More than three months after a ground-breaking ceremony kicked off the long-awaited Barnhart Road extension project, Pendleton Economic Development Director Tracy Bosen says work there is "moving along very nicely."

But the road is only one part of a bigger equation - one city leaders hope brings new business to an industrial park near the Eastern Oregon Regional Airport and Interstate 84.

A few hurdles still remain:?getting a water line and other utilities connected at the site, along with the possibilities of arterial roads and a ready-made building to house any tenants there.

How the city will tackle at least one of those is unclear, after a federal grant application for the water line project recently came back unsuccessful. That leaves the city with a couple of options, said City Manager Larry Lehman. It can reapply for the grant as early as October, or simply borrow the money to pay for it.

"It would make a good late fall or winter project,"?Lehman said.

A federal guideline under the grant pegged the water line project at $1.5 million, Lehman said, but he estimated the city could get a better deal going out to bid on its own. And city officials already have the green light to borrow enough to cover the entire cost, he added.

Lehman described other utilities at the site - electric, sewer, fiber-optic - as "quite readily available"?once the city decides to connect them there.

Then there's the question of space. The idea of putting an empty building at the site is still in "exploratory stages,"?Lehman said, noting its potential benefit. He said many businesses won't consider a new location without an existing space to house them.

"In that case, you'd build basically a warehouse-type building that could be subdivided to different needs,"?Lehman said.

Bosen said the city is looking for ways to make that happen - perhaps private investors, since the city doesn't own the land or have the money to take it on by itself.

Meanwhile, the road itself continues to progress along I-84 east of Pendleton.

"As you drive by, you see that they've started laying rock,"?Bosen said. "My understanding is that it's not going to be long before they start putting asphalt down."

Even with the gas tax in effect, it's still unclear how much the city will have to borrow to pay off the cost of the road. What is clear is that number should be less than first expected, Lehman said. Early estimates put the city's debt burden as high as $6 million, but a more likely range now is $3-3.5 million, he said.

That's largely because the cost of the road itself came in low, driven down by a competitive bidding climate. Bids for the two sections of the 4.5-mile road combined for just over $5 million, well below initial expectations.

Revenue from the gas tax will help pay off the city's debt. Federal transportation funds also funneled into the work.

As for future tenants on the site, Bosen said nothing official has been nailed down. And though he didn't offer details of who the city's been in contact with, Bosen said at least one "old prospect"?could come back to the table now that the road is started.

During the next few months, officials will also decide how to spend $2.5 million earmarked in House Bill 2001 earlier this year, though Lehman said that money can't be used to pay off debt. More likely, it will go toward arterial projects near the main road.

The road is scheduled for completion by October.

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