Greg Smith, Malheur County’s economic development director, speaking to county commissioners at the Malheur County Courthouse on Wednesday, Dec. 11. (The Enterprise/File)
NYSSA – Work on the new Treasure Valley Reload Center is falling behind schedule just two months after county officials agreed to an ambitious timeline that would have Nyssa shipping onions in late 2022, according to state records.
The Malheur County Development Corp., the public company tasked with managing the $26 million project, advised the state a month ago that it would be delayed by as much as two months in completing initial tasks.
Greg Smith, Malheur County’s economic development director, advised the state Transportation Department just four days before the county’s first deadline a variety of circumstances led to the delays.
Grant Kitamura, president of the development company, said “You need to ask Greg” in response to written questions about the impact of the delays.
Smith didn’t respond to written questions.
Malheur County Judge Dan Joyce, also sent written questions, cited a technicality in responding: “We do not have an agreement with ODOT.”
The state contract is with the county’s development company, although the county is funding real estate and other costs for the project.
Long touted as a major economic game-changer for the county, the rail center is intended to ship locally-grown onions faster and with more certainty.
In July, the Oregon Transportation Commission approved a $26 million deal with the county, and a subsequent agreement finished in October listed a number of conditions – or “milestones” – the Nyssa project had to meet to continue drawing the state money.
On Dec. 12, Smith requested from the Transportation Department an extension on the first six milestones.
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By Dec. 16, the county was to have initial plans for the project completed along with engineering work and schedules complete. That deadline was pushed out to Feb. 1.
Thirty percent of the railroad design that showed the exact location of proposed switches was also due Dec. 16 but it now has a new deadline of Feb. 1.
The county also was to have in place a contract to hire a terminal operator, crucial to determining operating costs and prices for shippers. The county got an extra two months to finish that work as well as finalizing a rate structure for shippers.
The county told the state that “discussions with the proposed operator continue.”
The holidays also played a role, the county wrote.
The county was also apparently stalled as it waited on the creation of a new private company consisting of local shippers to work with the operator for the facility.
“It was undetermined that a LLC was needed to negotiate with the operator. Once determined the LLC was created in a timely manner with appropriate paperwork. The corporation is now negotiating with the operator,” wrote the county.
The county now has until March 1 to provide new financial statements that would show the economics of the publicly-owned shipping center. The county then also has to show “the amount and terms and conditions of any subsidy.”
Erik Havig, planning section manager for the State Department of Transportation, said deadline extensions on projects like the rail reload facility are not uncommon.
“This is pretty normal in the Connect Oregon program,” said Havig. “Especially large and complex projects like the Nyssa project.”
At a meeting of the county’s development company board last week, Smith said the deal to acquire the Nyssa acreage needed for the project should be done soon.
Smith also said a meeting with AmeriCold – in line to operate the facility – had been scheduled for Friday, Jan. 3.
“I am a little uneasy about that. We are still trying to figure out which shippers are in and who is not and what level of commitment we will be able to provide in that conversation,” said Smith.
Kitamura said 14 onion shippers so far had agreed to participate.
“And probably a potential of one or two more and they represent about 75% of the shipping out of the valley,” said Kitamura, who also is chief executive officer of Baker & Murakami Produce Co., an Ontario onion packing firm.
Kitamura also emphasized the two main “keys” for the facility will be equipment – such as rail cars – and speed.
“I think the equipment is available but the real key is the speed of the railroad, the performance of the railroad and then, again, the price, the cost. It has to be below trucking,” said Kitamura.
News tip? Contact reporter Pat Caldwell: [email protected] or 541-473-3377.
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