Business & economy

Treasure Valley Reload Center gets vital state money as new rail spur issue emerges

Project leaders for the Treasure Valley Reload Center will get badly needed state money to revive the rail center.

The Oregon Transportation Department agreed to release $100,000 for two immediate tasks seen by officials as critical to putting the train depot back on a path to completion.

The Transportation Department warned in a May 6 letter to the reload center project managers, however, that there may be new problems with the rail spurs already built at public expense.

While the infusion of funds breathes life back into the project, the money is only a modest step. The big lift for the project is to consider revising the entire project, from the size of the building to the layout of the tracks.

The revisions after six years of planning and construction follow new estimates the Nyssa center would ship only one-third as many onions as envisioned as recently as last year.

Leah Horner, Transportation Department assistant director for operations, committed to the new funding in a letter to Shawna Peterson, executive director of Malheur Development Corp., the public corporation established by Malheur County to oversee the project.

The state last August put a freeze on more funding for the project, with officials insisting that MCDC establish that going ahead made business sense, that there was a plan for raising up to $10 million still needed, and to ensure an experienced shipping company would operate the Nyssa facility.

Horner said the state would release $100,000 requested by Peterson to complete two key tasks to keep the project going. That includes finishing a study to determine market destinations for local onions going by rail, work that will cost $15,000.

Another $85,000 is needed to finish never completed rail work at the site to tie the reload center to Union Pacific Railroad’s mainline.

Peterson, in a May 29 letter to Horner, wrote that a “small amount” of earthwork had to be done before Union Pacific would connect its mainline.

READ IT: ODOT letter

Horner responded that there was a “good business case” to release the funds to complete the connection.

She said the rail spurs at the reload center would have no value if they weren’t tied in to Union Pacific’s mainline. She said finishing the rail system could attract different industries, beyond onion producers, to use the rail center.

The project, which has consumed $30 million in public money, was once scheduled to open in 2019. The original cost of $26 million has grown to an estimated $40 million.

The state is holding about $800,000 allocated to the project earlier and another $5 million budgeted by the Legislature last year. MCDC has been hoping to tap into state funding for expenses it has no money to cover.

Horner noted in her letter that Peterson had met with the Transportation Department officials to discuss the funding challenges and they have “gained a better understanding.” of MCDC’s needs.

Union Pacific officials recently told state officials that additional work is needed to make the two vital rail spurs “usable.”

“ODOT does want to encourage MCDC to follow up with UPRR to ensure the current rail structure construction is approved by UPRR for use,” Horner wrote.

Peterson said in an email on Friday, June 7, that Horner’s letter was the first notice she had that already-constructed tracks might not meet Union Pacific standards.

Peterson said she has reached out to Union Pacific officials to learn the scope of what needs to be done. The cost and who will be responsible for the cost will depend on what she finds out, she said.

It’s unclear why the work to connect to the mainline was not completed before. Peterson said that work had been in the scope of what needed to be done during earlier construction, but was left incomplete. Peterson said she confirmed that MCDC wasn’t billed previously for that construction.

Peterson has for months emphasized the need for a study of market destinations to recruit experienced operators with connections to distribution networks to ensure onions reach intended destinations. Last year the multinational company Americold dropped out of the project, stating in its letter that the project lacked financial viability.

The decision to release the funds is not something the Transportation Department takes “lightly,” Horner wrote. However, she noted that MCDC had met one of its three conditions for more money by submitting an updated business plan. That plan calculated that the reload center could operate profitably at a substantially lower volume than originally projected and that fees on shippers would repay loans needed to finish construction.

Horner noted that the state has made a “sizeable investment” in the project.

“That investment has potential value not only for the reload center but for other uses that could benefit the state and local businesses in the future,” Horner said.     


ODOT stalls explaining intentions over reload center as confusing accounts emerge

Top ODOT leader signals support to release more state money to get rail center moving

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