. 

Steve Gregory, Iowa Pacific's executive vice president of marketing, said Gregg's email wasn't authorized by the railroad. He said Gregg had been terminated and that other employees were laid off temporarily, as is typical this time of year. 

"This is not a permanent closure, it's a seasonal closure," Gregory said. 

Ed Ellis, president of Iowa Pacific Holdings, sent an email Friday afternoon indicating trains will resume running in the spring.

"Texas State Railroad is operating normally, which means there are no excursion trains in January or February. Excursion train operations will resume in March," Ellis said in the email. "In order to manage costs, headcount has been reduced for that period."

As of Friday afternoon, the railroad website continued to market ticket sales for a Valentine's Dinner Train scheduled for Feb. 11. 

Iowa Pacific would not say how many employees were affected by the seasonal layoff. 

In a phone interview Friday, Gregg gave a different account, saying all but 2 of about 40 employees were terminated and told the railroad would be closing.

Gregg said she sent the email to media notifying them of the closure because she wanted to make sure media contacts had information about whom to refer their questions. 

"I sent it so that before I walked out the door, the media would have some contact for us, because there’s no one else left here for you to call,” she said. “I knew no one on the railroad would be calling you back, and I wanted you to know who to call."

The railroad is a popular and historic draw for the city of Palestine.

Palestine's Tourism Marketing Manager Mary Raum, who said she also received Gregg's email on Friday morning said it is hard to estimate how much tourism revenue is generated in the city from visitors of the railroad. 

“A lot of the attractions or the additional layered-on events here in Palestine are fed when people are waiting to ride on the train…,” she said. “We have a lot of hotels in the area that rely on the ridership.”


The railroad has a historic past. Inmates held in the Texas prison system created the railroad in 1881 as a way to transport hardwood to fuel furnaces at the iron smelter at the Rusk Penitentiary.

The furnace, in turn, supplied the state of Texas with iron products, such as infrastructure for building the capital in Austin, the website states.

The rail line was later modified to join main line, and in 1906, inmates extended it to Maydelle and finally to Palestine in 1909, sparking increased commerce throughout the area.

The prison system eventually stopped using the furnace and by 1921, regular rail service was discontinued. The line was later leased to outside rail companies until it was conveyed in 1972 to the Texas Parks and Wildlife Department, which reopened it a few years later.

Along the way, a rare, vintage turntable – which allows engines to change directions – was installed in Maydelle and the railroad was again moved into private ownership.