Publish Date: 
Wednesday, June 24, 2015 - 9:30am

All Aboard Florida on Friday received a six-month extension to sell $1.75 billion in tax-exempt bonds to help pay for its express-passenger rail project between Miami and Orlando.

Officials with the U.S. Department of Transportation gave the Coral Gables-based company until Jan. 1 to sell the private activity bonds. The bonds have been at the center of federal lawsuits filed by Martin and Indian River counties challenging the rail project.

This month U.S. District Court Judge Christopher Cooper denied requests by Martin and Indian River counties for an injunction to block the bond sale, saying, in part, that the money was not a linchpin to finishing the passenger rail line. A status hearing has been set for June 29 in both lawsuits.

“We are pleased the U.S. Department of Transportation approved an extension for our PAB allocation,” All Aboard Florida said in a statement issued Monday. “We will continue to move forward with our project that will transform mobility in our state and provide hundreds of millions of dollars in economic activity.”

All Aboard Florida plans to run 32 trains a day — 16 round trips — on the Florida East Coast Railway between Miami and Orlando. Service is expected to start in 2017.

All Aboard Florida won preliminary approval from the Department of Transportation in December to issue the private activity bonds, which are purchased by individual investors at no risk to taxpayers. At the time, federal officials gave the company until July 1 to sell the bonds. Friday’s decision extends that deadline until Jan. 1.

All Aboard Florida also needs a final approval to issue the bonds from the Florida Development Finance Corporation.
In All Aboard Florida’s case, the bonds would be issued by the Florida Development Finance Corporation and then sold to investors by the private rail company.

All Aboard Florida is seeking the private activity bonds because they are cheaper for the project than if it used taxable bonds. Replacing the bonds with taxable debt would increase All Aboard Florida’s interest costs by as much as $630 million over the first 10 years of the project, court documents say.