Local government, Special Reports

Nyssa reload center may shrink, cut by one-third to save money

The Treasure Valley Reload Center could end up being considerably smaller than envisioned as project leaders struggle to overcome money shortages and escalating costs.

And even building a smaller warehouse for shipping onions depends on getting an emergency allocation of $3 million from legislators in September.

The latest shift in the publicly-owned shipping center arose during a meeting last week between project leaders and officials at the Oregon Department of Transportation. Greg Smith, Malheur County economic development director, and Brad Baird, chief engineer on the project, revealed other cost challenges still facing the project.

According to Transportation Department officials, Smith and Baird, president of Anderson Perry & Associates, said they were considering cutting the main building down by one third. That would take the shipping center from 60,000 square feet to 40,000 square feet.

They did so after the pricing for the original building construction came in at nearly double what had been budgeted. Smith and Baird estimated for state officials that they could get the smaller building done for $3 million.

That downsizing would be the latest blow to what had been a marquee economic development project for Malheur County. Construction has been underway on farmland north of Nyssa since last fall and has steadily fallen behind schedule and gone over budget.

Project elements dropped

Smith and his team have already scrapped plans for one rail spur into the project, abandoned plans for a truck scale, and trimmed down a road system to a single street that will be unpaved.

But that hasn’t been enough to get the project finished with the $26 million allocated by the Oregon Legislature in 2017. That state grant is being managed by the Transportation Department and the money flows through a public company set up by county officials to own the project – the Malheur County Development Corp. The state agency called for the meeting, held Tuesday, July 6.

We expect the facility to still move the anticipated volume of onions/rail cars as projected.

– Erik Havig, Oregon Department of Transportation

“This meeting was requested by ODOT in order to better understand how MCDC would be proposing to complete the Treasure Valley project,” according to written account of the meeting from Kevin Glenn, Transportation Department communications manager.

“The MCDC team shared with ODOT that they would need to reduce the scope of the project and that they would need additional funds in order to complete the project,” Glenn reported.

The primary change being considered is cutting the building size.

This would be the second time project managers have reduced the reload center.

When county officials submitted plans to the state in 2018, they wrote that their plans for a larger building weren’t affordable and they reduce the size then to 60,000 square feet to stay within budget.

The impact of cutting one-third from what has been in the plans for five years isn’t clear.

Smith told state officials that “he would work with Americold and the local onion shippers to help validate that the potential reduction in the size of the building will not impact the ability of the project to still move the anticipated volume of onions.”

Same volume expected

Transportation Department officials said the volume of onions is the key.

“We expect the facility to still move the anticipated volume of onions/rail cars as projected in their project plan,” according to an email from Erik Havig, Transportation Department planning manager.

He said any reduction in would be a “significant scope change” that would require the state’s approval to still allow state funding to be used on the Nyssa project.

Reducing the building size could eliminate some of the truck docks, meaning the facility could unload fewer trucks at any one time.

Officials didn’t respond to questions last week about that impact.

Grant Kitamura, an Ontario onion executive and president of the development company, didn’t respond to written questions delivered to him Friday morning. Smith has a practice of not providing interviews or responding to questions from the Enterprise.

Malheur County Judge Dan Joyce responded to written questions Friday that “I am out the rest of the day” and he sent the questions to the development company.

Officials at Americold, under lease to run the reload center, didn’t respond to questions about whether it was aware of the plans for a smaller building or how that would affect the company’s interest in running the Nyssa operation.

Unclear is what happens to Americold’s lease. Under terms of an agreement reached last September, Americold signed on to operate a “temperature controlled 60,000 square foot warehouse.” The company would pay $2,500 a month to lease the property and with a chance to buy the reload center for $1 after 20 years of managing the project.

The meeting report showed that besides reducing the building size, the project leaders also are considering eliminating the air conditioning for the building, sought by Americold. That could affect which agricultural products could move through the Nyssa center.

Smith told state officials the team is “continuing to work with Americold on the design as well as the potential for Americold to bring some additional funding to the project to help with the shortfall.”

Americold had earlier turned down a request for $2.5 million.

According to budget information presented last week to the state, the Treasure Valley project will use up the entire $26 million grant and still be without a building and other key features.

A timeline submitted by Baird to the state showed much of the base work would finish by November but listed completion date for the building as “Unknown, spring 2023?”

Building pieces already ordered

A timeline submitted by Baird to the state showed much of the base work would finish by November but listed completion date for the building as “Unknown, spring 2023?”

Project leaders already bought the steel and components for the larger building. Delivery on that $1.9 million structure is expected by next month.

“We cannot return unused portions of the building,” Baird said in an email Monday in response to questions from the Enterprise. “We will have to store the unused materials.”

Baird’s budget compilation also revealed a new expense not apparent in any previous project cost records – buying a rail engine. Such an engine would be needed to shuttle rail cars along spurs to load and assemble them into a string for movement out to the main Union Pacific Railroad line. Baird’s document showed that engine couldn’t be afforded in the current budget.

Another unsettled element of the project is the source of refrigerated rail cars needed to haul the onions to markets in the East. Project officials at one point at Union Pacific had an ample supply but as recently as March they were examining costs for leasing rail cars. At that time, a single car would cost approximately $2,300 a month.

Smith said in response to a public records request that that a single email with the cost estimates was the only document in the project files related to rail car leasing.

Glenn’s report recounted that state officials advised that Malheur County Development Corp’s agreement with the state was set to expire at the end of August. The company and the Transportation Department would have to agree on a revised timeline and changes in language to drop features such as the truck scales required in the original deal.


Your guide to the Treasure Valley Reload Center – get the history, purpose and status

DA orders county to release key budget document for rail reload center

Rail board wants to keep Smith, double his compensation for the next year

County judge says $26 million should be enough for Nyssa rail center

Malheur County blocks Enterprise from news conference on rail center

SUPPORT QUALITY LOCAL JOURNALISM – Available for $7.50 a month. Subscribe to the digital service of the Enterprise and get the very best in local journalism. We report with care, attention to accuracy, and an unwavering devotion to fairness. Get the kind of news you’ve been looking for – day in and day out from the Enterprise.