CORRECTION: The Treasure Valley Reload Center will actually ship 66% less train carloads of onions than originally planned. An earlier version of this story incorrectly reported the center would ship one-third less train car loads. The Enterprise apologizes for the error.
VALE – State Transportation Department officials turned down a plea for more immediate funding for the Treasure Valley Reload Center last week, raising questions about when the beleaguered project will get finished.
The Malheur County Development Corp. sought what its board thought was an available $1.2 million to pay for consultants and other work considered essential to move the project ahead.
State officials at the Oregon Department of Transportation later confirmed only $800,000 remained in state funding for the project and last week kept that off limits.
“ODOT will not support releasing funds for new work in support of this facility,” wrote Erik Havig, Transportation Department planning manager, in a May 2 letter obtained by the Enterprise.
READ IT: State letter to MCDC
Project leaders sought money to finish analyzing shipping routes for onions, assess construction of the facility’s main warehouse and complete the installation of rail lines.
Shawna Peterson, the executive director of the corporation, estimated in April that MCDC would need up to $250,000 immediately to move forward.
Peterson last week didn’t acknowledge the letter when asked about it by the Enterprise. Instead, she said she intended to discuss more funding from the state in a private meeting with transportation officials in Ontario this week.The MCDC board is scheduled to meet in Vale on Thursday, May 9.
Peterson and the board face insistence from the Transportation Department that key steps have to be completed before more state funding is released. The state has already funded more than $28 million of a project now estimated to cost $40 million.
Last August, the state announced it was putting a freeze on any more funding over concerns about the viability of the Nyssa project. MCDC stopped work on rail lines and the warehouse building as it ran out of money. The multinational company under contract to run the rail depot dropped out.
The state outlined three key steps that MCDC needed to be complete before more money was funneled to the county. Those steps included an updated business plan, financing to cover remaining construction costs and securing an operator for the facility.
The development company submitted a new business plan to the state in February. It projected the facility would ship one-third less train carloads of onions than originally planned but could cover operating costs without more public money. The facility will actually ship 66 percent less train carloads than projected.
In the letter, Havig wrote the new business plan “shows a reasonable value to the state for completing the facility.”
Havig said the state questioned the overall sustainability of the plan.
“The benefit is less clear and convincing given the reduction in carload volumes,” his letter said.
He also encouraged the development company to pursue what consultants advised earlier this year – “to explore and promote expansion of the commodities that could be exported.”
“We also support MCDC looking for opportunities for using this facility for potential goods importing and distribution,” the letter said.
Havig also noted the corporation’s financing plan needs more work. Now, the corporation faces about a $6 million funding shortfall.
“The size of the funding gap to complete the facility continues to be a question,” wrote Havig.
Havig said the state still needs a financing plan it requested last August that identifies just how much more money is needed and “how MCDC will make up that shortfall, such as loans, grants, private funding contributions, etc.”
“ODOT is not asking for proprietary financial information, but we would like to know the planned sources for grants along with your plan if those grants are unsuccessful,” wrote Havig.
Finally, Havig wrote the effort to find an operator for the facility must be completed.
Havig agreed with project leaders that the search for an operator was a “multi-phase effort” and contingent upon the facility being fully funded. Yet he wrote the state needed “some level of agreement” with a potential operator “that demonstrates to the extent possible there is a commitment to operate the planned facility.”
“We are happy to continue to work with you through this process but want to reaffirm the importance of demonstrating there is an experienced operator committed to managing this facility when opened,” wrote Havig.
The reload center was originally designed to ship onions by rail to east coast markets. The project, began in 2017, faced cost overruns and missed deadlines for more than six years.
The center was originally scheduled to open in 2020. MCDC officials recently had projected they could get the center finished and ready to ship by late this year.
Previous coverage:
Rail center plan projects no more taxpayer support, big savings for onion industry
Key study that justified Nyssa reload center now doubted by long-time board members
State approval of new business plan puts reload center project back on track
Consultant: Unclear business plan, incomplete design impede Nyssa rail center
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