Nyssa’s rail facility has ‘reasonable chance’ to succeed, consultants conclude

VALE – Malheur County officials who were on the verge of losing a proposed rail shipping center have now persuaded a state consultant the project has a “reasonable chance” to be a success, according to a new report released Wednesday.

“The additional information suggests that the proposed service is different from what is currently offered, will be of value to Treasure Valley shippers and has a reasonable chance of operational and economic viability,” the Tioga Group wrote in a review submitted to the state Transportation Department.

The new assessment was released Wednesday, just one day before the Oregon Transportation Commission is scheduled to make a final decision on the proposal. The Tioga Group, a Pennsylvania firm, was hired by the state last year to evaluate the Nyssa proposal and similar ventures in the Willamette Valley.

The new information appears to put the Nyssa project back in the running for $26 million in state money. State transportation officials said just a month ago that based on what they knew, they wouldn’t approve the project. They agreed to give Malheur County one more chance to prove the case.

Based on the Tioga report, the county’s economic development arm did just that.

Key points in the Tioga Group report are:

–      Onion shippers will save up to $2 for every bag shipped.

–      More rail car shipments would flow from Malheur County than originally projected – 2,000 rather than the initial estimate of 1,853.

–      Nine local onion producers who were not identified pledged to use the facility.

–      Area producers would reap close to $10 million in savings annually from the center. That’s five times what economists projected last fall.

–      Malheur County would need a rail car fleet of between 150 and 200, which it would lease year round.

–      A cold storage facility may now be needed to accompany the rail reload center. The county has proposed a 60,000-square foot warehouse at the Nyssa location.

Malheur County officials have worked to get the reload center off the ground for more than two years. The facility is seen by many as an economic game-changer for the county.

The Tioga Group report was in response to a request by the Transportation Commission in June for more information from supporters of the $26 million Nyssa project.

State officials asked supporters of the rail center for information on rail service costs, shipping prices, provide a business plan and to furnish proof the facility will carry a sustainable customer base. Those answers were due to the state July 12.

Overall, the Tioga Group report said, Malheur County officials “appear to have supplied the key information requested in the OTC letter.”

The Tioga Group said it couldn’t independently verify the information provided by the county.

The new information showed the proposed reload center will be an immense boost for the local onion industry and solidified the need for the project.

“The direct shipper savings are private benefits, and may or may not translate into public benefits,” the Tioga report said.

The consultants also said that with its own fleet of rail cars, Malheur County might “arrange the rail service from existing sidings or other cold storage facilities, without constructing a new cold storage facility at Nyssa.”

Grant Kitamura, president of the Malheur Economic Development Corp., the public corporation in charge of the rail project, wrote to the state in a last-ditch pitch that the Nyssa project was needed.

“We believe the answers provided in this document fully show the need, the economic viability and the required time frame to make this project a success,” Kitamura wrote.

He said the Nyssa project would help 25 local shippers “within 30 miles of our proposed transload facility.”

The facility will greatly enhance area onion producer’s ability to ship their product faster, wrote Kitamura.

“The delay in shipping our product costs growers, packers and shippers every year. With the increasing demand for onions around the nation and the shortage of trucks and drivers increasing, the need and economic viability of rail service will only increase,” wrote Kitamura.

Kitamura told state officials the Nyssa project would cure three challenges facing Malheur County’s onion industry. He cited the lack of trucks and increasing trucking costs, the inability of shippers to take care of small customers, and the inability of large shippers to have an assured source of rail cars from Union Pacific.

Kitamura wrote that the rail center is the “only viable option available to maintain our market share and potentially increase it. The facility will enable the local 110 family farms that raise onions to prosper and succeed in (a) very competitive situation,” wrote Kitamura.

Kitamura wrote the local onion industry “represents $80-100 million” in sales for the county.

 DOCUMENT: State consultant’s report

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

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