A year after opening, $35 million Millersburg intermodal center hasn't shipped anything

Six dignitaries including then-Gov. Kate Brown grasped the oversized scissors to cut the ceremonial ribbon to signify the grand opening of the Mid-Willamette Valley’s Intermodal Center in Millersburg on a chilly day in December 2022.

It had taken more than three years and cost about $35 million of taxpayer money to transform the former International Paper mill site along the west side of Interstate 5 to take containers off trucks and put them on rail cars destined for ships in ports such as Seattle and Tacoma.

A year later, the facility has yet to ship a single container.

ConGlobal, the company that was contracted to operate the facility, recently pulled out saying it could not find any business.

“There’s been no containers that have left that facility,” said Roger Nyquist, a Linn County commissioner and board member of the intermodal center.

It is estimated that about 40,000 containers are shipped annually out of a 20-mile radius of Millersburg. But those are trucked past the Mid-Willamette Intermodal Center to another facility somewhere like Portland or taken directly to ports in Washington to go overseas.

Was report on intermodal center prescient?

The Oregon Transportation Commission was tasked with deciding whether to spend $24 million in state funds on the Millersburg site or one in Brooks.

The commission was on the verge of making a decision in 2019 when the Tioga Group – a freight transportation consulting company – submitted a report stating neither of the proposals were viable.

The Tioga report said operators’ lack of agreements with international carriers made either location unlikely to be successful. To thrive, an intermodal center would need to be subsidized by freight carriers to compete with existing companies.

“One of the things that tripped me up a little bit about the Tioga report, they said this won’t work unless the steamship lines will provide subsidies, and I’m like, ‘What’s a subsidy?’” Nyquist said.

“You’re pricing this thing at whatever it’s at. At the end of the day, you’re going to price it at what you can make money at. The pricing and the commitments and who’s getting a good deal is quite elusive.”

OTC delayed choosing a location, but ultimately decided to fund the Millersburg proposal.

The intent of the intermodal center was to help area farmers ship products like grass seed and hay overseas.

Mid-Willamette Valley Intermodal Center CEO Don Waddell said imports into the United States have slowed since the center was approved and that has meant there are fewer empty containers to export goods.

Waddell said ocean carriers, railroads, terminal operators and trucking companies recently have emphasized retaining existing business. For a start-up like the intermodal center, that’s not good.

“We are not happy with how things have gone thus far, but we are determined to put this property to productive use as soon as possible,” Waddell told the Statesman Journal in an email.

Intermodal center operator backs out after failing to attract business

When Millersburg was selected as the intermodal site in 2019, the nonprofit group behind the proposal intended to have Northwest Container Services operate it.

An agreement was never reached and Illinois-based ConGlobal was contracted to operate it.

“Our team of experts at ConGlobal has enjoyed working with the team that planned, designed and built the Mid-Willamette Valley Intermodal Center,” ConGlobal CEO Brandt Ring said in a press release after the grand opening.

When the center officially opened in November 2022, the site was still missing what has become its most recognizable equipment: a giant orange crane that spans the railroad tracks and is designed to move multi-ton metal containers between trucks and rail cars.

The crane was installed in March 2023.

Nyquist said after no containers had been shipped in the first 10 months of operation, the intermodal center and ConGlobal began negotiations to end the contract. It was terminated in late December.

ConGlobal did not respond to requests seeking comment for this story.

“At the end of 2023, the MVIC and ConGlobal officially agreed to terminate its operating agreement due to the lack of business at the facility,” Waddell said.

The property tax bill for the property was $103,216.72 in 2023. Waddell said ConGlobal paid some of the year’s taxes on the property, though he did not say how much, and MVIC paid the rest.

Nyquist said MVIC is “in talks” with other potential operators, but didn't name them.

There is talk, he said, of forming a consortium of agricultural exporters. But that could be a ways off.

Where the money for the Mid-Willamette Intermodal Center came from

The Oregon Legislature in 2017 passed a 4 cent per gallon gas tax to fund $5.3 billion in transportation improvements such as building and maintaining roads and bridges.

Of that, about $50 million was earmarked for intermodal facilities in the Willamette Valley and in Eastern Oregon.

The Millersburg site received nearly half of the funds, at $23.8 million. Nyssa was selected for the Eastern Oregon site and construction is not yet completed.

Linn County officials had long sought to redevelop the former International Paper mill site in Millersburg which had closed in 2009. All but one building on the site had been cleared and it sat vacant for a decade.

In 2019, Linn County purchased the 192 acre site for $10 million, then sold 63.7 acres to the Linn Economic Development Group to develop the intermodal facility.

Linn County allocated $10 million in American Rescue Plan Act funds to the original $23.8 million to build thousands of feet of railroad track and paved roads.

The county also kicked in about $2 million more in lottery funds earmarked for economic development and has committed up to $500,000 a year for another four years, according to county spokesperson Alex Paul.

The Oregon Department of Transportation oversaw the original state funds for the facility, but the state has no more oversight on the project.

“So far, the owners have met the requirements of the agreement for getting those funds, and I can say that we (ODOT) are hopeful that they will be successful going forward,” ODOT spokesperson Shelley Snow said.

Waddell said the intermodal center has two contracted employees – he and a site custodian – who are paid from remaining money to develop business and maintain the property.

Will the Mid-Willamette Intermodal Center ever be used?

The original proposals for the intermodal center projected it would be profitable in its first year and earn more than $200,000.

“We’d like to be running 200 containers a day out of the facility. It’s just not going to happen,” Nyquist said.

Nyquist said he remains optimistic about the potential for the site.

All of the infrastructure and equipment is there for it to start operating.

And from the county’s perspective, the intermodal project was part of a bigger project of buying the former International Paper site and developing it.

“Even though the site is not currently being used, it is in an improved state of readiness, compared to what it was after the announced closure of the former paper mill in 2009,” Millersburg Mayor Scott Cowan said.

Aymium, formerly National Carbon Technologies, is leasing 33 acres on the site and reportedly is planning to invest $234 million there, but has yet to start building.

Nyquist said the group also is in negotiations with two other companies that are considering the site.

“We’re still pretty enthused about the positive impact on employment and taxes, but the intermodal is a rough spot in all of that right now that’s just going to have to work itself out,” he said.

Bill Poehler covers Marion and Polk County for the Statesman Journal. Contact him at bpoehler@StatesmanJournal.com

This article originally appeared on Salem Statesman Journal: $35M Millersburg, Oregon shipping center hasn't shipped anything