Rail depot seen as a ‘game-changer’

By Pat Caldwell

The Enterprise

VALE — The money is there, at least for now, and but no blueprint exists to build a new rail shipping center in Malheur County.

Last week the county received a huge economic boost when the Oregon Legislature approved $26 million for the local facility.

The shipping depot would form special trains loaded with area produce trucked in. The trains would then head east, cutting time and costs for the local agriculture industry. The depot also would create new local jobs.

“It is pretty unbelievable. It will impact not only Malheur County but all of the surrounding counties and in Idaho,” said Kit Kamo, director of the Snake River Economic Development Alliance.

Paul Skeen, Malheur County Onion Growers Association president, agreed.

“This is huge. I can’t state it loud enough,” he said.

The shipping depot is a game-changer for the local onion industry, he said, because it slashes the shipping time.

“The way it used to be, if you got a rail car to the east coast in two weeks that was good time. This is going to be a matter of days,” said Skeen.

The key question now is: Where do we go from here?
At least one piece of the answer may depend on voters.

That’s because even though the Legislature passed a $5.3 billion transportation package – which furnishes the $26 million for the trans load facility – the proposal could be referred to voters some time in the next six months.

“If it is referred, then there would be no certainty of funding until people vote,” said state Rep. Cliff Bentz, an Ontario Republican. He said that seems unlikely.

A shipping depot for Malheur County is not a new concept. Bentz said talk about such a facility began a decade ago.

“In the last five years the conversations have become more focused as I kept looking for the best way to help businesses we already had,” Bentz said. “It became apparent that having an inland port here would be hugely beneficial to local growers and packers.”

Bentz said the $26 million price tag for the facility came out of discussion between him and Greg Smith, Malheur County economic development director.

“It was about how much would one of these things cost. It was his original thought, just a rough estimate, it would cost about $25 or $26 million,” said Bentz.

Smith’s thinking at the time, said Bentz, was to find $10 million and then fund the rest with loans or grants. Bentz said he didn’t like that idea.

“We are not going to go into one of these things with a bunch of debt,” said Bentz.

So Bentz looked for a way to fund the project and found it with the state’s new transportation plan.

Bentz said there is no time to lose preparing to build the facility.

“We should begin immediately to discuss how this money should be invested and how this trans load facility should be built,” said Bentz.

That procedure, he said, likely will include research into operations of similar facilities in Morrow and Umatilla counties and Washington state.

“We must go through the process and figure out how to organize the facility. Other counties have port districts that would be, obviously, the entities to manage this type of opportunity,” said Bentz.

But Malheur County doesn’t have a port district and that means officials must go a different route said Bentz.

“The normal structure when you don’t have a port district is to put together a non-profit corporation with a board of directors,” said Bentz.

Bentz said the Malheur County Court will oversee the initial pieces of the project and can use several different methods.

One of the best ways, said Bentz, will be for the court to create a non-profit, appointing a board of five to seven people. The court would receive the $26 million and then pass it on to the corporation.

The corporation would then work closely with Business Oregon – the state’s economic development agency – and Smith on the project.

The nonprofit then would lease to a private company, likely Union Pacific Railroad.

Malheur County Judge Dan Joyce said last week it was too early to know specific details of the project.

A look at a similar facility in Wallula, Wash., gives some idea of what could happen in Malheur County.

Shipment of products – from onions to apples to cherries – happens three times a week at the Wallua trans load facility, according to operations manager Scott Garrett.

The facility Garrett manages stands at 250,000 square feet. A rail line loops the facility and slices through the center of the main processing center. Under the roof of the processing center, rail cars – depending upon the season – are loaded with produce.

Garrett said the facility, owned by Union Pacific Railroad, employs around 50 people.

“At our peak, we have about 100,” said Garrett.

Union Pacific acquired the Wallula facility – along with cold storage distribution centers in California and New York – late last year from refrigerated rail service firm RailEx.

Garrett confirmed the Wallula facility does cut shipping time for area agriculturists.

“And it is much, much cheaper on rail than on a truck. We can fit almost four truckloads of produce into one rail car,” said Garrett.

At Wallula, Garrett said getting his facility off the ground was much like beginning any new business.

“You have to get proper permits, complete work on the rail, figure out who will maintain the roads, get water, gas and sewer,” said Garrett.

The preliminary construction work, said Garrett, also helps the local economy.

“All of that brings jobs,” he said.

A key player in the Malheur County facility, obviously, will be Union Pacific and the large railroad company already confirmed it is ready to help.

In a letter last month to Smith, Union Pacific said it is “willing to be part of a discussion moving forward,” regarding the facility.

The letter listed Nyssa as the site for the facility, but county officials say no location has been picked. Nyssa already had significant rail access.

The railroad wrote to Smith that other than an early discussion, the company hadn’t participated in talks about the Malheur County project.

“Union Pacific was not involved in estimating potential project costs to support the $26 million-dollar amount,” the railroad wrote. “We are not able to confirm if this is sufficient funding for a rail-served facility in Nyssa.”

However, Smith he is in “ongoing, regular communication” with Union Pacific on the local shipping depot.

Bentz said there is a lot of work left to do by county leaders.

“The issue will be how quickly can our local community figure out all of the elements of a trans load facility. There is a lot of stuff Malheur County is going to have to do. This is just the beginning of it. But now that we know it will be funded we can start doing that work,” Bentz said.