Feds scuttle funding needed for Malheur County’s publicly-owned industrial park

Local elected leaders hoped to use a $15 million federal grant to boost expansion of an industrial park near the site of a rail reload facility north of Nyssa. Last month, officials learned that federal authorities turned aside their application. (The Enterprise/File)

NYSSA – Malheur County officials learned recently that they won’t be getting $15 million in federal money considered crucial to developing their industrial park in Nyssa.

The county invested two years of work and thousands of dollars in county funds seeking the grant, needed to put in basic services to make bare ground useable for industrial purposes.

The industrial park was to be a companion to the Treasure Valley Reload Center, a rail shipping center paid for by the state.

That project is behind schedule but organizers say construction should start early next year with onions shipping out by fall of 2022.

The rail center is meant to cut transportation costs for area onion shippers and expand their markets across the country. The center is being built with $26 million in state money.

Malheur County Judge Dan Joyce and other county officials have long dodged the question of how the county would come up with the millions of dollars needed to turn more than 200 acres of farmland into an industrial park.

County officials say their hope now is to try again next year to get the federal money. The industrial park meantime will remain sagebrush and weeds.

The county was counting on the U.S. Transportation Department to hadn out a grant called Better Utilizing Investments to Leverage Development – or BUILD. The federal agency announced its latest round of funding last month, and only one Oregon project, in Hood River, got money.

Greg Smith, director of the Malheur County Economic Development Department, said public bodies usually have to apply several times before they are awarded the money. He said he doesn’t yet know why the county lost out.

Smith and the county have been working on seeking the grant for more than two years. Smith’s company is paid $8,000 a month to run the county’s economic development agency and in June 2018 he asked for and got another $6,000 a month. Putting together the application for the federal grant was listed as one of the justifications for the extra pay but over the next year, the county made little progress on that work, based on public records disclosed last year to the Enterprise.

Malheur County officials have known of the failure of their grant application since mid-September but made no public announcement.

The county applied for $15 million in May, supported by U. S. Sen. Ron Wyden and U.S. Rep. Greg Walden. Walden has particularly close political ties to the Trump administration.

The request included $5 million to run new industrial-sized water and sewer lines from downtown Nyssa to the property.

“It will be imperative to provide full water and sewer service to the site to accommodate additional site development and to provide needed fire flow capabilities,” the county said in its May application.

The county also asked for another $3 million to get trucks to the industrial park safely and provide rail spurs to service the park. Rail service is already budgeted for the reload center, but the additional money would be needed to get add track needed by other industry moving into the Nysa park.

Road improvements were needed to “properly and safely route truck traffic and other traffic from the state highway system to the site,” the state application said. Those road fixes would include “a center deacceleration/turn lane for southbound traffic, and a deacceleration lane for north bound traffic.”

The grant would also pay for a half mile access road from the state highway to the industrial park.

The need for such improvements remains murky. The application specifically pointed to the road improvements as a key for safety. But in May, Brad Baird, president of Anderson Perry & Associates, the firm contracted to do engineering work on the project, said major road upgrades weren’t needed.

 “We can sufficiently serve the reload center with no off-site road improvements completed,” Baird wrote in an email to the Enterprise in May.

Baird, in an email to the Enterprise Monday, clarified that if the industrial park does expand – and if truck traffic into the site climbs – road improvements will be necessary. The application also asked for $4 million for “site equipment” that wasn’t described.

Grant Kitamura, president of the Malheur Economic Development Corp., said the money was intended to buy rail cars at a time when the supply of special refrigerated cars was in question.

That supply evolved into a challenge early on for the project.

In May 2019, Union Pacific agreed to ship onions from the Nyssa facility once it was built but wrote in a letter to county officials it could not commit to providing rails cars for “seasonal onion volumes.”

The county considered leasing and buying its own cars and also at one point said the private company being considered to run the rail center could provide those cars.

Smith said accessing rail cars is no longer a problem. He said Union Pacific is “almost to the point of mandating that we lease their cars” because “there is a glut of reefer cars.”

The county decision to buy the 290-acre parcel for the industrial park and rail center proved to be controversial in late 2019.

A Dec. 30 meeting of the Malheur County Court attracted a standing-room-only crowd where a half dozen residents voiced concern and opposition to the county’s plan to buy the property.

The court though ploughed ahead on its plan to buy the land, taking nearly $1 million out of its emergency fund and borrowing another $2.4 million from the state.

Joyce and County Commissioners Don Hodge and Larry Wilson inked the deal despite getting an independent appraisal valuing the land at $1 million less than the county was paying.

At the time, the county told state officials it needed $15 million for developing the park, but repeatedly ignored questions from the Enterprise about where that money would come from.

Expansion of the industrial park will have to wait until “we receive additional funding.”

“Our long-term goal over the 20 years is to create an industrial park for the county that businesses and industry can locate into,” said Smith.

News tip? Contact reporter Pat Caldwell at [email protected]

YOU CAN HELP KEEP LOCAL NEWS FLOWING: Reader support allows the Enterprise to provide in-depth, accurate reporting that otherwise would not get done. Keeping the community well informed is essential. SUBSCRIBE – $5 a month, automatically. DONATE – to provide additional support.