Malheur County officials are selling off an unfinished rail depot and industrial park for a fraction of the public money poured into the eastern Oregon project.

Malheur County and its development arm, the Malheur County Development Corp., have agreed to take $10 million for a project that has cost the public an estimated $37 million.

Local officials cast the sale as a good deal.

“The public’s investment in Malheur County will be utilized, put to use and generate additional business opportunity and growth,” according to a statement from Dan Joyce, Malheur County judge, who chairs the county commission.

“Taxpayers routinely see investment in transportation infrastructure as a core responsibility of the state, akin to road and bridge improvements,” said Shawna Peterson, executive director of the development company.

The Treasure Valley Reload Center has been a money pit for years for the county and the state. Oregon legislators in 2017 gave millions to build the rail center primarily to help onion farmers reach markets quicker and at lower cost.

The buyer is a subsidiary of Jaguar Transportation Holdings, a Missouri company that operates short-line railroads across the country.

Jaguar will get miles of rail track on former farm ground just north of Nyssa and more than 200 acres of land the county envisioned as an industrial park. Still missing is the central building needed – the depot itself.

Officials from Jaguar didn’t respond to a request for comment about the company’s intentions for the unfinished depot. Public documents show Jaguar’s subsidiary is obligated to have the shipping center operating by the end of 2026.

The company operates a small spur line based in Vale, the Oregon Eastern Railroad.

Most of the money for the project came from a string of legislative appropriations through the Oregon Department of Transportation engineered over the years by Republican legislators. The bargain basement price for the reload center comes while Republican leaders demand more efficiency and accountability at the Transportation Department.

Legislators in 2017 allocated $26 million for the project, an effort pushed by then-state Rep. Cliff Bentz, a Republican who is now a U.S. representative. The project was put under the management of another legislator, state Rep. Greg Smith, R-Heppner. The county contracted with Smith’s private company to oversee the rail project.

To anchor the project, Malheur County officials in 2020 bought 290 acres of farmland, paying $1 million more than its appraised value. The land was acquired from an agriculture industry executive then sitting on the board of the county’s development company.

Another farmer warned at the time of trouble ahead for the project.

“The land you are purchasing, I am opposed to that lot for the simple reason the elevation between the main track and the land is unsuitable and it is a lot of money to make that land available for the railroad,” said Nyssa farmer Dirk DeBoer as quoted by the Malheur Enterprise.

He proved correct.

Smith orchestrated a ground breaking in 2021, but it soon became apparent the farmland was so waterlogged that millions had to be spent to make the ground usable for rail operations. Smith maintained his public optimism, saying in early 2022 that rail shipments would start later in the year. First, he said, project leaders needed to find another $9 million to cover climbing costs.

Then-state Sen. Lynn Findley, a Republican from Vale, also served on the county’s development company board. He didn’t share that information with colleagues on the state Emergency Board when he pitched putting more state money into the Nyssa project.

In September 2022, he advised legislators on the emergency budget committee that another $3 million would “finish the project.” Findley got the money but later had to contend with legislative furor when it came out that he had been advised a month earlier that project managers estimated three times as much money was needed to finish the Treasure Valley Reload Center.

Five months later, as financial troubles deepened in February 2023, Smith quit as project manager with just 11 days’ notice.

More bad news followed that summer.

Transportation Department officials, who had parceled out money year after year, slapped closed the state checkbook. They said no more funds would be advanced until project managers figured out how to finance the remaining construction and recruited a new company to operate the shipping depot.

Along the way, Malheur County itself continued to pour money into the project. It covered the operating costs for its development arm, including the monthly contract for the executive director. County commissioners put $1.9 million into the construction pot. Meantime, its industrial park remained an image on a marketing billboard. The land not used for the rail center was rented out for crops – to the farmer who had sold the land in the first place.

In late 2024, project managers agreed to consider selling the reload center to Jaguar.

Under terms disclosed last week, Jaguar will pay $10 million for both the reload center and the county’s unused industrial land. The company is paying $1.1 million upfront, making annual payments on the balance over 10 years.

The county’s development company will largely go into mothballs, with a new board appointed to meet on occasion.

And Malheur County stands to collect the $10 million plus another $1.5 million retained by the state over the years as a tool to ensure the project was finished.

Transportation Department officials say the state won’t share in the proceeds. They said that $3.4 million the agency is holding from a 2023 legislative allocation for the project will go back to the treasury.

“The investment was placed in Malheur County to develop a reload facility and that is what the taxpayers are getting, along with the development of an industrial park,” Joyce said. “This sale is not only tied to money but also Jaguar’s performance – build a facility, ship onions, develop a park.”

Contact Editor Les Zaitz: [email protected]

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