Review raises questions on proposed rail center

By Pat Caldwell
The Enterprise
NYSSA – State officials reviewing plans for a rail shipping center in Nyssa raised concerns that local officials were underestimating costs and hadn’t obtained all the money needed for the project.
A team at the state Transportation Department produced the review ahead of action to approve $1.3 million in state funding for the project to go ahead.
The Enterprise obtained the review through a public records request.
Under review was the application from the Malheur Economic Development Corp. for seed money to more fully research the suitability of acreage north of Nyssa picked as the location for the agricultural project.
Despite the flags, the state Transportation Commission awarded the money at the recommendation of Matt Garrett, Transportation Department director.
The report noted that the development company had “limited direct experience developing and operating an intermodal facility” and that local team “would be stronger with partners who have experience operating an intermodal facility ”
Greg Smith, Malheur County economic development director who serves on the board of the development corporation, said no one otherwise questioned the corporation’s experience.
“We have an extraordinarily talented board of directors,” said Smith.
Smith also pointed out he has a deep background in economic development.
“I have a long record of success,” said Smith.
Grant Kitamura, general manager of Baker & Murakami Produce Co., chairman of the development corporation, agreed that the board is experienced.
“We know what we need which is very important,” said Kitamura.
The review said the application showed the project budget was short by about $1 million. The state has allocated $26 million for the Malheur County project, and the development company estimated costs of $27.3 million.
“Additional funds to achieve total cost are not identified,” the review said.
“I am anticipating we will be able to leverage that $26 million into additional dollars,” said Smith.
Reviewers said estimates for track construction “seem low” and that features that might be required by Union Pacific Railroad “could result in substantial escalation of rail infrastructure costs.”
The reviewers also flagged that a road crossing on the rail line could need work, that funding wasn’t available through the Transportation Department for such work, and that “no other funding sources have been identified.”
Smith said cost fluctuations are normal on any construction project.
“I can’t control the price of steel or fuel. Anytime you deal with construction you are dealing with variable costs,” said Smith.
Smith said the development company could use federal and state grants to cover added costs.
“How exciting is it for us to have a $26 million match to try to garner additional federal resources to build even more infrastructure?” said Smith.
Smith said he is focused on helping create a successful project for the county.
“I am going to make this a gem for the state of Oregon and Malheur County,” said Smith.
Have a news tip? Contact reporter Pat Caldwell at 541-473-3377 or [email protected].