NYSSA, Ore. — Treasure Valley Reload Center construction is on hold until the Malheur County Development Corp. board fills a $5.5 million funding gap and finds a new operator.

Planned for years north of Nyssa, Ore., and primarily funded by the state, the center would move onions — a major crop in southeast Oregon and southwest Idaho — from trucks to trains headed east and south.

Overruns, delays

Cost overruns and construction delays hit the project over the past two-plus years. Inflation, a shortage of construction bidders and unexpected work needed on the site were among the factors.

Oregon Department of Transportation officials early this month paused further spending. Center operator Americold pulled out of the project in mid-July, citing construction delays and anticipated insufficient customer volumes.

The transportation department “has significant concerns about this project being completed and successfully operated,” Erik Havig, statewide policy and planning manager, said in an Aug. 8 letter to Ontario attorney Shawna Peterson, the board’s executive.

The development corporation needs to enter an agreement with an operator and develop a financing plan that guarantees construction will be completed, according to the letter.

‘Critical decision point’

“ODOT believes that until both these items are resolved, no additional funds from the Connect Oregon program or the legislative allocation should be expended,” Havig wrote. “We have reached a critical decision point for the project. We will need to see a clear ability to finish constructing the project and a proven facility operator locked in through an operator agreement to consider this a viable project.”

Peterson agrees with the transportation department’s approach in light of Americold’s decision, she said in emailing materials for the development corporation’s Aug. 15 board meeting.

“Our current focus must be on the update of the project plan, feasibility analysis, financial planning and firming up the operating plan,” she said in the email. “Our ongoing goal is to ensure this project can not only be built, but also operate successfully in the future,” with taxpayer money “appropriately and effectively stewarded.”

Nondisclosure agreements have been executed with two prospective operators, Peterson said at the meeting.

The center’s focus could be broadened beyond onions to include more commodities and to reduce one-way usage of rail cars, board members said.

The legislature approved funding based on the center shipping onions, “but I think there’s a wide potential of what can go through the facility,” particularly given growth of warehousing and distribution in the greater Boise area, said board member Kay Riley, a retired onion packer-shipper.

Potential operators likely are “excited about a lot of other potential things that could go through the center,” he said. “We should keep our eyes open.”

More Coverage

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Project funding 

The project cost was estimated at $41.5 million with Americold as operator. The development corporation has $36 million — a Connect Oregon grant of $26 million the legislature approved in 2017, $5 million from the legislature in 2023, $3 million from the legislature’s emergency board in 2022 and $2 million from the county.

The corporation as of Aug. 9 had spent about $29.1 million, Peterson told Capital Press. That includes about $10 million for unexpected wetland mitigation; about $5 million more than expected in ground work, labor and materials; and $14 million in rail, engineering, land and other costs such as buying the unassembled steel building. The building cost about $1.9 million.

The $5.5 million shortfall is based heavily on inflation and unforeseen issues with the soil, said Grant Kitamura, board president and Ontario onion packer-shipper.

And another operator “may not need the type of building Americold wanted,” he said. “We don’t know what another operator would want.”

“The viability is there,” Kitamura said. The Reload Center will provide “a needed service so we can compete on the East Coast” and significant savings compared to truck transport.