Rail reload documents outline the private benefit from public dollars for economic development project

Americold Logistics, the billion-dollar company based in Atlanta, Georgia, has a sprawling network of 137 temperature-controlled warehouses, including one in Ontario (above), and also contracts to manage other warehouses. The firm is expected to ink a contract this month to operate the rail reload center north of Nyssa. (The Enterprise/Joe Siess)

NYSSA – Americold can buy the Nyssa rail shipping center for $1 after operating the taxpayer-funded property for 20 years under terms of an agreement expected to be finalized later this month.

The building alone at the Treasure Valley Reload Center is expected to cost $6 million in public money. The lease as disclosed to the public doesn’t detail what Americold would get for its $1.

The agreement, struck between the Georgia-based conglomerate and the Malheur County Development Corp., has been in the works for months with little public disclosure about the terms.

The Nyssa shipping center is expected to be in operation next summer, focused initially on shipping onions.

Americold will pay $2,500 a month to lease the shipping center for 20 years, according to the lease.

The company, however, has the right to walk away from the Nyssa project if it doesn’t like the economics – no questions asked.

And it won’t be responsible if the Oregon Department of Transportation decides the project hasn’t lived up to conditions and requires all state money be repaid.

Under the terms of the lease, Americold is spared from that even if it fails to “operate the reload facility consistent with the terms of the grant or any other reason.”

READ IT: County lease with Americold

Americold didn’t respond to emailed questions about its plans for Nyssa.

The lease agreement is one of several key documents that Malheur County’s economic development arm turned into state officials last month, trying to meet a June 15 deadline.

The documents included a declaration from Malheur County Judge Dan Joyce indicating the county would impose a fee of 5 cents for every bag of onions shipped from the rail facility.

The rail center is designed to cut shipping costs for area onion producers and open potentially new markets around the nation. The facility will include at 60,000-foot warehouse and office with a rail spur connecting to the main Union Pacific Railroad, paid for through a $26 million grant from the state.

Ideally, onion producers in Oregon and Idaho will truck their onions to the facility to be loaded on rail cars for shipment.

Lawmakers, county officials and onion producers worked over the past four years to make the project a reality. The county created a public company – the non-profit Malheur Economic Development Corp – to manage the facility.

Last year, the county went into debt to buy land needed for the rail shipping center that included property to be used later to develop a county-owned industrial park.

Documents released by the state also show that two of the area’s principal onion shippers and packers have reached a deal with Americold to use the shipping facility.

Executives of the two onion firms – Grant Kitamura and Kay Riley – sit on the board of the development company.

READ IT: Americold-onion shippers deal

Kitamura is the general manager and part owner of Baker & Murakami Produce Co. in Ontario while Riley is the general manager of Snake River Produce in Nyssa.

The details of the lease agreement emerge as Greg Smith, the Malheur County Economic Development Department director, notified the state last week that the start of construction would be delayed once again.

He now projects work to begin in September.

That construction start date has been pushed back repeatedly as Smith’s team worked to close deals with Americold that were months late.

Last fall, Smith’s team expected to break ground on the center in January. That was pushed back to March, then July and then August.

Smith said in his report to the state the project still would get done on time in June 2022.

The continued shift in construction deadlines – and with it the bid process for the work – is significant as construction costs continue to climb.

In June, Brad Baird, president of Anderson Perry and Associates, the engineering firm on the project, said during a development corporation meeting that extra time had been built into the construction time table.

“The cushion is being used up. It is completely doable but we are running out of cushion. We’ll get there but when we get to August, we pretty much need to be going,” said Baird.

There is already plenty of work for local contractors.

Based on data from the Malheur County Planning Department, the number of building permits issued in June – excluding Ontario – was the most in a single month since 2015.

The state notified the development corporation in April that until specific goals were met – such as a track agreement with Union Pacific and a “fully executed operator agreement and proof of land acquisition are submitted and approved by ODOT (the Oregon Department of Transportation) we will withhold any future project reimbursements . ..”

The state and Smith’s team agreed to a June 15 deadline for goals to be met that were to have been finished in January.

Smith announced at a June 16 development corporation meeting that a number of documents were turned into the state to meet the deadline, including “representation by the county as to their willingness to sell real estate to the development corporation.”

“In addition, an affidavit was submitted to the state acknowledging that the shippers and Americold have reached an agreement in concept,” said Smith.

Smith also said the industry track agreement with Union Pacific was signed.

But documents obtained from the state by the Enterprise show a “fully executed agreement” with Americold was not signed by the firm.

In his monthly report to the state filed July 7, Smith wrote Americold was expected to sign the lease by July 31.

The real estate deal with the county also was not finalized.

A deal between a group of onion shippers and Americold doesn’t appear in any documents. For months, officials indicated Treasure Valley Onion Shippers LLC – a private company – would be a major player with Americold and the rail center.

The only indication of any potential pact between any onion shippers and Americold is a letter by a law firm representing Americold that it had reached “an agreement in principal” with Baker & Murakami Produce and Snake River Produce to use the reload center.

The letter was among documents submitted to the state by Smith.

He didn’t release it when disclosing the other documents to the public.

The Enterprise obtained the letter from the state through a public records request.

While the county’s June 15 submissions still weren’t the final form required by the state, Transportation Department officials are so far satisfied with the development corporation’s progress.

“We’d like to see everything finished up. We are trying to work with them (the development corporation) to see when these things can be completed,” said Erik Havig, state Transportation Department policy and planning manager.

New tip? Contact reporters Pat Caldwell or Abbey McDonald at 541-473-3377.

Previous coverage:

State gives green light to rail reload center

Records law used to pry free Malheur County project documents

Malheur County scraps one land deal as reload dates get extended


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