A groundbreaking ceremony for the rail shipping center north of Nyssa is planned Oct. 1 but construction won't begin until November. (The Enterprise/AUSTIN JOHNSON).

NYSSA – A lease between the county’s development company and Americold to operate the Treasure Valley Reload Center was inked last week, more than three months after a June deadline.

A groundbreaking ceremony for the publicly-owned rail shipping center is now scheduled for Friday, Oct. 1.

Construction on the rail shipping center appears to be delayed, though officials asserted there has been no pause.

Greg Smith, Malheur County economic development director and project manager for the shipping center reported to the state earlier this month that work was set to begin Sept. 13 but now construction is likely to commence by early November.

Brad Baird, president of Anderson Perry & Associates, the firm contracted to do engineering work on the project, said in an email to the Enterprise on Monday that “there isn’t a ‘new delay.’

“All is progressing as expected and in accordance with the contract documents,” Baird wrote.

Yet Baird told the development company board overseeing the project in June that “when we get to August we pretty much need to be going.”

Smith didn’t respond last week to phone messages or emails seeking comment. Last week’s scheduled meeting of the board of the Malheur County Development Corp., the public company overseeing the project, was canceled 20 minutes before it was to start.

The taxpayer-funded shipping center is designed to cut costs for onion shippers who now rely on trucking or unreliable rail service to move their product. The rail shipping center will function through a partnership between onion shippers, the county, Union Pacific Railroad and the national warehousing company Americold.

The development company in August awarded an $8.5 million contract for the initial construction work to Steve Lindley Contracting of Union.

Records show, though, the first phase of construction on the Treasure Valley Reload Center appears to cost nearly $3 million more than budgeted under the contract award. That shortfall could drain every dollar that Malheur County held in reserve for cost overruns on the project. County officials have yet to explain how they plan to cover the deficit, and public company board members said they haven’t seen a budget since February.

Lee Ricker, Steve Lindley Contracting owner, said last week he expects to begin work “around the first of November.”

“We will probably be moving equipment in before then,” said Ricker.

Ricker said he is waiting for the construction contract to share with his bonding agent for final approval.

“They are usually pretty quick,” he said.

Grant Kitamura, president of the Malheur County Development Corp., and Dan Joyce, Malheur County Judge, said they weren’t aware construction was delayed.

“I’m not worried about it. That’s normal procedure,” said Joyce.

Kitamura said he didn’t know how the delay will impact plans to ship onions from the facility by next harvest.

“I guess it depends on how fast they can build it. I don’t know how long any of this work takes,” said Kitamura.

Erik Havig, manager of the state Transportation Department’s planning section, said in an email last week that to the best of his knowledge construction had not started. He said he understood the development company didn’t want to start construction until a lease for the rail center had been signed by the operator, Americold.

The lease agreement with Americold provides for rent at a fraction of what is standard and a no-fault clause where Americold can abandon the project if finances don’t pencil out. The lease also provides that if the company operates in Nyssa for 20 years, it can get the multimillion-dollar project for $1.

Havig also said he believed construction was not planned to start until an agreement was signed with Union Pacific Railroad for construction of new rail. The development company paid Union Pacific about $2.6 million recently for that rail work.

News tip? Contact Pat Caldwell at [email protected]

Previous coverage:

Rail reload documents outline the private benefit from public dollars for economic development project

WATCHDOG: Nyssa rail center, public money, and a most unusual deal

WATCHDOG: County rail team told state key permits were in hand for reload center - they weren't

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