Proposed Nyssa facility faces important deadline for state money

County leaders face two important deadlines to submit information about a proposed rail reload center north of Nyssa to the state this month and in May. (The Enterprise/File).

SALEM – The Oregon Transportation Commission is scheduled to decide in May if Malheur County gets more money to move ahead with a multimillion-dollar rail center north of Nyssa.

About $24 million in taxpayer dollars is on the table for the project and to get the money the county must satisfy the state that it has a terminal operator in place and that Union Pacific has agreed to start service.

The Treasure Valley Reload Center is the centerpiece of a local economic development plan to create jobs and bolster the $80 million onion industry. According to the county, the shipping center would cut costs for growers and shippers by about $2 million a year, savings that would flow to those interests. The center would employ seven year around and up to 19 seasonal workers, according to the county.

For more than three years, lawmakers and area officials worked to make the project a reality and the county created a public company – the Malheur Economic Development Corp. – to oversee the venture. Every local government agency in the area supported the project and, crucially, the county won a promise from the state for $26 million to build it.

The Transportation Commission is expected to decide its fate May 16, but Malheur County officials have said Gov. Kate Brown has promised to see it is built.

Transportation Department officials last week detailed hurdles on the path to the finish line, with Malheur County’s ability to clear the hurdle vital to advancing toward the state money.

County officials were to provide some detailed information by this Tuesday and face another essential deadline next week to prove the viability of the Treasure Valley Reload Center.

“It will really be a judgment on your part. If you are not comfortable, this will be the spot where you say we are done and no sense moving forward,” Erik Havig, manager of the state Transportation Department’s planning section told the commission last week.

Malheur County officials had expected a green light from state in January.

But access to the state money needed to build the Nyssa project has been delayed for months now over questions of the viability of the rail shipping center. State officials and their outside experts have said Malheur County needed to provide more solid information before they could recommend turning over the state money.

Now, the clock is ticking.

County officials had until this week to explain which company would run the rail center who would supply the specialized rail cars needed to haul onions and other produce. They also were to show the county is well on the way to striking a deal with some company to run the Nyssa center.

By next week, the county’s economic development officials have to demonstrate that Union Pacific endorses the business case for the shipping center and would provide new service to Nyssa.

That operator would be charged with negotiating with Union Pacific regarding shipping rates and finding the refrigerated rail cars to ship commodities.

Grant Kitamura, president of the Malheur Economic Development Corp., said last week that work on a contract with a facility operator is moving forward.

Once a deal with a reload facility operator is inked, said Kitamura, the question of rail car access would potentially be solved.

“An operator knows the business, the whole deal, and will be able to, hopefully, procure cars,” said Kitamura.

Kitamura declined to go into detail.

“Progress is being made but nothing is finalized,” said Kitamura. Kitamura is managing partner of Baker & Murakami Produce Co., an onion packer in Ontario.

The state last week cited three key factors in deciding whether to move ahead with the Treasure Valley Reload. Center – the certainty of a railroad serving the project, the likelihood of success, and economic development benefits.

The railroad issue is first up. The state wants information from the railroad itself and then evidence of “a clear, reasonable, and likely path towards approval of service by the rail entity,” according to a state memo issued last week. Without that, the Transportation Commission should consider dropping the project.

The second is the business case for Treasure Valley Reload Center, and the state memo said the Transportation Commission should determine “a reasonable likelihood of success,” “an overall positive economic benefit to Oregon,” and “a reasonable business case worthy of the investment of public funds.”

If the project doesn’t do that, the memo said, the proposal should be dropped.

In the third step toward a decision, the state memo said the Transportation Commission should consider among other factors how ready the project is to move forward and whether it would trigger “additional growth and investment.”

But even if the Transportation Commission backs the Nyssa project, county officials won’t leave the meeting with a check to start work.

Instead, the state would negotiate a deal that would “include clear and specific milestones to help minimize risk.” That might require Malheur County officials to periodically return to the Transportation Commission to report in before getting a round of funding.

Kitamura said he believes the development corporation would answer all of the commission’s questions by the May deadline.

“We have a viable project. There was an issue with not having equipment but with the right operator they will have access to equipment. Our intent is to provide them the confidence it will be successful and answer all of their questions,” said Kitamura.

Kitamura said he is “more confident than ever” about the reload facility.

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

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