Intermodal facility in Brooks would impact agricultural industry in Willamette Valley

Bill Poehler | Statesman Journal

Show Caption Hide Caption Proposed intermodal freight transport facility in Brooks A group called Oregon Port of Willamette is in a bid process for a $25 million grant to build an intermodal freight transport facility in Brooks.

Over the past 100 years, Bill Smith’s family has been farming the land near St. Paul in the North Willamette Valley.

Dozens of factors can impact his farm’s profitability.

When Portland’s Terminal 6 shut down in 2016, Smith and his family felt the impact directly as it cost more money to ship the crops they produce including straw, hay, grass seed, peppermint and hazelnuts.

More: Oregon air quality: Wildfire smoke returns to Salem, leads to "unhealthy" air

Oregon’s agricultural industry, which generates $5.7 billion each year and is tied to over 200,000 jobs, relies heavily on the ability to ship goods out of the state.

In the Willamette Valley, 38,000 containers of commodities were shipped out of Oregon in 2016 including straw, hay, pulp, lumber, potatoes, seeds, grains, Christmas Trees and nursery stock.

To get most of those goods to shipping ports, the crops are loaded into containers and those containers are trucked to a port in Seattle or Tacoma.

A group of businessmen led by Kevin Mannix have formed Oregon Port of Willamette and is in a competitive bid process against a group in Millersburg for a $25 million grant to build an intermodal freight transport facility in Brooks.

More: Two Views: Will draining Detroit Lake harm or hurt human, fish populations

Intermodal freight transport operations are areas where containers are taken from trucks and craned on to rail cars or from rail cars to trucks.

"It’s not only a cheaper way to get our containers … to a port, steamship port, but also, if you could just get some of the traffic off the road it would help everyone,” said Smith, a long-time director at the St. Paul Rodeo.

A farm like Smith’s 900-acre operation in St. Paul will ship 60 containers a month of goods and make twice as many trips for trucks through Portland to get them on ships.

The option of hauling the containers to Brooks – or Millersburg – would directly impact Smith in terms of man-hours and in profit.

But they’re not the only ones who could profit from such an operation.

“In terms of the typical farmer in the Willamette Valley, they would benefit from having a place that they can truck their containers to, put them on rail to their ultimate destinations,” said Mannix, a lawyer and former state lawmaker.

“In the Salem area, there are businesses that import. You have Lowe’s, you have Home Depot, you have Target, Amazon, WinCo, all of these businesses, we’ll be talking about what they need to bring in.”

Impact of Terminal 6 shutting down

At its peak in 2003, Portland Terminal 6 was a major container shipper in the West Coast with agricultural goods from Oregon and Washington being shipped to European and Asian markets.

Ships carried the equivalent of over 175,000 20-foot containers of goods fromTerminal 6 each year.

But Portland is at a disadvantage to other ports. It is inland – about 100 miles up the Columbia River – from the Pacific Ocean.

“The container business is tough because they can’t bring the biggest, the maxi container ships, to Portland because the rivers aren’t deep enough and then they have to bring in smaller boats,” Smith said.

Repeated labor disputes – combined with the Columbia River not being deep enough to bring in larger container ships – choked the volume of container ships to under 2,000 by 2015.

Terminal 6 closed in 2016 and agricultural producers in the Willamette Valley were forced to truck their containersto Seattle or Tacoma.

“You have already probably noticed that there is huge congestion with traffic,” said Steve Rippeteau, a Brooks resident and former railroad employee.

More: Black man assaulted after Confederate flag dispute at country festival

“Oregon is way behind the curve on their transportation infrastructure.”

Terminal 6 reopened on a smaller scale in January, but most ships that come have a maximum of 150 containers; the world’s largest can carry over 20,000.

For many exporters, it is more cost effective to ship from ports in Oakland, Long Beach and Los Angeles.

ECONorthwest Report

After Terminal 6 closed in 2016, the Oregon Legislature was concerned about the lack of shipping options for producers in the Willamette Valley.

Business Oregon commissioned ECONorthwest to study the feasibility of an intermodal transfer facility in the Willamette Valley.

The report said 38,170 40-foot containers from the Willamette Valley, Oregon Coast and Southern Oregon are shipped out of the ports of Seattle and Tacoma each year.

The study said it costs on average $1,000 to ship a container out of Portland; it's $600 to ship from Seattle or Tacoma.

More: Terwilliger Fire grows to 125 acres, closes hot springs, campgrounds east of Eugene

The containers are generally owned by the ocean shipping companies. To use them, the farmers drive their trucks to Tacoma or Seattle to pick them up, bring them back to the farm, fill them and drive them back to the port.

ECONorthwest’s report said an intermodal transfer yard could be created on a piece of land as small as 14 acres.

The report said a facility would have to handle over 17,000 containers per year if it charges $50 per container to break even.

“We’re finding there’s a lot more that can be done as you start talking to businesses confidentially: ‘Hey, if we have this facility, what can be done with this?’” Mannix said.

Keep Oregon Moving (HB 2017)

In 2017, the Oregon Legislature approved a massive $5.3 billion transportation package.

Among the goals are to maintain roads and bridges, improve public transportation, provide safe biking and walking options, reducing congestion and moving freight.

One of the solutions to accomplish the latter two was to create new intermodal rail facilities to shift freight from trucks to trains with the goal of making room on freeways.

To that end, $26 million was set aside as a grant to fund an intermodal facility in Treasure Valley and $25 million for an intermodal facility in the Mid-Willamette Valley.

The money for the intermodal facility comes from lottery dollars earmarked for economic development.

More: Union Street Railroad Bridge turns orange, reminds travelers to watch for road workers

“Oregon Department of Transportation set up a competitive process for proposals to be presented,” Mannix said.

For the Mid-Willamette facility, five applicants created proposals: Millersburg, Lebanon, Brooks, Portland and Eugene.

In February, ODOT narrowed the choices to Millersburg and Brooks. Both have until Sept. 27 to turn in their next proposals.

Shelley Snow, a spokesperson for ODOT, said the department will review the proposals, send them to Business Oregon for review, then an independent third party will review them.

“And the Transportation Commission, composed of five people appointed by the governor, is ultimately in charge of this,” Mannix said.

Oregon Port of Willamette

Mannix wasn’t looking to get involved in the intermodal transfer business.

A business lawyer, he met with a few farmer clients in 2016 about another problem, but the farmers told him about the pressing issue of shipping.

From that Mannix started Oregon Shipping Group as an advocacy organization to support revitalization and development of shipping systems in the state. Oregon Shipping Group receives support from groups all over Oregon that are impacted by shipping.

Oregon Shipping Group advocated for the Keep Oregon Moving bill and worked with the group from Lebanon on its intermodal proposal.

“In that process, we identified Brooks as another potential site,” Mannix said.

“For Brooks, we created the Oregon Port of Willamette Limited Liability Company. Our shipping group is a facilitator, but it’s the Oregon Port of Willamette LLC that is the formal proponent of the Brooks project..”

More: For-profit firefighters find work in at-risk Oregon county

Oregon Port of Willamette is made up of managing member Frank Salerno, Mannix as the executive director and Connor Harrington – an attorney at Mannix’s firm – as Deputy Director.

Brooks is unique in that it has two rail lines within one mile of the interchange with Interstate 5; the Oregon Port of Willamette proposal includes two sites in Brooks.

The first site would be west of Interstate 5 on 19 acres north of Antique Powerland on the Portland and Western Railroad line.

The second site is east of I-5 on the Union Pacific line on land currently owned by NORPAC and currently used for irrigation.

The Millersburg site has gotten most of the attention so far.

The former International Paper mill alongside Interstate 5 is being proposed as a site by Linn Economic Development Group.

The proposed Millersburg site has 190 acres of industrially zoned land and is near another 135 acres of industrially zoned land owned by the City of Millersburg.

Companies potentially importing to Brooks

Major corporations have distribution centers within a 30-mile radius of Brooks such as Home Depot, WinCo and Amazon and potentially could use the service to import goods.

At Port of Tucson in Arizona (an intermodal transfer facility) Amazon built a fulfillment center.

“Those discussions have taken place, but I would say the exporters have shown much more interest,” Harrington said. “The exporters are by and large the agricultural shippers and that’s one of the main focuses — we want to help the exporters.”

The ECONorthwest report showed nearly 9,000 containers of goods were shipped into the Mid-Willamette Valley in 2014.

Mannix said the largest need for businesses in Oregon is exporting goods.

“We are a net export state,” Mannix said. “We export 60 units for every 40 units that we import. There is a need for us to have a continuing operation where we have containers coming in and where we can get some containers from elsewhere.”

How would it impact Brooks?

Brooks is an unincorporated community in Marion County north of Salem with a population of about 400 people.

For a couple weekends every summer, thousands of people descend on the town for the Steam-Up at Antique Powerland and in the past few decades businesses have sprouted up alongside the interchange such as Pilot Travel Center and May Trucking Company.

More: To heal from latest priest sex abuse revelations, Catholic Church will need secular help

But the town has no public school – the elementary school closed a couple years ago and its students go to school in Gervais – and needs infrastructure improvements.

“We intend to be a lead player in the Brooks community and we intend to lead the proper development of an area that’s going to develop,” Mannix said. “It already has developed without a community sense.

“Brooks needs a wastewater treatment facility. The intermodal facility going in provides the trigger for an argument that hey, now is the time we need to reevaluate.”

Brooks Tree Farm owner Kathy LeCompte said the largest concern of an intermodal facility in Brooks is traffic.

The Brooks interchange, exit 263, is not on Oregon’s Statewide Transportation Improvement Program through 2024, meaning no improvements on the interchange are scheduled anytime soon.

But Snow said improvements for the interchange could be included in the Port of Willamette proposal.

“Certainly by driving by on a regular basis you could tell that the interchange is very, very busy and could use some upgrades,” Snow said.

More: Klondike and Taylor Creek fires grow together, but progress allows improved Rogue River access

The freeway interchange is already at maximum capacity in peak times and there are times cars will line up on Interstate 5.

“We don’t expect miracles and ... all of Oregon is in desperate need of better traffic,” said LeCompte, who said her business will not directly benefit from an intermodal facility.

“We do see the possibility of a port like this, whether it’s the Brooks location or the Millersburg, will help traffic in the state.”

bpoehler@StatesmanJournal.com or Twitter.com/bpoehler