Local government

Americold bails out of agreement to operate the Treasure Valley Reload Center

VALE – The Treasure Valley Reload Center has suffered another major setback as the multinational company expected to run the Nyssa operation pulled out.

Americold notified project leaders that the shipping depot was not “financially viable” for the company in a letter dated Thursday, July 13.

Project leaders have long touted their partnership with Americold, saying the company could profitably open up new markets for Malheur County onion producers.

Directors of the development company overseeing the project said the Americold news was a shock.

Shawna Peterson, executive director of the Malheur County Development Corp., told the board on Tuesday, July 18, that she would start looking for a new partner.

Americold was slated to run the shipping terminal, handling the details of taking onions in at Nyssa and getting them on east-bound trains. They could do so at lower cost than trucking, industrial officials had said.

Americold and the development corp., inked the lease in 2021. The deal was a sweet one for Americold. Under its terms, Americold was set to pay rent at a fraction of what is standard and carried a no-fault clause where the company could abandon the project if finances didn’t pan out. The lease also stipulated that if the company operated the facility in Nyssa for 20 years, it could buy the multimillion-dollar project for $1.

Americold triggered a provision of the lease allowing the Atlanta-based company to break the deal with 60 days’ notice.

“It’s obviously not the most favorable thing.”

–Corey Maag, board member of Malheur County Development Corp.

The letter noted that “due to a lack of commitment and resources behind this project, the project has been significantly delayed (now stretching over several years) with no known or scheduled completion date.”

Americold also said it had “determined that operation of the TVRC following the completion of construction, if completed, is not financially viable for Americold.”

The development company said in a subsequent press release that “Americold cited construction delays and anticipated insufficient customer volumes as the basis for its determination.”

Project leaders already had hit “pause” on the project to reassess. The development company said in its press release that it did so “to best plan a successful future for the project. To that end, the MCDC team is updating the business, operational, and financial plans and exploring all options.”

The loss of the global conglomerate is yet another blow to the beleaguered rail project. The rail project has faced delays, missed deadlines, lack of funds that required two state funding bailouts and an injection of cash from the county to keep it afloat.

For years the project was steered by Greg Smith, a state lawmaker from Heppner, as the Malheur County Economic Development director. Smith also served as the project manager for the reload center. Smith, though, resigned from his county position in June 2022 but was retained by the development corporation. Smith quit his position as project manager in February.

After Smith’s departure, the development corporation hired Ontario attorney Shawna Peterson in March to be its executive director.

Initially touted as a $26 million project, costs for the public-funded rail center have steadily climbed over the past two years. Now the total price tag for the center stands at around $44 million. The county recently asked for a third bailout from the state – at $8.5 million – but were notified the state would only devote $5 million more for the project. That means county officials must find another $5.5 million to finish the stalled project.

Development corporation officials began to discuss Americold as a candidate to operate the rail center in 2019.

At the development corporation board meeting Tuesday, July 18, officials expressed shock about Americold’s decision to bail. Yet, rather than an agonizing reappraisal of the project, officials saw some good from the Americold decision.

“To a degree I am optimistic about it,” said Kay Riley, a former onion executive and a member of the development company board.

Riley said the relationship between the development corporation and Americold, while agreeable, wasn’t “a perfect marriage.”

That was because, he said, Americold was a real estate and storage company.

“We haven’t been on the same wavelength. They had a hard time getting out of their business model. From an onion producers’ perspective, we don’t want to store anything,” he said.

Board member Cory Maag said the loss of Americold was “less than ideal.”

“It’s obviously not the most favorable thing,” he said.

Peterson said now the development company will search to find another operator for the planned rail facility. There is no new completion date for the project.

READ ITAmericold letter

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

Previous coverage:

County inks deal with local engineering firm to conduct review of rail reload project

County court approves $2 million in bailout funds for Treasure Valley Reload Center

More money will be needed to finish rail reload center while construction remains stalled

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