Nyssa rail center gets two thumbs up as construction start looms

Greg Smith, Malheur County economic development director. (The Enterprise/File).

The Treasure Valley Reload Center appears ready to deliver on its promise to save onion shippers money and operate successfully, a conclusion from state officials that sets the stage for construction money to flow and work to start this spring.

The Oregon Department of Transportation and its consultant, The Tioga Group, concluded in separate reports released Thursday that the work of Malheur County officials justifies releasing millions in state funds to build the center on industrial property in Nyssa.

The publicly-financed rail shipping center would cut costs for onion shippers who now must rely on expensive trucking or unreliable rail service to their packing plants. The partnership between the onion shippers, the national warehousing company Americold and Union Pacific Railroad would also open new markets for the onion industry.

“The project is ready to move to the construction phase,” according to the Transportation Department analysis.

The new rail center would be a central jewel in what public officials hope will one day become a robust industrial development in Nyssa.

The Oregon Transportation Commission is scheduled to meet Thursday to receive the reports. The commission then is expected to let loose more of the $26 million the Oregon Legislature set aside to fund the Nyssa project. Project organizers reported last week that work to build the 60,000-square-foot loading center and associated rail lines could start in April or May. Construction could finish by June 2022 – in time for shipping next year’s onion crop.

“This is an investment in the long-term future of the agriculture community and will help us be competitive in the global community,” Grant Kitamura, president of the Malheur County Development Corp., the entity set up by Malheur County to oversee the project. Kitamura is managing partner at Baker & Murakami Produce Co., one of the area’s biggest onion packers.

“A tremendous amount of work has gone into the project and it is rewarding to know ODOT and The Tioga Group recognize the need as well,” said Malheur County Judge Dan Joyce.

After the Legislature in 2017 reserved money for the project, the Malheur County Economic Development Department and its director, Greg Smith, took the lead in devising the project. The county created the development company and named local onion shippers and business leaders to its board and bought the acreage on the north side of Nyssa needed for the reload center.

Moving the reload center from dream to done deal required the county to show the project penciled out and that it would benefit the area’s agricultural industry.

The Tioga Group report said the muscle of Americold, a billion-dollar company with warehousing and shipping resources across the country, would combine with consolidating onion shipping into one place in Malheur County. About half the onions expected to move through the Nyssa center would come from Idaho.

The result, Tioga said, was “net economic advantages for shippers, the terminal operator and the railroad.”

In plain language, that means onion shippers and others will profit from the center.

Because of that, “Tioga is convinced that the Treasure Valley Reload Center can be designed and operated efficiently.”

Tioga said onion growers currently rely on trucking that is “expensive, relatively reliable and faster than rail service.”

“Many onion shippers in the region have rail sidings and the option to use rail service to reach the target markets,” Tioga reported. “Shippers have reported that this service has been slow and irregular in the past. Further, the railroad has been unreliable as a provider of refrigerated rail cars.”

The reload center will solve those problems, Tioga said, because onion shippers have committed to enough volume to warrant special service to Nyssa from Union Pacific. The report also said that Union Pacific now can supply refrigerated rail cars for Nyssa, freed up after it closed its own shipping center in Wallula, Washington, last year.

“Consolidation of rail cars at the reload center should ultimately permit additional gains in both price and service,” Tioga said.

Americold would move onions to four warehouses – in Georgia, Texas, Pennsylvania and Indiana – for movement on to 180 locations. Tioga said Americold is working to add rail destinations in Chicago and New York.

A key to the operation was the formation of Treasure Valley Onion Shippers, providing Americold and Union Pacific one place to arrange shipping deals instead of dealing with more than a dozen separate companies.

“This shipping consortium provides Americold with a commitment for volume and also provides the shippers the ability to bring a buying power that could not be attained individually,” the Transportation Department analysis said.

The Tioga report cited a Jan. 6 letter from the shipper group that the Nyssa center “will provide a distinct advantage for shipments compared to trucking” an “will be an invaluable resource for area shippers.”

Tioga indicated the financial benefits are likely understated because they are based only on shipping onions.

The reload center could, in fact, handle “multiple commodities,” both refrigerated and nonrefrigerated, Tioga said.

“Serving a broader set of products is an obvious opportunity to accrue additional commercial advantages for the region and to insulate the operation from agricultural market volatility,” the report said.

Contact editor Les Zaitz by email at [email protected].

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