EDC Finance helped Strasburg Rail Road get the 15-year low-interest loan from the Pennsylvania Industrial Development Authority (PIDA).

Strasburg Rail Road’s mechanical shop is hardly its best-known business.
The topper by far is carrying  thousands of tourists in historic passenger cars pulled by steam locomotives through the scenic countryside.
But the shop is highly popular in its own way.

It’s not a hit with tourists, but with other railroads, because of its rare skill in repairing, restoring and reproducing historic passenger cars and steam locomotives.

To help meet that strong demand, the Strasburg Rail Road is launching a $1.75 million expansion of the shop.

The project got a lift Wednesday from the Pennsylvania Industrial Development Authority, which approved a low-interest loan of $765,000 for the venture.

“We have turned down some jobs, simply because we could not meet their deadlines. We have to think of our customers whose work we already have,” said Linn Moedinger.

Moedinger, Strasburg Rail Road’s president and chief mechanical officer, said the project will add 12,000 square feet to the shop, which now measures 18,000 square feet.

Construction is expected to start in September, subject to Strasburg Township’s approving of a land development plan for the project. Completion is expected early next year.

Strasburg Rail Road hopes to add six full-time employees to the shop’s 24-employee workforce.

Some 80 percent of the shop’s work is done on Strasburg Rail Road equipment and the balance on cars and locomotives belonging to other railroads, according to Moedinger.

The bigger facility is intended to enable the shop to handle more “contract” work for other railroads and bring that ratio to 50-50.

Constructing more shop space is an essential step for reaching that goal, because of the large size of the passenger cars and locomotives.

“It’s not like working on pocket watches,” said Moedinger.

Helping Strasburg Rail Road get the state loan was EDC Finance, a Lancaster-based nonprofit that helps businesses obtain state and federal funds.

Randy Johnston, EDC Finance loan officer, said the 15-year loan carries a below market, fixed interest rate of 2.25 percent for the initial seven years.

Strasburg Rail Road’s financial health is helped by having revenue from separate businesses, he said. Besides the tourist business and the mechanical shop, Strasburg Rail Road also handles freight for area firms.

“Any good business benefits from having multiple revenue streams that are unrelated,” Johnston said.

As Johnston pointed out, Strasburg Rail Road is an iconic Lancaster County business and one of its leading tourist destinations.

Some 300,000 tourists visit a year, many drawn by its events featuring Thomas the Tank Engine, Santa Trains and Steampunk unLimited.

Chartered in 1832, Strasburg Rail Road is the nation’s oldest short-line railroad.

Removed from the waves of tourists, the mechanical shop is bustling these days too, with “tons” of contract work, said Moedinger.

But he’s at a loss to explain it.

“We’ve never been able to figure out why the phone stops ringing or why the phone starts ringing. There’s no rhyme or reason to it. It didn’t follow the downturn in 2008. In fact, we had an increase,” he said.

But being able to serve every railroad that calls is another matter. Besides limited space, limited staff is as big or a bigger worry, according to Moedinger.

“We have very high standards,” he said, explaining that shop employees need to be creative, dedicated and hardworking people “who can think on their feet.”

Because its work is so specialized, the shop — known as a “back shop” in railroad parlance — advertises for welders, mechanics and machinists, then trains them.

“If you place an ad for a steam locomotive boilermaker, you probably won’t get a lot of responses,” said Moedinger.

Read the full article from LNP here.