SALEM — After three hours of testimony Thursday afternoon before the Oregon Transportation Commission, a proposal to build an intermodal transloading facility near Millersburg appeared to hold an advantage over a similar project proposed near Brooks.
But commission members want to ensure that their questions have been answered adequately before deciding whether to invest $25 million in one of the projects. (Also on the table is a similar project in the eastern Oregon community of Nyssa, with a $26 million price tag.)
As consultant Dan Smith of the Tioga Group noted, the Millersburg project “is a few yards ahead in what could be a very long race.” Smith and Frank Harder represented the Tioga Group, which provided consulting services to the commission about all three projects. The group has more than 40 years of experience in trucking, shipping and rail issues.
Tony Hyde, chairman of the Dedicated Projects Final Review Committee, said that a month ago the group selected the Millersburg project with the caveat that if sponsors couldn't answer questions about its economic viability, no mid-valley project should be selected. That committee forwarded its recommendations to the commission.
In a letter to the commissioners, Hyde said the Final Review Committee “opted not to support the Brooks site if for some reason the Millersburg project was not able to proceed. The rationale primarily was due to the fact that Brooks is so close to Portland and that if for some reason the Millersburg management team was unable to meet the conditions above, they believed Brooks would not be able to either.”
Business Oregon director Chris Harder said all three proposed projects share some common concerns, including operational liquidity, interim funding, the need for signed commitments from railroads and ocean carriers, land commitments and public agency support.
“All of the projects are technically and operationally feasible,” Smith said. “Their success or failure will ultimately be determined by the agreements they make with railroads and other parties such as ocean carriers and operators.”
Tioga Group believes both mid-valley projects will need to provide customers with prices below what they're currently paying to attract business, and, they added, trucking companies will likely cut their rates to remain competitive.
The Millersburg site design plan will need refinement, and the economic forecast will need more solid numbers upon which a decision can be made, they noted. But, they added, the site has an outstanding location for a project of this type.
The 190-acre property is zoned industrial, has excellent access to Interstate 5, has the ability to use the Union Pacific line and will provide services to a broad range of companies all the way south to the Klamath basin and the Port of Coos Bay, they said.
At the site, freight could be brought in by truck or rail then reloaded onto other trucks or railcars for shipment to its final destination. It could also serve as a transfer point for intermodal shipping containers, which can switch seamlessly between truck, rail and ship transportation.
Commissioner Roger Nyquist said Linn County is “all-in” on the project and has provided $600,000 toward it. The county has also committed up to $250,000 per year for 10 years to backfill any budget issues.
Karla Chambers, co-owner of Stahlbush Island Farms, said her family has farmed in Oregon for 135 years. Stahlbush Island Farms ships products nationwide and to 26 countries. Trucks haul containers to Tacoma, but locating the intermodal facility in Millersburg would reduce costs significantly.
“Currently, one truck can haul a single container to Tacoma in a day,” she said. “We could get four loads per day at Millersburg. We would reduce our road miles by 26 times when we talk about 1,000 containers.”
Chambers said Oregon’s population will grow markedly over the next 30 to 40 years. She said Portland’s road capacity has not increased, and the Salem and Brooks area will expand with more businesses, homes and traffic.
“The Millersburg site provides a great opportunity now and in the future for agriculture, high tech and forest products,” she said.
Commissioners were concerned about possible contamination at the industrial site, but Greg Smith, a spokesman for the Linn Economic Development Group, said he's been working with the Department of Environmental Quality.
“We completed a Phase I study and there was no recommendation for Phase II,” he said.
He added that there's a secure agreement for the purchase of the property once the state has committed to the project. A 60,000-square-foot building is already onsite. The project will be paid for, and there won't be any debt to service. Companies already want to lease space on the site.
Officials from the Union Pacific Railroad said it will take about 12 months to develop adequate rail service at the Millersburg site, but it’s difficult to project economic factors until shippers commit. And they likely won’t do that until the project has been approved and contracts signed.
The Millersburg project also received support from Phill Lindgren of the Oregon Seed Association; Millersburg Mayor Jim Lepin; Janet Steele, president of the Albany Area Chamber of Commerce; Junction City businessman John Neal; Gary Weaver of Weaver Seed in Scio; and Linn Economic Development Group members Darrin Lane and Floyd Collins, a former Albany city councilman.
Lepin said additional land adjacent to the International Paper property can be developed. He said the community lost more than $523,000 per year in taxes after International Paper folded.
“We have 400 acres of land that is zoned industrial that is ready to go,” Lepin said. “We don’t need to take out any prime farmland.”
Steele said the Albany chamber represents more than 530 businesses and there is “overwhelming support” for the Millersburg project.
Numerous supporters of the Brooks Port of Willamette project were also present at the hearing, led by Salem attorney Kevin Mannix. Many wore large buttons reading “Brooks Booster.”
Mannix said Tioga Group’s assumption that an interload facility will only pencil out economically for long-hauls — more than 400 miles — is based on a Class I railroad.
“Short-line railroads operate differently,” he said.
Mannix said Brooks is working with the Cordele Intermodal Services, which operates similar projects in Georgia and Florida.
He also said the common term used by everyone who has evaluated the Brooks project is that it is “visionary.”
He said the project’s design is complete, and a strong relationship exists with the Portland and Western Railroad. Their project, he added, would provide increased services to shippers in Marion, Polk, Clackamas and Yamhill counties.
Jonathan Lafevers, president of Cordele Intermodal Services, said the Brooks site was “shovel-ready.”
Several people spoke in favor of the Brooks project, including Brodie Harvey of Knife River; Greg Gilmore of Norpac, a 240-member agricultural cooperative; and Keizer Mayor Cathy Clark.
The Oregon Transportation Commission will consider comments made Thursday and determine if further questions are necessary for the project sponsors. The group’s next meeting is set for March 21.