Business & economy, Local government

Malheur County Court will ponder paying off more rail reload debt

UPDATE: The Malheur County Court approved more rail depot funding in a unanimous vote on Wednesday, June 12.

VALE – Malheur County Commissioner Jim Mendiola says the county “is in a pickle” regarding whether to pay off more than $100,000 in debt piled up by the public corporation overseeing the Treasure Valley Reload Project.

“The more I think about it, the worse my temper gets,” he said.

Mendiola, along with Malheur County Judge Dan Joyce and Commissioner Ron Jacobs, will decide Wednesday, June 12, on the fate of bank borrowing for the Malheur County Development Corp.

MCDC was created by the county court in 2017 to oversee the reload center project but operates independently. The reload center is designed so onion producers can truck their produce to Nyssa for loading onto rail cars for shipment to markets in the Midwest or East.

The meeting is open to the public or can be accessed online at or by phone at 1-571-317-3129.

The county-backed credit line expired May 31.

The development company, which has no income, borrows money to pay bills that it then expects will be covered by state funding.

The county court can elect to either pay the remaining balance of $100,000 owed the Bank of Eastern Oregon or keep the loan in place for up to 60 days with a cap of $150,000.

If the court decides to pay off MCDC’s debt, it will be the second time it has stepped in to do so with county money. In 2023 the court used county money to pay a $1.3 million owed the bank by the development company.

Since then, the county has paid $27,672 in interest on new borrowing by MCDC. The current interest rate on the credit line is 4.75%.

In December 2022, the county directly funded another $2 million to cover construction costs as the project leaders ran out of money.

If the court elects to extend the line, the interest rate “should stay the same,” said Lorinda DuBois, Malheur County administrative officer.

Shawna Peterson, MCDC executive director, said the county should pay off the credit line.

“We just don’t need a credit line right now,” said Peterson.

Mendiola said he wants to “pay it and then cut the line off.”

Jacobs said he wasn’t sure yet what would be the best path forward on the credit line.

“We will have to see,” he said.

He said, though, he isn’t “real keen” about extending the credit line.

The county opened a $1.5 million credit line through the Bank of Eastern Oregon in 2019 to help cover costs incurred by the development corporation. The line was expanded to $3 million in 2021 and then to $4 million in 2023.

The line was used to pay expenses on the reload project, including, most recently, payments to construction contractors and a payout to the Froerer family for the construction of a new road near the planned facility, said Peterson. The credit line pay outs are reimbursed by the state Transportation Department but the agency last August cut off any more funding.

Recently, the Transportation Department agreed to free $100,000 to revive the beleaguered rail project, which has been in a holding pattern since last summer.

When the Transportation Department suspended more funding last fall, agency officials said they needed MCDC to prove moving ahead on the project was feasible. The state also wanted the corporation to develop a plan to raise $10 million to finish the rail facility and find an operator for the center.

The $100,000 will be used to pay for a study to clarify markets for onions and to finish rail work.

The rail center project began in 2017 but faced cost overruns and missed deadlines for more than six years. The center was originally scheduled to open in 2020. MCDC officials have no projection for when they expect the rail depot to start operating.

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

Previous coverage:

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

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

Consultant: Unclear business plan, incomplete design impede Nyssa rail center

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