Malheur County scraps one land deal, as reload dates get extended

Local onion producers hope a new rail reload center near Nyssa will mean higher profits. (The Enterprise/Pat Caldwell)

VALE – A proposed land deal seen as a crucial piece to expanding industry in Malheur County was scuttled last week.

Malheur County will not move ahead on a two-year-old plan to buy a 76-acre parcel owned by Nyssa Industries, officials decided March 17.

Malheur County Judge Dan Joyce declined to comment on the decision.

The price of the Nyssa Industries property was $394,650 and two weeks ago, the Malheur County Court pushed the closing date on the property to July 31.

Larry Wilson, Malheur County commissioner, is a minor shareholder in Nyssa Industries but has recused himself from any deliberation on the property.

County officials originally believed that the state’s $26 million for the Treasure Valley Reload Center could be used to buy the extra land. The acreage is south of the proposed reload center, separated by another privately-owned parcel.

Previously, Joyce said the county wanted to buy the property so it would not “miss an opportunity for whatever is to come.” 

Joyce said the county wanted to “keep the door open” on the property.

In November, the county included the property in its bid to win state tax benefits for future development.

The Nyssa Industries land “is vacant and ready for development. There are few practical constraints to development of both parcels.”

The county said in its application, however, that “a development plan for the Nyssa Industries property has not been prepared yet.”

The application said the property would be developed by the county and Malheur County Development Corp., the county-created company overseeing the rail project.

Grant Kitamura, president of the Malheur County Development Corp. said the land wasn’t needed for the shipping center and a planned business park adjacent to it. 

“All we need is what we got,” said Kitamura.

The county already jumped into the land development business when it used $1 million in taxpayer funds to help jumpstart the purchase of 290 acres of land owned by the Farmer family in January.

The total cost of that deal was $3 million and a subsequent independent appraisal valued the acreage at $1 million less than the county agreed to pay.

Meantime, progress on the rail center continues to slip behind schedules originally outlined by the Malheur County Economic Development Department last October.

Key “milestones” that have to be accomplished for the state to release more money have been pushed out, according to a change order filed with the Oregon Department of Transportation by the county. The document was released to the Enterprise by the state.

The county still hasn’t reached a deal with Americold to operate the shipping terminal. The original deadline of Dec. 16 has been extended and isn’t expected until April 15.

An agreement on shipping fees and rate structures was also supposed to be inked by March 15 but that deadline was advanced to April 30. Fully updated financial statements based on an agreement with an operator and the amount and terms of any subsidy for the center were also set to be finished by March 15. The new deadline is May 1.

Other deadlines were missed as well. For example, the state wanted a 30% approval on railroad signal design and “the exact milepost of proposed switches.” The original deadline for the switch design was in mid-December but was pushed back to Feb. 1. The deadline has been advanced now to April 1.

According to the state documents, a new appraisal of the acreage to be used for the shipping center – about 65 acres –was supposed to be originally complete by December. That didn’t happen and the deadline was reset for March 15. The new deadline for the appraisal is April 30.

The reasons for the missed deadlines, according to the change order, run the gamut from stalled negotiations with a potential operator, confusion on the exact acreage to be appraised for the center and a delay by Union Pacific Railroad in accepting the 30% design. 

“The 30% design has been submitted and awaits final approval from engineering group from (the) railroad. We have been assured this will occur within the next two weeks as the rail staff was behind on other projects,” the change order said.

The change order also noted the delay in the appraisal of the land for the project stalled because of “problems with clarification with ODOT on exact acreage for reload center has resulted in delay of supplying information.”

“The determination of the exact area of land needed for just the reload facility has not been set by ODOT,” said the change order.

That isn’t a decision made by the state, but by the county, said Cecelia Gilbert, program manager with the state Transportation Department in an email last week.

According to the state, the estimated acreage for just the reload center facility is 65 acres. That figure, though, isn’t set in stone, said Gilbert.

“Until we see an actual proposed map, it is not clear,” said Gilbert.

County officials have been negotiating with a potential operator for at least a year but have declined to name the firm. Other records, though, show that Americold, a national warehousing company, is in talks with the county.

According to the change order, the delay in negotiations with an operator were hindered “due to expansion of proposed markets new, (so) data was necessary to determine volume, therefore rates and schedules. This increased volume due to new markets should be complied by next week and used in upcoming negotiations.”

The change order said the proposed operator “brought to the table alternative destinations for shipments. Initial discussion for the reload center centered around one destination in New York. More shippers moving more product to different locations changed the negotiations and pricing structure discussion.”

Have a news tip? Contact reporter Pat Caldwell at [email protected] or 541-473-3377