Greg Smith, Malheur County economic development director. (The Enterprise/File)
VALE – Malheur County officials, in a foray into the industrial development business, plan to buy more than 200 acres of raw land, take the county $2 million into debt, and secure millions more to make the land useful to industry.
Dan Joyce, Malheur County judge, recently signed the loan paperwork for the county to borrow $2.1 million from the state economic development agency to buy two big chunks of real estate in Nyssa.
The debt and expanding real estate holdings are tied to development of the rail shipping facility, the Treasure Valley Reload Center.
The state Transportation Department already is giving the county $600,000 to buy land needed for that agricultural operation.
But county officials say they need more money to buy the rest of the property on which the shipping center would sit and to buy a second nearby property.
The county’s application said one block of 148 acres “is needed to realize economic development opportunities associated with the reload site” and the second one would “support industrial development for the area.”
The county application, though, doesn’t identify potential employers or say how many jobs could land on the raw land. Across the county there is already more than 600 acres of privately owned industrial land, much of it developed and ready for industry.
In its loan application, county officials explain that money to repay the $2.1 million borrowed from the state’s economic development agency would come from “Malheur County as well as future land sales.”
That means, according to state officials, that county taxpayers would be on the hook for the loan.
County officials, however, won’t explain their land rush or what costs lie ahead for taxpayers to make the land useful to industry.
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Joyce and Greg Smith, Malheur County economic development director, have a standing practice of declining interviews with the Enterprise. The two didn’t respond to detailed written questions about the real estate deals and debt, and Smith last week told a reporter to submit a public records request to get such information.
The idea of putting the county into debt to lure industry is a recent development.
Until recently, the state was expected to write all the checks needed to make the shipping center rise from farmland north of Nyssa. But state officials balked at Smith’s proposal to buy more land than needed for the rail center, and that has set off the recent scramble to find other money.
Here’s why.
Malheur County inked a deal in July 2018 to buy a 285-acre parcel known as the Farmer property as the site for the shipping center. When the state said it would only pay for 65 acres, county officials in October cut down the size of the buy but it still exceeded the state’s limit.
That left county officials seeking $1.7 million from somewhere else to buy the raw land that is envisioned as an industrial park adjacent to the rail shipping center.
The county had already applied to the state in October to borrow that money when county commissioners also decided to buy another Nyssa parcel and borrow even more as part of the same loan.
This 79-acre parcel is near the site of the rail shipping center. A company called Nyssa Industries Inc. has owned it since 1993 and agreed to sell it to the county for $396,000. Larry Wilson, a Malheur County commissioner and real estate broker, holds stock in the company.
The property loan now is under review by Business Oregon, the state’s economic development agency.
“We have to get the appraisal in,” said Scott Fairley, regional development officer for what is known as BizOregon. “Most of the front-end work is done. It has to go to contracting, through us, and then to the Department of Justice for review. Once that is done, it should be good to go.”
But the borrowed money won’t cover another major expense in industrial development – putting in utilities needed to serve industrial customers.
Both Nyssa sites would need utilities such as sewer and water, according to county records. Malheur County officials estimated a year ago that getting needed services to the Nyssa Industries property could cost several million dollars.
The county is asking for help from the state on that front as well. It applied for a special state program that would reimburse up to $4.5 million in utility and street costs.
That payment from the state would only come after the property is developed and an employer has put 25 people to work at an average wage of $50,000 – 50% higher than the current average wage in Malheur County. The county calculated it would take 18 years to get back its investment in the utilities.
County officials haven’t disclosed where they would get that $4.5 million in the meantime to pay for such costs.
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