In the community, Local government

State approval of new business plan puts reload center project back on track

ONTARIO – The state Transportation Department has given developers of the Treasure Valley Reload Center the green light to move ahead to finish the beleaguered project.

“They basically said it is a go,” said Shawna Peterson, the executive director of the Malheur County Development Corp.

The corporation was directed to complete two key tasks.

First, the development corporation needs to find an operator based along the Mississippi River to move onions. Second, state officials directed the development corporation to secure a loan to cover a $6 million funding shortfall.

The guidance from the state came during a Feb. 21 meeting, where Peterson briefed state officials on a new business plan for the project that has already devoured $38 million in public money.

State officials also want the development corporation to add details to six other milestones outlined in the preliminary business plan.

“They want more substance to each of those and they asked me to go ahead and come up with timelines,” said Peterson.

The steps needed by the state:

•Connecting the existing rail spurs at the Nyssa site to the Union Pacific mainline.

•Arranging for a rail car supply

•Securing commitments from shippers

•Updating the construction plan and budget

•Updating the utility and rail plans

Once Peterson creates a plan for those steps, state officials will review and possibly ask for revisions and then send it back to MCDC, said Peterson

Peterson said the state did not set a deadline.

“I think they all are necessary for the project to succeed but some require more work than others. I can come up with a construction timeline and refresh the construction costs and I can probably secure financing but all of those things are going to take time and effort,” said Peterson.

Peterson said gathering proposals from potential operators in places like Chicago, Memphis or St. Louis, is a “big priority.”

Now, she said, MCDC “can move from a concept to who are the operators that might be excited about getting on this project.”

Petersons said MCDC with look for grants to meet the funding shortfall but “it will most likely be a loan” to raise the needed money.

Peterson said she believes the next key steps can be done within the next six months.

“The only limiting factor will be my time and waiting on response from people,” said Peterson.

The business plan Peterson presented to state officials is a stark departure from an earlier blueprint.

The new plan calls for MCDC to finish and operate the Nyssa terminal and cover all of its costs through fees. The plan also outlines a slimmed-down version of the terminal, using borrowed money to finish the project and a significant drop in the volume of onions to be shipped from the Nyssa facility from earlier projections.

The estimated volume of onions to be shipped is expected to total 2.040 million bags of onions, compared to the 5.9 million listed by MCDC in 2018.

Under the new plan, onions will no longer be shipped by rail to East Coast markets. Instead, onions will be transported only to the Mississippi River, where they will be transferred back to trucks and shipped to the East Coast.

The first rail reload plan hinged on Americold – the company initially chosen to operate the center – managing shipments to the East Coast.

The international company walked away from its contract for the Nyssa operation last summer, concluding it wasn’t financially feasible. The new business plan revealed substantial criticisms of the original design that had not been made public.

The plan identified flaws such as a lag in transit times from Nyssa to the East Coast and too many onion receiving stations that created an “unwieldly operator network.”

Those problems, though, were never disclosed to state officials.

In a Thursday, Feb. 29 email, Erik Havig, Transportation Department planning manager, said the state was in the dark regarding of any issues with Americold.

The agency “was never made aware of concerns or criticism of the Americold distribution plan,” Havig wrote.

Board members who have been in place since MCDC formed in 2017 have not responded to questions about Americold’s shortcomings. There is no record they raised concerns in public meetings. This includes Grant Kitamura of Baker and Murakami Produce Co. who has been MCDC president since the start, Corey Maag of Jamieson Produce who is also president of Treasure Valley Onion Shippers and Kay Riley, former owner of Snake River Product.

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

Previous coverage:

YOUR GUIDE: What is the Treasure Valley Reload Center?

Rail center plan projects no more taxpayer support, big savings for onion industry

State halts funding for Treasure Valley Reload Center, imposes conditions

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