Business & economy

Money to construct Nyssa rail reload center delayed

State officials are expected to release about $23 million to help fund the construction of a rail reload facility north of Nyssa in March. (Graphic courtesy of Malheur County Economic Development).

VALE – State money to build a rail reload center north of Nyssa, expected to be in hand by New Year’s Day, instead won’t flow to the local economic development project until at least March.

Two other key elements are also falling behind schedule – buying the land for the industrial project and finishing the design.

But Greg Smith, the county economic development officer, said he expected to catch up and that construction could start in the spring. That would advance by half a year when dirt would move for the project.

State transportation officials most likely would by March release about $23 million to the Malheur County Development Corp., the county-created business running the rail terminal project, said Smith.

The development company’s plan submitted to the state last September included a detailed timeline to get onions and other local produce moving onto trains for shipment east. That timeline projected that state officials would approve the project and release money appropriated by the Legislature by Jan. 1.

Several delays, though, emerged.

Smith said the state Transportation Department decided to hire The Tioga Group Inc. of Pennsylvania to independently assess the project and determine whether it is economically feasible.

The Tioga Group Inc. then requested more information on the project. Smith said last week consultants faced a Dec. 30 deadline to issue its findings. The findings are now expected in early January.

“The staff at ODOT will look at our proposal along with the recommendation from Tioga during January,” Smith wrote in an email last week to the Malheur Enterprise.

Smith said that even with the delay “we anticipate no problems obtaining the state grant and continue to be excited with this project coming to Malheur County.”

Meanwhile, Smith wrote that the development company is “pushing ahead with talks with Union Pacific and our planners.”

Union Pacific would provide the basic rail service to the Nyssa center.

“We are anticipating that as soon as the money is released, we will have everything ready to go and begin construction in the spring,” wrote Smith.

Construction can’t start until the land purchases are done. Those deals were scheduled to be complete in January but that isn’t going to happen.

“We have preliminary agreements with the landowners, but, as with construction, we await the final money release to finalize the agreements,” wrote Smith.

Design of the loading and shipping center that was scheduled to be done by Jan. 1 isn’t complete.

Grant Kitamura, chair of the Malheur County Development Corp., said the design isn’t complete because officials are still trying to determine its size and subsequent demand for the facility. The development corporation, he said, has enough money on hand to finish the design.

Kitamura said he didn’t expect that to delay the project. The sooner the project can get off the ground, Kitamura said, the better it will be for local onion producers and packing sheds. Kitamura is general manager of Baker & Murakami Produce Co. in Ontario.

“In my business to have it as soon as possible is the best thing,” said Kitamura.

Zoning to allow the new facility was settled last month when the Malheur County Court signed off on a plan by Nyssa to expand its urban growth boundary. The plan moves about 213 acres of county land into the urban growth boundary and changes its zoning from farm use to industrial. Getting inside the urban growth boundary allows the city of Nyssa to furnish water and sewer to the facility. 

The rail reload center will depend on trucks to haul commodities into it for rail shipment.

Questions about truck traffic and its impact on local residents were answered recently with the completion of a traffic study.

Lancaster Engineering of Portland concluded that under a worst-case scenario, the facility would trigger 2,000 truck trips a day.

Such traffic would travel into Nyssa on Oregon Highway 201 and U.S. Highway 26 and then use Gem or Columbia avenues to reach Arcadia Boulevard, where the plant would be situated.

The rail reload facility is viewed by many as a major economic game changer for Malheur County. Farm products would be trucked in and loaded on to trains for shipment across the country.

Initially the facility will employ seven full time and about 13 to 19 seasonal staff. Once fully developed, the number of jobs would be closer to 125 to 150, said Smith.

In the feasibility study delivered by Smith to transportation officials in September, products – such as onions – would be loaded onto refrigerated rail cars. The plant could save producers up to $1.8 million a year in shipping costs.

Reporter Pat Caldwell: [email protected] or 541-473-3377.