Next phase of Nyssa rail project will hinge on compact between four entities

Greg Smith, Malheur County’s economic development director, speaking to county commissioners at the Malheur County Courthouse in 2019. Smith told the court last week the next step for the rail reload project will be to ink an agreement between four entities. (The Enterprise/File).

VALE – The first step to retain the company to run the Treasure Valley Reload Center will most likely be an agreement between four entities.

Greg Smith, Malheur County Economic Development director, told the Malheur County Court Dec. 9 that plans now call for the letter to be signed by the county, the Malheur County Development Corp., the nonprofit entity created by the county to oversee the project, AmeriCold Logistics and the Treasure Valley Onion Shippers, a coalition of local farmers.

Smith said the non-binding agreement is necessary so that construction on the project – scheduled to kick off next month – will not be delayed.

“I am anticipating within the next 30 days, or less, that joint letter of agreement will be signed,” said Smith.

January will be a key month for the project. The Oregon Transportation Commission is scheduled to review progress on the facility on Jan. 21. A crucial component of that meeting will be the presentation by the county of an industry track agreement over the use of the rail line for the project.

Officials want to have the agreement signed before the Transportation Commission meeting in January. The commission is expected to decide then whether to turn loose of money needed for actually building the Nyssa rail center.

Smith said a more detailed agreement with AmeriCold to run the center will be inked in the future, said Smith.

“The reason we are doing this is because in order to finalize the agreement between the county and the development corporation, the shippers and Americold, it will be multiple legal documents. When you have four parties you are dealing with multiple legal counsels. It just takes time,” Smith told the court.

Part of the multi-party agreement, said Smith, will be “an understanding” that once a year all four parties meet to consider modifications.

“The reason that is important is while today there is an abundance of rail cars, that may not be the case a year from now, or interest rates may change or market availability may change,” said Smith.

Smith said officials also ran up against a snag regarding the track agreement.

One challenge revolves around the cost of rail switches.

“We will be installing the rail spurs but only Union Pacific personnel can construct the rail switches. That is per an agreement between Union Pacific and the Union Pacific employees’ union,” said Smith.

Smith said that means Union Pacific requires money for the rail switches up front.

“We have a chicken and egg situation because ODOT (Oregon Department of Transportation) will not allow the money for rail construction to be released until the industry track agreement is signed. Union Pacific will not sign the track agreement until they receive a wire for the amount of the rail switches,” said Smith.

Smith also talked to the court about a recent attempt by the county to acquire a federal grant to kick-start the Malheur County Industrial Park next to the rail reload center.

The county invested two years of work and thousands of dollars in taxpayer funds to seek a $15 million federal grant.

An investigation by the Malheur Enterprise found that the application was poorly drafted and included material that did not meet the federal requirements for the money.

Smith told the court that he received “some criticism” about the grant work.

 “I think that a lot of it is fair. I want you to know I fully accept responsibility for an application that did not get funded. We’ve learned from it and we will do better and I accept criticism that has come to me. I want to own that,” said Smith.

Previous coverage:

EDITORIAL: It’s time for an audit of Smith & Co’s work in Malheur County

Malheur County needs $15 million for its industrial park. A two-year effort to get it flopped.

Malheur County in talks over possible sale of Nyssa rail center

State gives green light to rail reload center

Malheur County faces need to borrow $2 million to make rail project run

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

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