Leaders of the Treasure Valley Reload Center are continuing to mull strategies to salvage its business plan for the project on the Nyssa property.
On Tuesday, Oct. 22, the Malheur County Development Corp., the public company overseeing the project, moved to contract with a California consulting firm to produce a report on the viability of turning the Nyssa property into a container shipping site.
This is the third consultant MCDC has turned to in recent months, seeking expertise to plot a course forward for the stalled project.
Shifting away from the long-held plan for the Nyssa operation comes after Mike Walker, an. MCDC board member, presented a report that said relying only on onion shipments as the core business at the rail center no longer makes sense.
Walker, an Adrian farmer, told the other board members that the Tioga Group had done work on the Mid-Willamette Valley Intermodal Center in Millersburg. The publicly-funded truck-to-rail transfer station was slated to ship hay and grass seed to ports in Seattle and Tacoma via rail.
Walker said the Tioga Group is known for its no-nonsense approach to reviewing projects.
He said the company told Oregon Department of Transportation officials that the Nyssa rail center would likely not work.
Walker also told the board that the Tioga Group told state officials in 2020 that numbers in a report on Millersburg by ECO Northwest of Portland, a consulting firm, were “garbage.”
Tioga is familiar with the Nyssa project, retained by ODOT to help provide an independent assessment of plans.
The company in 2019 raised several cautions about the Treasure Valley Reload Center in a report to the state.
“The onion market share estimates used as a basis for financial viability, and for estimates of public benefits, are overly optimistic,” Tioga said in 2019. “Tioga also believes that public and private project benefits may be similarly overstated.”
The company said that the high projections for shipments meant that “the specified building may be too large for near-term needs.”
The company recommended to the state that “volume estimates be revisited, financial plans allow for progressive volume growth, and a phased build-out be explored.”
Two years later, Tioga changed its assessment because Union Pacific and a multinational company appeared ready to join in the Nyssa project.
“Tioga is convinced that the Treasure Valley Reload Center can be designed and operated efficiently,” the company reported to state officials.
The company based its conclusion in part on representations from onion shippers that the reload center “will provide a distinct advantage for shipments” and would be “an invaluable resource for area shippers.”
In recent months, MCDC board members received reports that the expected volume of onion business would likely be only one-third as much as projected earlier. They have since considered scrapping plans for a major warehouse building and installing only a concrete loading pad.
Walker said Daniel Smith, the principal of the Tioga Group, was honest with him about the idea of shifting the focus of the Nyssa property into a cargo shipping center. Walker said Smith told him that Union Pacific might not support the idea. Walker said Smith would be willing to put in 12 hours of work to put together a preliminary report on what would need to be done to shift Nyssa to a cargo shipping facility.
Walker said he also met with representatives from Watco, a Boise company. That company moves commodities, primarily potatoes, fertilizer and fuels, according to its website.
He said Watco representatives recently visited the Nyssa property. He said they had positive things to say about the property size but had questions that he could not answer regarding capabilities to connect to the power grid.
The representatives told him that shipping farm products would provide less business than the rail center would need to be viable. Walker said they also told him that shipping food opens up safety concerns.
Watco suggested the board look into moving construction material and lumber coming from Canada and then to Boise. They told him the board would ultimately need an operator, marketing and sales department to go with that endeavor.
“They were extremely negative,” Walker said, “although they are not an intermodal company. They just have some doubts that Union Pacific would participate.”
The Tioga Group would have a presentation for MCDC by the end of October, according to a proposal from the California company.
The contract will cost $3,600.
According to Shawna Peterson, MCDC executive director, said the board is “swapping out” its contract with Commtrex and proceeding with an arrangement for consulting work by Loup Logistics, a Union Pacific subsidiary. She said contracting with the Tioga Group is an “obvious add on” and “yet another valuable expert weighing in.”
She said state ODOT would have to approve funding the contract with the Tioga Group. She said she would turn to county funding if the state didn’t agree.
News tip? Send your information to Steven Mitchell at [email protected].
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