State officials said they won’t seek to recover the millions of public money pumped into the unfinished Treasure Valley Reload Center should the project sell to a national railroad company.
The Malheur County Development Corp., the public company established by the county to oversee the Nyssa rail project, is negotiating a sale of the reload center project and the county’s undeveloped industrial park to Jaguar Transportation Holdings, a Missouri company.
The company has until June to close a deal under an agreement with MCDC.
Tim Enayati, senior vice president of commercial development with Jaguar, said the company is going through the “standard diligence process” that the company takes with anything it acquires. He declined further comment.
Jaguar Transport, founded in 2018 and operated by a father-son team out of Joplin, Missouri, owns the Vale-based Oregon Eastern. It established its Vale reload center in 2022 and primarily ships lumber.
Erik Havig, program manager with the Oregon Department of Transportation, said the agency would not expect to receive any money paid by Jaguar.
The project, funded by state lawmakers in 2017, has taken over $30 million in public funds and is far from complete. Currently, the state holds another $8 million set aside for finishing the reload center.
Shawna Peterson, MCDC executive director, said that the plan now is for the county’s development company to dissolve if the sale goes through.
She said money from a sale would be used to reimburse Malheur County and would not stay with MCDC. She didn’t address where a potential surplus of several million dollars would then go.
The public project is about two miles north of Nyssa, west of the Union Pacific Railroad line serving Nyssa. Dubbed the Arcadia Industrial Park, the bare land with no services was the foundation for the Treasure Valley Reload Center and an adjacent industrial park. MCDC now owns 65 acres while Malheur County owns the remaining 230 acres.
Peterson said Malheur County over the years has invested in acquiring the property, funding the construction of the tracks, and supplementing the development company’s activities. The county also has MCDC’s operations for years that now covers Peterson’s services.
She said the county would be reimbursed for those costs, but no figure was readily available.
The county paid $3,424,550 for the industrial park in 2020. It used a $2.4 million loan from Business Oregon, the state economic development agency, and pulled $969,900 from the county’s contingency, or rainy day, fund to make the buy. The park was never developed. Much of it remains used for farming.
Havig said he has yet to see a formal proposal for a deal. He said the state’s original expectation of MCDC still stands: creating a rail center so shippers can use rail.
What remains unclear is how Jaguar would operate the Nyssa rail center. Havig said attorneys with the Oregon Department of Justice are working on the “best options” to ensure the conditions of the original grant are passed on to Jaguar.
Peterson said MCDC’s agreement with Union Pacific Railroad requires completion of rail spurs at the site, but not much remains.
The fate of a steel warehouse building is uncertain. A pad has been formed for the building, but the steel kit remains in pieces on the ground. MCDC has been considering selling the parts.
The potential sale of the Treasure Valley Reload Center to Jaguar Transportation Holdings would end a decade of work at public expense to turn farmland outside of Nyssa into an industrial complex.
The rail center project began in 2017. Funded by the Legislature, the project originally budgeted for $26 million ran far over budget under the management until 2023 of Greg Smith, a Heppner consultant who is a Republican legislator.
So far, $30 million in public funds have gone into the project and the figure doesn’t count most of Malheur County’s subsidies. Marred by missed deadlines and cost overruns, the Nyssa rail center was initially scheduled to open in 2020.
In 2023, the state transportation agency turned off funding.
Transportation Department officials said no money would flow again until MCDC contracted with a new operator to run the business and delivered a financing plan to cover an estimated $10 million in remaining costs.
Over the last year, project leaders, with the help of consultants, decided that the plan to truck onions to Nyssa to put on rail cars wouldn’t be feasible.
They have considered switching to an intermodal operation to instead ship cargo containers on flatbed rail cars.
In recent months, project leaders have stopped discussing when the reload center will be open for business.
Jaguar Transport, founded in 2018 and operated by a father-son team out of Joplin, Missouri, owns the Vale-based Oregon Eastern. It established its Vale reload center in 2022 and primarily ships lumber.
PREVIOUS COVERAGE
Railroad company considers buying Treasure Valley Reload Center, county industrial park
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