Business & economy

County economic development director says Union Pacific is committed to rail reload project

Greg Smith, Malheur County economic development director, gave an update on the rail reload project planned north of Nyssa Thursday. The facility is designed to ship commodities, such as onions, to markets across the United States. (The Enterprise/File).

VALE – Greg Smith, Malheur County economic development director, insisted Thursday that Union Pacific Railroad is committed to serving the rail shipping center planned north of Nyssa.

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

Union Pacific’s commitment to the project was a key concern raised in a report to the state Transportation Department last month.

The Tioga Group, a national consulting group, said in its Jan. 7 report that the Nyssa project needed a more firm commitment from the railroad. That report also recommended the state hold fully funding the project until land prices were settled and the volume of business the center would generate is clarified.

The Tioga report said the success of the project rests almost entirely on “the service, car supply and rates eventually negotiated” with Union Pacific.

Smith addressed that concern Thursday evening in an unusual call-in session he held for the public.

He said that in a meeting in Salt Lake three weeks ago Union Pacific officials “renewed their commitment to our facility and to our project.”

While no formal agreement is ready, Smith said the railroad is preparing a “unilateral service agreement letter.”

“We see that as a very positive step,” said Smith.

Smith also said Union Pacific asked for a design and engineering plan for the center that is 30 percent complete.

“It is extraordinarily positive that they asked us to move to the 30 percent design. If they were not going to support this effort they would have sent us a nice letter and said, thank you for your initial 10 percent lay out. But that isn’t what they asked for,” said Smith.

Another issue raised by the Tigoa report was a discrepancy about the cost of land for the reload center. Smith said while earnest money had been put down for some of the property, the public Malheur County Development Corp. would decide how much ground to ultimately buy.

The Tioga report also pointed out that Union Pacific appeared to be pulling back in its investments on refrigerated rail cars used to haul commodities.

Smith said that was a surprise to him.

“It is totally contrary to their check book in that they spent $250 million in new refrigerated cars,” said Smith.

The Tioga report also called into question the lack of an operator to manage the facility. Smith said the development corporation was not ready to seek an operator.

“Because we are a start-up, non-profit cooperation we are not in a position yet to either hire or retain someone in that capacity,” said Smith.

The Oregon Transportation Commission is scheduled to consider the Nyssa project funding on Feb. 21.