VALE – Malheur County may be getting out of the development business by selling off industrial land that put the county in debt but never provided new jobs, according to one county commissioner.
The Arcadia Industrial Park is bare ground with no services, a double canopy of weeds, and acreage that is restricted from development. Malheur County bought the property while promising the community that industry would move to the site north of Nyssa and bring with hundreds of new jobs.
Now, selling the ground “would be our first option,” according to Ron Jacobs, Malheur County commissioner.
The county closed the deal on the 285-acre in 2020, providing the foundation for the Treasure Valley Reload Center and an adjacent industrial park. The county later sold 65 acres to the Malheur County Development Corp., created to put in the rail center. The remaining property included five acres ceded to the Farmer family that by law had to be left for farming, giving the county about 140 acres to sell or lease to industrial company.
But the transaction that was controversial from the start.
The county bought the property from a local family that included Jim Farmer, president of Fort Boise Produce, an Idaho-based packing company. At the time of sale, Farmer was a director of the development company – which had selected his property for the reload center.
The county paid $3,424,550, using $2.4 million loan from Business Oregon, the state economic development agency, and pulled $969,900 from the county’s contingency, or rainy day, fund to make the buy.
An independent appraisal valued the land at $1 million less than the county paid.
The prime duty to push development fell to Greg Smith and his company, Gregory Smith & Company from Heppner.
Malheur County Judge Dan Joyce assured state officials that the property was ripe for development and the right team was in place to make that happen.
“Malheur County and the staff of the Malheur County Development Corporation have experienced with economic development projects,” Joyce said in a submission to Business Oregon in November 2019.
Joyce said that the county and the development company had “the needed experience and has demonstrated similar experience via past and current development projects.”
He said the entities had “demonstrated successful completion of similar projects.” He didn’t identify those projects.
Smith’s company was put to work to round up money to develop the industrial park.
Gregory Smith & Company collected $138,000 from Malheur County over 22 months for under a new contract to principally pursue what was known as the BUILD grant.
The application sought $15 million for the industrial project, separate from the reload center.
Federal officials spiked the application, ranking it as “unacceptable.”
A contractor attending a debriefing with those officials wrote in noted that Malheur County “needed more focus on clear, direct, significant benefits.”
Smith assured county officials the lesson was learned and a new application would be filed.
It never was.
County officials late in 2022 tried to revive hopes for the industrial park, paying a Portland consulting firm $10,000 for a fresh assessment.
Mackenzie, a Portland land engineer consultant firm, delivered a five-page report last May that said more work needed to be done to decide what to do with the land and where to find money to turn the farm fields into an industrial park.
The report was the culmination of a series of meetings between Mackenzie, county officials and a select faction of local residents about the industrial park.
According to the report, those consulted said there was a need for industrial land to “meet market demand.” The report cited no information about the demand. The report said those individuals who were consulted indicated an option for the industrial park was for the county to sell or lease the land to others to develop.
Jacobs said the inability of the county to properly manage the proposed industrial park is now driving the move to sell it.
“We don’t have the manpower or the expertise to run it,” he said. “I just don’t know if that is very feasible.”
Jacobs said he favors the sale of the land, “the sooner the better.”
He said the county is working with “a couple of different people” to determine “how best to go about” selling the land. “It is just in the beginning stages,” he said.
Joyce said he hasn’t talked with Jacobs or Commissioner Jim Mendiola about sell the industrial park.
Joyce said the county should never have invested in the industrial park.
“The real issue is when this project started, we were never to have any money come out of our pocket. We should never have to come up with any money period,” he said.
The county continues to make payments to the state to pay off the loan used to buy the land as the Farmers continue the farm the ground.
News tip? Contact reporter Pat Caldwell at [email protected].
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