A Vale-based railroad is opposing plans for a new Nyssa shipping center, saying Malheur County officials “ignored” its approaches on how to do the project at less cost.

Oregon Eastern Railroad said in a letter to the Oregon Transportation Commission that “we would encourage the OTC to not proceed this project as proposed.”

The commission is scheduled to consider Thursday whether to approve Malheur County’s plan for the Treasure Valley Reload Center and release $26 million in state funding. The shipping center has been proposed to support the area’s onion industry.

Oregon Eastern, part of The Western Group of short line railroads, said in its June 12 letter to the commission that it “has more flexible criteria for new rail connections which would reduce track construction costs, engineering approval process, and time to construction.”

The letter was disclosed Tuesday by the state Transportation Department as part of a packet of material for commissioners on the Nyssa project.

DOCUMENT: Oregon Eastern Railroad letter

Bruce Carswell, railroad senior vice president, told the commission that taxpayer money set to be spent on the Nyssa project is “a large public capital expenditure without a justified business need for that particular location and doesn’t take advantage of existing rail infrastructure.”

Carswell also took issue with the manner used to choose the proposed Nyssa center.

“The property and site selection process were not transparent and appeared to favor predetermined outcomes,” wrote Carswell.

He said the railroad “is very supportive of economic development for this region and we agree with the merits and concept of the project,” he said.

Oregon Eastern runs a 23-mile route between Ontario and the EP Minerals plant west of Vale.

The railroad said it repeatedly contacted Malheur County economic development officials to be involved in the transload project.

“We were completely ignored,” Carswell wrote.

Greg Smith, Malheur County’s economic development director, didn’t respond to a voice message seeking comment. His project manager in Ontario, John Braese, said Tuesday that he was unaware of railroad’s letter.

“This is the first I’ve heard anything of it,” said Braese.

The Nyssa project is being managed by the Malheur County Development Corp., a public company set up by the county and none of its seven directors responded to questions regarding Carswell’s claims. Instead, some of them passed on the questions to Smith. The directors include Grant Kitamura, Jeremy Leathers, John Qualls, Kay Riley, Lynn Findley, Toni Parish and Corey Maag.

Carswell said the railroad submitted the letter out of frustration over its dealings with county economic development officials.

Oregon Eastern contacted Smith in July 2017 with concerns.

Carswell wrote that his firm “attempted several times to point out multiple possible properties connecting to OERR but was completely ignored by Malheur County EDC (economic development corporation).”

He also said “we did have some discussion with ODOT folks.”

“We had multiple dialogues with stakeholders. We voiced our concerns and opinions, but we don’t feel that they were properly considered,” said Carswell.

Carswell said the decision to build the facility north of Nyssa “caught us by complete surprise.”

“We tried to ask why they chose that site and we tried to voice our concerns as to why that site is problematic. We told them Ontario would be a better location, but we got no real interaction. Based on what the feedback was like, the decision was pretty much already made,” said Carswell.

Carswell also pointed out that Union Pacific rail service is more difficult at the Nyssa site than Ontario.

“UP has local train service for area customers in Ontario and daily interchange with OERR. Nyssa is currently outside those service limits and will require a new service point for UP,” Carswell wrote.

Oregon Eastern also addressed railcar service. The Nyssa project has been hampered by questions about refrigerated railcars.

The Vale railroad “hosts a refrigerated car repair facility that is already pre-staging empty cars on existing tracks for area customers during regular and peaking shipping season,” Carswell wrote. That repair plant is in Vale. The railroad employs five fulltime.

Carswell said in an interview Tuesday that now was the right moment for Oregon Eastern to publicly oppose the Nyssa facility.

“After having conversations with various folks and not getting anywhere and now with OTC going through final deliberations, we felt that it was appropriate to go on the record and voice our concerns,” said Carswell.

He told the Transportation Commission that a Nyssa plant could be a fatal blow for the Vale company.

“It is highly likely to cannibalize business opportunities from the rail line, endangering its continue survival along with the family wage jobs that it and its remaining customers supply to rural Oregon,” Carswell said.

On Tuesday, he amplified that concern in an interview.

“The challenge is that Oregon Eastern is a small railroad. The traffic would not be big enough to sustain two rail facilities,” said Carswell.

Adam Brown, Ontario city manager, said he was aware of the railroad’s concerns when officials worked to find a site for the reload facility.

“Oregon Eastern Railroad did approach the city during the decision-making process. I talked with OERR, and they referred to their spur line that goes over to Vale. I knew they wanted to be part of the project,” said Brown.

Kit Kamo, executive director of the Snake River Economic Development Alliance, said she is concerned the railroad may lose business if the Nyssa facility is built.

“We don’t want to lose anything we have, but with that said, a rail reload project for the onion growers is critical,” said Kamo.

Kamo said losing a business-like Oregon Eastern Railroad would be a blow.

“I would be disappointed if that happened because we really do depend on that short line. Once they’re gone you can’t get them back,” said Kamo.

Reporter Pat Caldwell: pat@malheurenterprise.com or 541-473-3377.

Reporter Kristine de Leon: news@malheurenterprise.com or 541-473-3377.

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