Opponents to a proposed room tax increase in Jackson County are accusing county leaders of secretly earmarking the money for a grant to the Great Smoky Mountains Railroad.

“If this is about raising funds to get the railroad to move back to Dillsboro, then we are against it,” said Hanneke Ware, owner of the Chalet Inn, at a public hearing on the room tax increase this week. “It is not right to increase the accommodation taxes in a county as widespread as Jackson to provide marketing money to a private business.”

The scenic tourist railroad has asked the county for as much as half a million dollars in exchange for offering steam engine train service to the tourist village of Dillsboro.

The train, once headquartered in Dillsboro, cited the flagging economy when it pulled out in 2008. Dillsboro’s galleries, gift shops and restaurants were thrust into a tailspin over the sudden loss of 60,000 tourists annually.

While the train has since brought limited passenger train service back to Dillsboro, business owners worry the train won’t stick around and still pine for the same level of foot traffic they once enjoyed.

County Commissioner Mark Jones, who spoke to commissioners during the public hearing in his capacity as head of the Cashiers Area Travel and Tourism Authority, said if a tax increase is needed to help the train, perhaps Dillsboro should levy it. In Macon County, Jones pointed out, the county levies a 3 percent tax and the town of Franklin levies an additional 3 percent tax there.

County leaders say there is no connection between the proposed room tax increase and the financial assistance being sought by the railroad.

“We don’t have a motive,” said Commission Chairman Jack Debnam.

Anyone who thinks the room tax increase is aimed at raising money to give the railroad is misinformed, Debnam said. The county has bandied the idea around but is not close to a deal, Debnam said. (see related article)

Several speakers opposing the room tax hike believe there is a connection, however.

“Why are they asking the county for money?” Ware asked.

She said the railroad should do what other businesses do when expanding: namely, get a bank loan.

“Is it because they don’t have collateral?” Ware asked. “If they can’t get a loan, why would the county want to put money into a business whose financial plans are tenuous?”

Henry Hoche likewise questioned why the tourist railroad needs money from the county.

“To me it makes no sense why the railroad isn’t paying for it itself,” said Hoche, owner of Innisfree Inn By-the-Lake in Glenville.

Giving tax money to private business in exchange for creating jobs isn’t exactly a new concept. Incentives to land new industry are common at the state level, and counties often get in the game by offering tax credits to lure new companies offering jobs.

Jackson County has a revolving loan fund designed to help businesses moving to or expanding in Jackson County. Al Harper, the owner of the railroad, previously estimated 15 to 20 news jobs would be created under his plan to base a steam engine train in Dillsboro — a plan predicated on financial help, however.

County Manager Chuck Wooten said the Great Smoky Mountains Railroad steam engine project would not create enough jobs to qualify for the size of the revolving loan request, however.

It wouldn’t matter anyway, Wooten said, because the railroad has since told him it can’t take on any more debt.

Spin-off jobs created by other businesses, such as the tourist-oriented shops in Dillsboro, wouldn’t count toward the job creation quota the railroad must meet, Wooten said.

The scenic railroad wants to base trips on a restored 1913 steam engine and rail cars in Dillsboro, but there’s a hitch. The train is in Maine, and it would cost more than $400,000 to move it down to Dillsboro, the railroad estimates. It wants the county to split the cost, plus pony up money to help advertise the new steam engine service.

Currently, tourism tax dollars can only go to marketing and advertising, not to hard costs like steam trains. The narrow criteria were imposed by the state in the 1980s when counties first began charging lodging taxes.

A few years ago, the law changed. Room tax can now fund “tourism-related expenditures,” which can include walking trails, festival bleachers, boat docks, or perhaps a stream train — anything that would presumably lure tourists. The state allows up to one-third of a county’s room tax dollars to go toward such “tourism-related expenditures.”

If Jackson County wants this flexibility, however, it has to adopt new language at the local level reflecting that. It has become part of the discussion over whether to increase the room tax, along with revamping the tourism oversight agency that controls the money.

Clifford Meads, general manager of High Hampton Inn in Cashiers, doesn’t like the idea of tourism tax money going to projects instead of strictly promotions.

“There will be people dreaming up projects so they can spend the money,” Meads said.

Meads said shipping money from other parts of the county to help Dillsboro is “going to be divisive.”

No actual decision was made, but County Manager Chuck Wooten told commissioners this week that they have $95,176 set aside in the budget if they want to give the money, as requested, to the Great Smoky Mountains Railroad.

The money would go toward fixing up a steam engine the railroad bought that is currently sitting in Maine. In February, the privately owned business asked for $817,176 in the form of a loan and a grant from Jackson County. A few weeks later, the railroad amended that request to ask for $95,176 in cash and $322,000 in the form of a loan.

Now the loan part is gone, and the railroad just wants cold, hard cash from Jackson County.

That’s because if the railroad did get a loan from the county, it might well be forced to immediately pay back another federal loan because of an agreed upon debt-equity ratio, Wooten said.

Businessman Al Harper owns the railroad. Until 2008, Dillsboro served as the headquarters of the railway, an excursion railroad catering to tourists. About 60,000 people a year rode the train, and Dillsboro boomed — until the train moved its administrative office and main depot to Bryson City. Dillsboro languished in the wake of that decision. Last year, and even more this year, the railroad did begin limited, seasonal excursions out of Dillsboro again.

With the steam engine, Harper is promising to run service out of Dillsboro two to three days per week in June, July and August, and three to four days out of the week in October.

Additionally, the railroad promises during November and December for the popular Polar Express to originate out of the tourism-dependent town.

“If there is sufficient passenger demand then (the) number of days could be increased,” Wooten noted. “There will also be trips on the steam engine originating out of Bryson City with a stopover in Dillsboro.”

Swain County and the Swain County Travel and Tourism Authority each have already kicked in $25,000, for a total of $50,000, to the railroad.

A decision by commissioners in Jackson County won’t be made until the steam engine is physically located in Western North Carolina from Maine, Wooten said.

Depending on which town leader you ask, Dillsboro is prepared to co-sign on a more than $300,000 loan for the Great Smoky Mountains Railroad — or, short of that, the town is inclined to help the railroad in some significant, still-to-be-determined manner.

That loan amount is nearly double the town’s annual budget of $171,610.

“We’d sign if need be,” Dillsboro Alderman David Gates said flatly. “If they have adequate collateral, we said we would.”

Gates’ fellow board member, David Jones, was a bit more circumspect about the potentially controversial agreement: “We’re interested, and we certainly want the railroad here — we’ve agreed to listen to more details.”

The railroad is privately owned by businessman Al Harper, who has asked Jackson County commissioners for $95,176 in cash and $322,000 in the form of a loan to keep the tourist trains coming to Dillsboro on a regular basis. This is less than Harper originally sought. In early March, he asked for more than $800,000 from Jackson County in the form of grants and a loan, but later downsized the dollar request.

Swain County has contributed $25,000 to help the railway, and the Swain County Tourism Development Authority has kicked in another $25,000, said Bryson City Mayor Brad Walker.

“It’s an economic engine for Bryson City,” Walker said in explanation of the willingness in Swain County to fund a private, for-profit enterprise. “I call it our Harrah’s.”

That would be a reference to Harrah’s Cherokee Casino, the money machine for the neighboring Cherokee Indian Reservation.

The railway recently bought an old steam engine — which is currently in Maine — and wants to put it in service along with its diesel-powered engines. Harper said the money from the county would help make that vision a reality.

In return for the loan from the county, the train in exchange says it will run 110 to 120 days of service each year out of Dillsboro.  

Harper told commissioners the excursions would create 15 to 20 new jobs in Jackson County, and bring in least 20,000 visitors annually to the tourism-dependent town.

Dillsboro served as the headquarters of Great Smoky Mountains Railway, an excursion railroad catering to tourists. About 60,000 people a year rode the train, and Dillsboro boomed — until the train pulled out in 2008.

Last year the Great Smoky Mountains Railway began limited, seasonal trips out of Dillsboro again. The company said in January that Dillsboro was put back on the schedule because the scenic little town of about 220 residents is a drawing card for the business. Currently, the train is advertising excursions from Bryson City to Dillsboro five days a week during the summer and four days a week during fall, according to its online schedule.

Dillsboro leaders would like to cement more spots in the train’s schedule.

According to draft minutes of the April 11 Dillsboro town board meeting, Mayor Mike Fitzgerald told his fellow board members, “Jackson County commissioners would like the Dillsboro Board of Alderman to co-sign the loan, provided that the GSMR gives adequate collateral to cover such a loan. David Gates made motion that the board agrees to support the Jackson County commissioners, providing sufficient collateral is given by GSMR. The motion was seconded by Tim Parris, and passed with four ayes, one abstention.”

Interim County Manager Chuck Wooten said county commissioners have not taken any formal action to ask Dillsboro to co-sign at this point.

“However, informal discussions among the commissioners generated this concept as an idea,” he said. “I believe Chairman (Jack) Debnam asked Mayor Fitzgerald to poll his members to determine if this might be something they would consider. Based on their action, it appears they would endorse this action once they feel comfortable with the pledged collateral to secure the loan.”

The county hasn’t yet received a formal loan application from the railway, Wooten said, adding, however, “I suspect the commissioners will feel more at ease approving a loan if Dillsboro is willing to co-sign.”

Wooten has previously explained that the $95,176 grant would be used to restore and paint the steam locomotive and exterior of first-class coaches. Wooten said he intends to consider this grant in the upcoming fiscal-year county budget, which commissioners have final say over.

“We will discuss their grant request during upcoming budget discussions ...  I’m still hopeful I will have a budget document to submit to the commissioners on Monday, May 2,” he said.

The $322,000 revolving loan would pay for moving the newly purchased train from Maine to North Carolina. The county’s economic development arm manages the revolving loan fund. It would be up to county commissioners whether to approve the loan request.

Harper’s company, American Heritage Family Parks, owns two other tourist railroads in Colorado and Texas. Harper is one of the principle investors and owners of Ghost Town in the Sky amusement park in Maggie Valley, which has been in bankruptcy for two years. Harper has made an effort to buy the park out of bankruptcy, but has been unable to secure financing. Harper at one point had lined up a loan using the railroad as collateral, but the deal fell through. A new deal is pending, which involved transferring 49-percent ownership in the railroad to a newly created corporation for the purpose of piecing together a Ghost Town rescue.

Bringing regular train service back to Dillsboro greatly depends on whether Jackson County commissioners come up with dollars to help restore a steam engine and bring it here from Maine, Kim Albritton, vice president and general manager of Great Smoky Mountains Railway, said this week.

The railway has reduced the amount of money it’s seeking from Jackson County taxpayers from more than $800,000 down to $95,176 in cash and $322,000 in the form of a loan.

Albritton stopped short this week of flatly calling a thumb’s down from the county a deal breaker, instead characterizing such a commission vote as making “it more difficult” for the company to proceed.

The railway recently bought an old steam engine — which is currently in Maine — and wants to put it in service along with its diesel-powered engines.

If the county will help with that goal, the train in exchange will run 110 to 120 days of service each year out of Dillsboro. This, railway owner Al Harper has said, would create 15 to 20 new jobs in Jackson County, and bring in least 20,000 visitors annually to the tourism-dependent town.

Until 2008, Dillsboro served as the headquarters of Great Smoky Mountains Railway, an excursion railroad catering to tourists. About 60,000 people a year rode the train, and Dillsboro boomed — until the train pulled out. It moved its headquarters and main depot to Bryson City and quit running excursions to Dillsboro, which languished as result.

More business in the form of train-riding tourists returned last year when the Great Smoky Mountains Railway began limited, seasonal trips out of Dillsboro again.

Interim County Manager Chuck Wooten, who received the new funding request from Great Smoky Mountains Railway in late March, said the $95,176 grant would be used to restore and paint the steam locomotive and exterior of first-class coaches. Wooten said he intends to consider this grant in the upcoming fiscal-year county budget, which commissioners have final say over.

The $322,000 revolving loan would pay for moving the newly purchased train from Maine to North Carolina. The county’s economic development arm manages the revolving loan fund. It would be up to county commissioners whether to approve the loan request. Wooten said he doubted this would take place until sometime later this month.

Private land in Dillsboro might spare the historic Monteith House site from becoming home to a turntable for the Great Smoky Mountains Railroad, part of a plan to return regular train service to this tourism-dependent town.

Kim Albritton, the railway’s vice president and general manager, confirmed railroad representatives will talk with private landowners about the possibility of using their land for a turntable instead of Monteith Park as originally proposed. That has not taken place yet, she said.

Without a turntable, engines must travel in reverse, pushing the train’s cars instead of pulling them, when making the return trip back to Bryson City after an excursion to Dillsboro.

Previous discussions had involved putting the turntable in front of the barn near the Monteith House. The old farmstead house faces the proposed turntable site just a few hundred yards away. It would change — if not stop — plans to renovate and turn the house into an Appalachian Women’s Museum. The museum would honor and recognize the contributions of Appalachian women to this region.

Dillsboro Mayor Mike Fitzgerald emphasized that town leaders had considered using the town-owned, historic Monteith Park as “a last resort” only.

That falls in line with stipulations from the state, which in 2004 gave Dillsboro $250,000 to help fund the park. State rules mandate the town must “explain in detail which sites have been evaluated and where they are located and why Monteith Park is the only alternative” for a train turntable, according to an email dated Feb. 24 received by the town from LuAnn Bryan, a consultant for the N.C. Division of Parks and Recreation.

If the requirement to use “all practical alternatives” is met and no other site is viable, the town does have the state’s OK to let the train use Monteith Community Park, according to the email.

The turntable would then be built on about three-quarters of an acre. In return, the town would offer up two acres, known as the Vanderwoude property, for recreational development, according to town documents. The town would be required to replace the lost parkland.

Dillsboro resident Emma Wertenberger, who is heading up efforts to turn Monteith House into a museum, said she and other committee members haven’t given up on the idea.

“We still hope to have a home at the Monteith homestead,” she said.

Great Smoky Mountains Railway this week promised to return to Dillsboro in a big way, on this condition: Jackson County must come up with $817,176.

“We need to explore how we can work together and get that train here, and market it together,” railroad owner Alan Harper told county commissioners.

Taxpayers’ dollars would:

• Pay for moving a train set from Maine ($322,000 in the form of a grant).

• Restore and paint the locomotive and exterior coaches ($95,176, also a grant).

• Install a turntable in Dillsboro’s Monteith Park ($250,000 in the form of a loan).

• $150,000 in annual tourism advertising funds (in the form of a matching grant).

Until 2008, Dillsboro served as the headquarters of Great Smoky Mountains Railway, an excursion railroad catering to tourists. About 60,000 people a year rode the train, and Dillsboro boomed — until the train moved its administrative office and main depot to Bryson City. Dillsboro languished in the wake of that decision. Last year, and even more this year, Great Smoky Mountains Railway did begin limited, seasonal excursions out of Dillsboro again.

Now this news — 110 to 120 days of train service each year, 15 to 20 new jobs created in Jackson County, low estimates of at least 20,000 visitors to the tourism-dependent town, and the possibility of turning Monteith Park into a train destination in its own right, too. Harper said he has a steam engine that doesn’t work, and he’d be willing to possibly park it at Monteith. And, another sweetener — an unused metal bridge the town could use to span the creek in Monteith Park. All that for just more than $800,000, Harper said.

County commissioners clearly were not surprised by the request or presentation (the details were included in a pre-assembled packet for commissioners and reporters. Plus, Harper said he’d been discussing the deal with Dillsboro town leaders “individually,” and the possibility of a turntable had been bubbling about the town of just more than 200 residents for the past few weeks).

A turntable would do just what it says — serve as a means of turning the train around. Town leaders, Harper said, have indicated they believe Monteith Park would work for that purpose.

The train excursions would, he said, be first class using a steam engine. Commissioner Charles Elders asked when they would start if this deal is struck, and Harper said possibly by mid-summer. Commissioners took no action, with Chairman Jack Debnam telling Harper the county looks forward to working with the railroad.

In many ways, Brian Hockman and wife Carrie of Claymates, a “paint your own pottery experience,” serve as the perfect business portrait of the new Dillsboro.

This is Dillsboro post the Great Smoky Mountains Railroad. A Dillsboro that maybe hasn’t exactly risen from the ashes like some resurrected phoenix, but a town that has, nonetheless, persevered and survived.

Claymates is located in the downtown section on Front Street: within a hop, skip and a jump of the railroad tracks that run through the town. The train once served as a major business conduit, disgorging crowds of tourists — about 60,000 a year — into the waiting arms of merchants.

Brian and Carrie Hockman came to Dillsboro a short time after the tourist train pulled out in 2008. In the midst of the recession, the train consolidated business operations to its new headquarters in nearby Bryson City and canceled passenger service to Dillsboro. The train moved just one county away, but the shift might as well have been to the moon as far as Dillsboro merchants were concerned.

People lost jobs — 22 full-time railroad employees and a handful of part-time workers were stranded. Stores lost money. Businesses went elsewhere.

So why did Brian and Carrie Hockman settle on the economically (and for merchants, emotionally) depressed Dillsboro during such a bleak period?

The rent was low in those just post-train days, and Pennsylvania native Brian Hockman was eager to start a business showcasing his photography. As a sideline, his wife started Claymates, a pick-out-a-cute-porcelain-figure-and-paint-it-yourself business — and the sideline became the mainline as the couple built a successful store. Brian and Carrie Hockman don’t depend heavily on tourists and walk-ins. Claymates instead relies more on events such as birthday parties, girls-nights out and office parties.

So recent news that the Great Smoky Mountains Railway has once again expanded seasonal excursions into Dillsboro doesn’t matter that much to Brian Hockman. Truth be told, he really just hopes his rent won’t increase as a result.

Other business owners in this small Jackson County town are more excited than that. But they, too, remain cautious — any help during these hard economic times is, of course, welcome news. Just be clear on this: Dillsboro won’t ever put all of its eggs back in that one basket again.

Here’s the deal

Great Smoky Mountains Railroad started four-hour roundtrip excursions from Bryson City to Dillsboro in January, and plans to continue them through this month. Tourists riding the train have an hour-and-a-half layover to wander the town.

On occasion, that layover means an extra customer or two for Jill Cooper at Haircuts by Jill on Front Street. Men who decide they need a trimming and a place to sit while their wives shop, she said, or men ordered in by their wives who want to visit other stores without them hovering nearby. Additionally, some of the train’s employees get their hair cut while in Dillsboro.

But even though the direct business benefit might be of marginal importance for Haircuts by Jill, Cooper is very happy the train is back — no matter for how briefly, or for such a short layover.

“It’s exciting,” she said.

The train has brought back a certain liveliness missing since it left, said Cooper, who lives — as well as works — in Dillsboro.

Limited runs by Great Smoky Mountains Railroad started back up in 2010, with the train bringing tourists in June, July, August and October. Peak season summer and fall runs were a good sign, but trips in the winter are an even better indication that Dillsboro might again secure a place in the train’s long-range regional vision.

“It is a bigger deal because we are coming in the winter,” agreed Sarah Conley, marketing manager for Great Smoky Mountains Railroad.

It turns out Dillsboro’s character was popular with train riders, and that had a lot to do with the train’s decision to restore passenger service to the town.

“Dillsboro is such a quaint little lively town, and it has a lot of strongholds. It is an added bonus for riders to have a destination. When they get off they say, ‘Oh this is neat. It is a little quaint historic town,’” Conley said.

Additionally, the 32-mile roundtrip from Bryson City to Dillsboro has sights that interest most riders, Conley said. There is the 836-foot Cowee Tunnel to pass through, The Fugitive movie site to eyeball, and the scenic Tuckasegee River to enjoy.   

“Another thing that is really neat on the way to Dillsboro is they go by the train shop where our engineers work on the trains,” Conley said.

While the recession is still taking its toll on tourism, Conley said ridership was up last year compared to 2009.

Many of the passengers on these winter excursions are day-trippers, the marketing manager said. People who have visited Harrah’s Cherokee Casino and are looking for more things to do. Tourists who come over the Smokies by way of Gatlinburg and Pigeon Forge, Tenn., for an opportunity to ride the train, and North Carolina residents who are in search of something to do on the weekend.

In early January, new customers came into Twin Oaks Gallery and told owner Susan Leveille they had learned about her shop after visiting Dillsboro via a ride on the train.

“That was more than I had heard in a long time,” Leveille said of the train-Dillsboro connection.

Twin Oaks Gallery, which features works in pottery, glass, iron and such by local artisans and craftspeople, isn’t in direct sight of the train tracks. That means Leveille can’t be sure exactly how much business Great Smoky Mountains Railroad funnels into her store — she must rely on customers to tip her off.

“In concept, though, I think it is a great thing they are making trips here and connecting with Dillsboro again,” the longtime business owner said. “It can’t be anything but good for us.”

Staff writer Becky Johnson contributed to this report.

Steam engines are coming back to Western North Carolina, thanks to the Great Smoky Mountains Railroad.

The railroad announced that in coordination with Rail Events Inc., it has closed on the purchase of a steam locomotive — #1149 — and a Bud Rail Diesel Car — RDC-1. Additionally, the railroad has obtained nine passenger coaches from the Belfast and Moosehead Lake Railroad Preservation Society in Unity, Maine.

The locomotive and coaches have been winterized and will remain in storage for the winter. They will come to Bryson City, where the railroad is headquartered, in late spring 2011. Minor repairs are needed — two boilers will be renewed, which means disassembly of the smoke box and reinstalling a throttle.

Locomotive #149 is a Swedish locomotive built in 1913 and exported to the U.S. in 1994. It is a coal-burning locomotive with a 4-6-0 wheel configuration and a 5,000-gallon coal tender. The locomotive was rebuilt and re-tubed in 1998 under Federal Railroad Administration standards. The locomotive and passenger coaches have a Swiss coupling system and will operate together as a train set.

The RDC “Budd car” is capable of seating up to 84 passengers and is equipped with controls on each end. It has two 275hp diesel engines and has #6 airbrakes with D-22 brake valves. The RDC may be coupled with additional passenger coaches.

“Having been with the Great Smoky Mountains Railroad for the past 23 years, I have seen the operation grow and expand the passenger rail-tourism industry with our successful special events,” Kim Albritton, vice president and general manager, said in a prepared news release. “I, along with my staff at GSMR, are exploding with excitement and the many opportunities that restored steam service will provide, not only to the railroad but to the region of Western North Carolina.”

When Terry Stephenson bought a piece of hillside property on Lower Alarka Road in Bryson City, he expected it to slowly develop into a homestead for himself and his 11-year-old daughter. What he didn’t expect was the headache that the undeveloped hillside has become since he became embroiled in an argument with Bryson City’s Great Smoky Mountains Railway over his right to cross their tracks.

The railroad has 10 acres of Stephenson’s property that encompasses their tracks and the accompanying 100-foot right-of-way granted to railroad tracks, originally intended to allow freight and passenger rail companies space in which to store extra equipment. Stephenson said he would be unconcerned with the tracks if they didn’t cross the single dirt road that is the only entrance to his property.

The crossing that once existed there was excavated and replaced by the railroad, who then offered Stephenson a private right of way agreement that reinstated his right to use the crossing. But Stephenson only got a few words into the 14-point agreement before realizing that he would be coming out bearing the brunt of the burdens if he signed.

“There’s nothing in there for me at all,” said Stephenson. “It might as well have been printed on toilet paper.”

His chief grief with the company is the $3,000-a-year crossing insurance that the agreement stipulates, something he maintains has not been required of anyone else who has been granted a crossing.

“There’s a lot of people who don’t have crossing insurance,” Stephenson said, “and they want me to maintain a $2 million policy and make them the beneficiary.”

The agreement would also stipulate that the crossing is non-transferrable, so when he property passes to his daughter or the next owner, they wouldn’t have the right to use the crossing without entering into a separate, new agreement with the railway.

Stephenson said he has no intention of signing the agreement, but he also knows that the cost of taking the railroad to court over the issue might be cost prohibitive.

“You’re fighting everybody fighting the railroad,” said Stephenson, “but it’s like paying a toll to get to my property, and every month I’ve got a payment to make, whether I can get to it or not.”

When asked for their take on the dispute, Great Smoky Mountains Railway General Manager Kim Albritton responded only that she was “not interested in discussing it with you.” Subsequent calls and e-mails to the railroad’s management were unreturned.

When Stephenson got nowhere in his negotiations alone, he tried bringing the issue before the Swain County Commissioners, who pledged that they would attempt to mediate the situation.

But, said County Manager Kevin King, the county was similarly stonewalled.

“We basically called the train and wanted to discuss that issue with them and they indicated that this is a legal dispute and at this point they would not sit down and talk to the board,” said King. “We asked for a meeting, they declined, and that’s all we can do.”

But even if he tries to fight the railroad, Stephenson will likely have a long and difficult road ahead of him, and there is a chance that the law might not be on his side.

“North Carolina case law generally grants railroads broad discretion to regulate the use of their rights of way by others,” wrote Raleigh attorney Jeffrey Bandini in an explanation of railroad real estate laws called Railroad Property. “This control is justified to ensure safe travel on the rights of way and to protect the physical integrity of the facilities built on the rights of way and the land upon which the facilities are located. Accordingly, whether a railroad company owns its right of way in fee simple or easement, third parties must obtain permission from the railroad company to enter the right of way for any purpose.”

Plainly speaking, that means that Stephenson will have a hard time countering the agreement, since the state has long given railroads a great deal of license in how to use their own rights of way.

Stephenson, however, isn’t averse to a crossing agreement, but feels that what the railway is putting forward is beyond unreasonable.

He said he’d be happy to pay his part for the upkeep of the crossing, but thinks that $3,000 a year is slightly exorbitant, given that his taxes are barely $800.

“I’m not trying to be hard,” Stephenson said, “I just need to get to my property. “

The town of Dillsboro, once a thriving retail market for tourists, has taken a beating in the past two years. First, the Great Smoky Mountain Railroad, a business that delivered 60,000 visitors per year to the downtown, moved its operations to Bryson City and cut train routes to the quaint shopping hamlet. Meanwhile, the recession hit the mountains full force.

“What Dillsboro experienced is the perfect storm,” said Dr. Betty Farmer, communications professor at Western Carolina University. “That railroad left and the economy tanked, and the timing really could not have been worse for them.”

Farmer is one of a cadre of WCU professors working with the town and its business community to redefine its marketing strategy and enliven its retail district.

Mayor Mike Fitzgerald said the partnership could help the town develop a new identity, something that’s not tied to the success or failure of one business.

“I think that identity — with or without the train –– is what we’re working on right now,” Fitzgerald said. “We’re at a crossroads.”

Life without the railroad

For two decades the Great Smoky Mountain Railroad drew visitors to Dillsboro’s Front Street and created foot traffic for a downtown retail district that emphasized local crafts.

In 2008, the train line pulled out for economic reasons, leaving 22 full-time employees jobless and the town without a major tourist draw.

Walt Cook, owner of the Smoky Mountain Dog Bakery, opened his business just six weeks before the train left. When the train stopped coming, so did his walk-in customers.

“My particular type of business relies on a certain amount of walk-around traffic, and Dillsboro doesn’t have enough of that since the train left,” Cook said.

The Great Smoky Mountain Railroad resumed limited service to Dillsboro from Bryson City last year, and this year they’ve expanded service further. But businesses downtown can no longer rely on sheer volume of tourists to turn a profit.

Cook has decided to move his retail business to Waynesville because he doesn’t think Dillsboro has enough to draw tourists.

On a sunny Wednesday afternoon last week, Douglas Siegrist, 33, of York, Penn., sat out front of Bradley’s General Store with his son, Tanner, eating ice cream cones. They had come on the one o’clock train from Bryson City, where their relatives run a campground.

Siegrist said he didn’t think they would have visited Dillsboro without the attraction of the train.

“Probably not,” he said. “We really haven’t heard much about Dillsboro.”

But having discovered the town, Siegrist said he would like to come back.

“It’s a nice little town, and it seems like there’s a lot going on,” Siegrist said.

Frank and Diane Lauterman of Clermont, Fla., arrived on the same train. The Lautermans were also staying in Bryson City, and Frank said that while the railroad lured them to Dillsboro, the town had its own selling points.

“I would move here,” Frank said. “This is the area I’d like to retire.”

Those reactions point at something most Dillsboro business owners can agree on. The town’s attraction is about more than the train.

“This town was a thriving tourist town even before the train was here,” said John Miele, owner of the Golden Carp, a home furnishings store that draws visitors from all over the region.

Miele said train customers were never a mainstay for his business, but he appreciated the energy they brought to the retail district. He thinks the struggles retailers are facing now have more to do with the state of the economy than anything else.

“The train leaving has nothing to do with what’s going on right now,” Miele said. “That we have any business at all is a miracle.”

Jean Hartbarger, owner of The Jarrett House and former mayor of Dillsboro, summed up the situation succinctly.

“The train didn’t kill Dillsboro,” Hartbarger said. “The economy did.”

The partnership

Last year, at the instigation of Western Carolina University Chancellor John Bardo, WCU began a multi-departmental partnership with Dillsboro and its downtown merchant community.

Bardo, whose academic background is in urban planning and community development, said the partnership fits the university’s mission of community engagement, but it’s also an effort to lend a hand to a neighbor.

“It became clear that, with the train not coming on a regular basis, people in Dillsboro were suffering,” Bardo said.

Bardo said the goal for the university is to offer its resources to small business owners who want help.

“A university can never tell the people of a community or region what to do,” Bardo said. “We’re trying to give the people of Dillsboro some help, so they can re-shape their course the way they want to.”

Dr. Betty Farmer, a WCU professor in communication and public relations, has taken the lead in coordinating the partnership. She said the first six months have been to a large extent about building trust and identifying issues.

Now that a working relationship has been established between the university and business community, the challenges have gotten more concrete.

“I feel like we have a firm grasp on what the problems are now,” Farmer said. “But the business people needed help yesterday, and it’s almost impossible for us to move as fast as they need us to.”

Farmer said one business owner confided to her that gross receipts had fallen from $130,000 per year to $30,000 during a three-year period.

In January, Farmer facilitated a large group meeting to discuss the action plan for the revitalization campaign. The result was an eight-step strategy that involves creating a coherent brand identity for the town, increasing the number of WCU faculty and staff who use the downtown district, and updating the town’s presence on the Internet.

So far, half of the downtown businesses have worked with WCU’s Small Business and Technology Development Center to develop better business planning, marketing and finance strategies. Also, economics professor Steve Ha has conducted surveys of the business community, WCU’s faculty and staff, and visitors to help figure out what the town needs to do to reach potential customers.

The faculty and staff survey, which was offered on-line, yielded more than 600 responses.

Miele has participated in the partnership, and he’s pleased with its results so far.

“It’s like anything. Sometimes you can’t see your mistakes until someone comes in from the outside and points them out to you,” he said.

As a result of his work with WCU faculty and students, Miele has developed a Facebook page that’s linked to his business home page, and he’s already found that it’s helped walk-in traffic.

“Just when I was going to 86 the whole thing, I started hearing from customers saying, ‘We saw your website,” Miele said. “Now it’s my catalogue.”

Farmer is confident that the business owners can learn from the partnership.

“I think there are some things Dillsboro businesses can do and they’re open to it,” Farmer said.

But she’s realistic about what the university can do for the town.

“We don’t have $500,000 to run a slick ad campaign,” Farmer said. “So we have to use other ways to increase the number of visitors.”

Playing to strengths

While the challenges facing all small tourist towns are great, Dillsboro has some natural advantages. Its location at the junction of U.S. 23/74 and U.S. 441 makes it extremely accessible. The town has public access points on Scott’s Creek and one on the Tuckasegee River.

Tyler Davis recently opened Blue Ridge Outing Company, a rafting business, in part of the old train depot. Davis has owned an outfitter business in Bill’s Flea Market on the Smoky Mountain Expressway for the past five years, but he jumped at the chance to open a location in Dillsboro.

“Nothing against the flea market. I love the flea market,” Davis said. “But for a business like this, it’s a much more appropriate location.”

Davis like the fact that his customers have access to public restrooms and a shopping district, and they only have to walk 150 yards to the boat launch to start their trips.

What’s still missing, he said, is a major draw.

“It has the buildings. It has the shops. It’s the amount of attractions. That’s what the town still needs,” Davis said. “The place has such a cool image as a mountain town.”

Carrie Blaskowski, a Dillsboro resident and assistant director of the Jackson County Green Energy Park, believes the partnership with WCU has helped the business community get a grip on what it needs to do.

“We can become complacent and rely on what we know or we can start over and collaborate on building the future together,” Blaskowski said.

The Green Energy Park has become a destination for travelers interested in sustainable business practices, in large part because it uses landfill methane to power a crafts studio for glass blowers and blacksmiths.

Blaskowski sees crafts as a lasting part of the town’s identity, but she thinks the future of the town relies on diversity.

“Dillsboro may be going back to its roots with some of the efforts in the crafts community but we’re also trying a lot of other things,” Blaskowski said.

For Farmer, Dillsboro has one asset money can’t buy. Location, location, location.

“It’s in the middle of so many great things,” Farmer said.

Mayor Mike Fitzgerald is quick to point out that while Dillsboro’s retail businesses are struggling, the town is thriving as a residential community. He believes the town just needs to develop ways to build on its assets.

“It’s a historic crafts community, and it’s a quaint mountain town,” said Fitzgerald. “Unfortunately with the economy down, the crafting side of things isn’t bringing in the same revenue it used to.”

Over the hill in Cullowhee, Bardo has committed his university to the partnership for the long haul.

“It has to be a long-term relationship,” Bardo said. “What we’re seeing in the mountains is the local effect of what is a global economic downturn. It can’t be turned around quickly.”