Popular ETX railroad denied loan forgiveness - KLTV.com - Tyler, Longview, Jacksonville |ETX News

Popular ETX railroad denied loan forgiveness

An East Texas railroad owes the city of Palestine half a million dollars.  

At the Palestine City Council meeting Monday evening, the council denied American Heritage Railways' request to forgive the 500,000 dollar lone the city gave them in 2007. 

Instead, the city is giving American Heritage one year where they do not have to pay on the principal amount, which comes out to more than 100,000 dollars. 

The city also reduced the interest rate the company will have to pay from five percent to 2 percent. 

Mayor of Palestine Bob Herrington, told us that with the city's limited budget, forgiving the loan was not an option.

"We can't give away that five hundred thousand because that's forty million in sales to generate five hundred thousand for the city," Mayor Herrington explained. 

American Heritage Railways also received a 500,000 dollars loan from the city of Rusk and a one million dollar loan from the state. 

Copyright 2012 KLTV. All Rights Reserved. 

Powered by Frankly