County officials hoped a $15 million grant from the federal government would develop their business park next to a planned rail reload center. The county's application, though, was rejected. (The Enterprise/Pat Caldwell)

VALE – The phone call to Washington, D.C., in November wasn’t good news for Malheur County.

County officials already knew that they had been turned down for several million dollars needed to turn Nyssa-area farmland into an industrial park.

The official from the U.S. Department of Transportation explained weaknesses in the county’s bid for a $15 million grant. The merits of building out the industrial park weren’t evident, the official told county representatives on the Nov. 19 call.

But then the Transportation Department analyst delivered more sobering news.

The agency deemed as “unacceptable” the application submitted by the Malheur County Economic Development Department.

That is the lowest ranking given applications seeking federal grants to foster transportation projects.

On top of that, the county had erred in asking the federal agency for money to pay for utilities. That’s not allowed under terms of what’s referred to as the BUILD grant.

“Infrastructure of that nature is not fundable. We didn’t know that,” said Greg Smith, director of the Malheur County Economic Development Department, said in an interview last week.

His team spent nearly two years preparing the grant application.

Water and sewer lines are essential to lure industrial companies and are considered “imperative” for the development to happen, so the impact of that error is substantial.

It leaves Malheur County to start a new hunt for the $5 million.

Smith was on the call with county consultants but apparently didn’t share the full extent of what the county was told when later briefing county and state officials.

The day after the federal call, he issued his agency’s weekly report, emailed to citizens, business leaders and government officials. He made no mention of the $5 million problem. Subsequent reports in the following weeks didn’t either.

In its monthly report to the state on Dec. 2, the Economic Development Department mentioned the federal briefing – but said not a word about the $5 million issue.

“This meeting was extremely valuable as we learned of sectors within the grant that can be enhanced for future application,” the report said.

About a week later, Smith told Malheur County commissioners he was preparing to try again for the BUILD grant. But he didn’t tell them that the county couldn’t re-apply for the largest portion of the grant – the utilities.

In an interview last week, Malheur County Judge Dan Joyce said Smith has told him “nothing” recently about the utility issues for the industrial park.

The county bought a 290-acre parcel in 2019 for $3.1 million. To do so, county commissioners had to borrow $2.1 million from the state, making Malheur County taxpayers liable for the repayment.

One portion of the property will be used for the Treasure Valley Reload Center, the rail shipping center intended to cut costs for the area’s onion producers. The rest is for an industrial park the county wants to erect – but that dream has yet to be backed by money to make it happen.

County commissioners have said the county can’t afford the development costs.

Smith thought he had the answer – free federal money.

Over 23 months, Smith’s team charged the county $6,000 a month in part to prepare and submit paperwork to win the $15 million federal grant.

But last May, federal officials received such a weak request that they termed Malheur County’s bid “unacceptable.” The Enterprise reported last month that the application contained virtually no information about the industrial park, instead recycling old information about the reload center.

Smith conceded the flaws in remarks on Dec. 9 to the county commissioners.

“The criticism was that key elements were missed. I think it’s fair,” Smith said.

He added, “I accept all criticism that has come to me. I want to own that.”

News tip? Contact reporter Pat Caldwell at [email protected] or editor Les Zaitz at [email protected]

Previous coverage:

PUBLIC MONEY, PRIVATE EMPIRE: Greg Smith serves many public masters - for a price.

Malheur County's economic development director urged to stop attacks on local newspaper

State legislator's private company poised to get another $180,000 from Malheur County

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