County leaders recently signed a letter of commitment, seen as a key step to pave the way for construction of a rail reload facility north of Nyssa. (The Enterprise/file)

VALE – The Malheur County Court signed off on a key document last week that officials say will pave the way for the release of funds to begin construction on a rail reload facility north of Nyssa.

Dan Joyce, Malheur County judge, endorsed a two-page Letter of Commitment which outlines six, non-binding guidelines the county, a coalition of local onion shippers and Americold Logistics will adhere to regarding the rail facility.

The letter is the key step needed for the state to release construction funds for the project.

The Oregon Transportation Commission is scheduled to decide on the construction at its meeting scheduled for Thursday, Jan. 21.

The letter marks a significant change from earlier requirements from the state. Initially the state required that the county ink a pact with an operator to run the facility before releasing construction dollars.

 “It didn’t appear we would get the full, signed (operator) agreement in time to go to the commission so we asked them to put down on paper who is responsible for what so we have the framework so I can at least take that to the commission,” said Erik Havig, state Transportation Department policy and planning manager.

While the letter is not legally binding, it may be enough for state officials, said Grant Kitamura, chair of the Malheur County Development Corp.

“The letter is sufficient for ODOT to approve some funds to be released for construction. That is my understanding,” said Kitamura.

Brad Baird, president of Anderson Perry & Associates, the firm contracted to engineer the project, said last week if, and when, the state releases the construction money bids could go out in February.

“The bidding could occur in late February, early March and construction could occur three weeks to four weeks after that,” said Baird during a Jan. 12 meeting of the board of the Malheur County Development Corp.

 Baird said the initial stages of the construction would involve “all the earthwork, drainage, earthwork for rail and getting everything up and ready for rock.”

The signing of an agreement with Americold to run the reload center for 20 years still hasn’t been set. The Georgia-based company is negotiating to buy the reload center under terms that haven’t been publicly disclosed.

Kitamura said an operator agreement between Americold and the county could possibly be inked “within a couple of months,” but there is not guarantee.

“It is one step at a time,” he said.

Kitamura said officials are working on a “general formula, I am assuming” of an operator agreement.

Any pact between the county and onions shippers and Americold Logistics LLC would be based on fuel prices, rail rates and other factors.

“It is kind of open ended,” he said.

That’s because, he said, four separate entities will be involved at some point in pieces of an operator agreement and such items as shipping rates and fuel prices can’t be “locked in” now.

“Americold will come up with what they are responsible for, we will come up with what we are responsible for and what the railroad is responsible for. That will constitute an operator agreement,” said Kitamura.

Another key factor to release state money for the project was the completion of an independent appraisal, which was finished in October.

 The review, conducted by Jess Payne Appraisal Service of Idaho, evaluated 54 acres reserved for the center and concluded it was now worth $830,000.

The state allotted about $600,000 for land as part of the $26 million rail reload venture. The 54 acres, though, was already purchased by the county earlier this year as part of a 290-parcel of land. The county borrowed $2.1 million from the state and dipped into its contingency fund to buy the entire parcel. The acreage not destined for the Treasure Valley Reload Center will be used for the Malheur County Industrial Park.

The county will use the money it gets from the state for the land to repay part of the mortgage. That transaction couldn’t happen until the separate appraisal was finished.

The county paid about $10,000 an acre for the Farmer parcel and the appraisal reviewing the land as farm ground set the value at $2.050 million last year. The new appraisal concluded the 54 acres was worth $12,000 an acre because the property is zoned for industrial use, but noted that about nine acres of wetland held had no value.

News tip? Contact reporter Pat Caldwell at [email protected]

Previous coverage:

Nyssa rail center gets two thumbs up as construction start looms

Tracking the Treasure Valley Reload Center: Key data eludes county, stalls rail project

Rail project leaps over another hurdle with completion of appraisal

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

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