A5 mhrr depot.JPG

Historic Hood River train depot, headquarters of financially-troubled Mt. Hood Railroad.

Hood River County is preparing to move forward with seizure of Mt. Hood Railroad property for failing to pay property taxes for the last three years.

In total, Mt. Hood Railroad owes $210,135, which includes interest and fees associated with late payment.  

Hood River County is not prepared to disclose when the property will be seized, said County Finance Director Tina Ruffin, but full payment of the amount due would prevent the seizure.

Because Oregon law classifies railroads as a utility, MHRR  is annually assessed by the Oregon Department of Revenue, rather than the county assessor’s office. The Department of Revenue also collects the tax and appropriates a portion of the collected funds to the county. In the case of delinquency, however, the county where the taxes are due — in this case, Hood River County — is responsible for taking action on behalf of the state.

“We are working to satisfy the county’s claim,” said Ed Ellis, president of Iowa Pacific Holdings.

Mt. Hood Railroad has been owned by Permian Basin Railways, a subsidiary of Iowa Pacific Holdings, since 2008. It had previously been owned by a group of 20 local investors who had bought the railroad from Union Pacific back in 1987 and, looking to retire, put the railroad and its properties up for sale in 2007, according to Hood River News archives.

Permian’s operations were partially dependent on a loan from the Federal Highway Administration, Ellis said, which was partially pulled in 2011 and completely pulled in 2013.

“Once it was pulled, we had to take out a different loan,” Ellis said, adding that the shift cost the company a total of $28.5 million, “and it got to the point where it built up.”

Mt. Hood Railroad is delinquent on its tax accounts for the years 2016, 2017 and 2018, according to the Hood River County Department of Budget and Finance.  

Ellis said that part of the railroad’s current financial difficulties are due to not receiving payment from those using their property — specifically referencing Wildwood Academy, which opened a year ago.

“If people like Wildwood would pay (for use of railroad property), it would make it easier for us to settle things like this,” he said.

The railroad is currently involved in a civil dispute with Wildwood Academy over use of the railroad’s parking lot, and Wildwood Academy has filed a lawsuit against the railroad for violation of an easement agreement between the two businesses.

The lawsuit is currently on pause as Mt. Hood Railroad and Wildwood Academy attempt to negotiate a parking deal.

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