Malheur County officials said they don’t know who will share in the millions of dollars expected from the sale of the unfinished Treasure Valley Reload Center and undeveloped industrial property to a national railroad company.
During a special meeting on Monday, April 21, the Malheur County Development Corp Board signed off on more spending to finish constructing track spurs at the rail center. That’s a condition for a sale originally scheduled for late June of the Nyssa rail center and industrial park to Jaguar Transportation Holdings, a Missouri company.
County officials and Jaguar have declined to disclose what would be paid for the properties. Some $30 million in public funds already has been spent on the rail center and the county has spent thousands more to buy and hold adjacent industrial land.
Jaguar is likely to pay millions if it goes ahead with the deal. The company and MCDC have been in talks since late last year.
Now, two key conditions of the sale are likely to change. The Malheur County Court was expected to consider on Wednesday, April 30, a contract change that also will have to be approved by the MCDC Board.
One change is pushing out the sale date by two months, with the deal now proposed to close by Aug. 31.
A second change is that the nonrefundable deposit of $100,000 paid by Jaguar would now become refundable. The money would have to be given back if the rail work isn’t completed or if Jaguar can’t reach its own service arrangement with Union Pacific Railroad.
Despite the expectation of a sale, officials say they haven’t figured out where the money would go.
“Conversations are ongoing,” according to Shawna Peterson, MCDC executive director.
She said “it is unlikely that MCDC will end up with any money at all” and that “ODOT won’t get paid back.”
Malheur County Commissioner Ron Jacobs, the liaison to the project, said there is no plan yet for the money.
“We don’t know who’s going to get what,” Jacobs said.
Peterson said some would be used to reimburse Malheur County and Business Oregon, the state’s economic development agency. The county is owed over $1.4 million for advances to the development company, and the state is owed about $2.4 million that it loaned to buy the property.
The distribution of any sale proceeds then would be decided in “in various forums” held by MCDC and the Malheur County Court, she said.
For now, MCDC is focused on finishing rail spurs. Work stopped when the project ran short of money and the state Transportation Department blocked disbursements. State officials said they would consider letting money flow again if the development company had a new operator to run the facility and it could show there was demand for the depot.
Peterson said contractors were ready to finish the work by the time MCDC is expected to close the sale to Jaguar, now expected in June.
But that rail work leaves the depot with a warehouse building still sitting in pieces on the ground and no street.
The fate of the development company itself is unclear.
In January, Peterson said the company would dissolve if the sale to Jaguar went through.
At the more recent meeting, Peterson said MCDC would be “replaced” in the contract with the state to complete and operate the rail center. Peterson said a sale means “someone taking the torch and delivering on the promise” but she didn’t specify who that would be.
State officials say that’s not their expectation.
Erik Havig, the agency’s policy and planning manager noted that the state has an agreement that the county’s development company would complete and operate a rail center for 20 years.
“The state does not intend to enter into a deal with Jaguar,” he said.
The state will continue to “enforce our agreement with MCDC,” he said. “How those expectations are communicated and documented between MCDC and JTH is up to MCDC.”
News tip? Send your information to Steven Mitchell at [email protected].
BUY QUALITY – SUBSCRIBE – The Malheur Enterprise delivers quality local journalism – fair and accurate. We depend on support through subscriptions to deliver our reports. You can read it any hour, any day with a digital subscription. Read it on your phone, your Tablet, your home computer. Click subscribe – $7.50 a month.
