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Omnitrax plans to purchase the historic San Luis and Rio Grande Railroad out of bankruptcy. The deal includes the rail yard in Alamosa, seen at the bottom of this aerial view of the city. (Omnitrax)

Denver-based Omnitrax — a transportation logistics company with 26 railroads in 12 states — is under contract to purchase the San Luis & Rio Grande Railroad following a bankruptcy auction, sparking hope for an economic lift from the historic railway

The San Luis & Rio Grande will be Omnitrax’s 26th rail operation, giving the company more than 2,000 miles of railroad across the U.S. and doubling its Colorado footprint. (The company owns the 300-acre Access 25 industrial park in Mead and the 700-acre rail-served Great Western Industrial Park in Windsor.)

The San Luis Rio & Grande Railroad was built in 1870 as a 155-mile short-line over 9,200-foot La Veta Pass. The railroad connects to Union Pacific rail lines in Walsenburg, serving as a link between the Eastern Plains and the San Luis Valley. The railroad’s trains carried barley for Coors Brewery and other agricultural, mineral and industrial commodities coming from a dozen different customers in the valley.

The railroad also offered passenger trips over the pass, with vintage cars connecting with the Cumbres & Toltec Scenic Railroad

Railroad promoters say that without rail cars hauling goods between the San Luis Valley and the Eastern Plains, there would be as many as 24,000 more trucks a year on U.S. 160 over La Veta Pass.

“The SLRG removes tens of thousands of trucks from Colorado’s highways and the Sangre de Cristo Mountain range’s scenic La Veta pass,” Omnitrax CEO Dean Piacente said in a statement. “Rail continues to be the most eco-friendly freight solution over land and that’s especially important to such a vibrant part of our state.”

San Luis & Rio Grande owner Iowa Pacific Holdings, which purchased the route in 2005, began crumbling in 2020 and filed for bankruptcy in 2021. The cloudy future of the railroad has worried economic development champions in the San Luis Valley.

Omnitrax is planning to haul just freight at first. The company’s first task will be to assess demand and operations, Piacente said in an email. “Based on that assessment, we will use each viable mile of track to serve existing and new customers along the line. Our top priority is safe and reliable freight service.”

The bankruptcy sale drew several bidders, all railroad companies, bankruptcy trustee William Brandt said. The minimum bid for the late July auction was $5.75 million. The sale included all the assets of San Luis & Rio Grande Railroad, including tracks and a rail yard in Alamosa. 

Omnitrax did not disclose how much it paid for the railroad.

Jason Blevins lives in Eagle with his wife, two teenage girls and a dog named Gravy. He writes The Outsider, a weekly newsletter covering the outdoors industry from the inside out. Topic expertise: Western Slope, public lands, outdoors,...