ALL ABOARD CANNOT SPEND IT'S $1.75 BILLION IN PRIVATE ACTIVITY BONDS UNTIL 45 DAYS AFTER THE RELEASE OF THE FINAL ENVIRONMENTAL IMPACT STATEMENT

Publish Date: 
Wednesday, December 24, 2014 - 11:30am

Even if All Aboard Florida raises $1.75 billion in the next week, as it has planned, it likely won’t be able to touch the money until well into 2015.

The U.S. Department of Transportation on Thursday gave All Aboard Florida the go ahead to sell tax-exempt private-activity bonds through the Florida Development Finance Corp. 

The DOT, however, prohibited All Aboard Florida from using any of the money until 45 days after release of the final environmental impact statement on the project. 

The Federal Railroad Administration is just beginning to update the draft environmental impact statement, and — while officials there have been hesitant to set a deadline — the final document could be at least several months away.

All Aboard Florida, in its Sept. 24 application to Florida Development Finance Corp., said it planned to market the bonds and close the financing by the end of 2014.

All Aboard Florida, in a statement Tuesday, said the bonds “are still being processed.” Officials of Florida Development Finance Corp. could not be reached for comment.

The $1.75 billion would be used for locomotives, train cars, land acquisition, construction and equipment along the 235-mile corridor between Miami and Orlando, according to the railroad’s application to Florida Development Finance Corp.

All Aboard Florida would spend bond proceeds in five of the eight counties along its route, but not in Indian River, St. Lucie or Martin counties, according to its application. Construction on the Treasure Coast, estimated at $387 million, would be financed with equity — money from the railroad’s parent company Florida East Coast Industries, All Aboard Florida President P. Michael Reininger said Friday.

In addition, $405 million of the bond money would be earmarked to repay investors who bought All Aboard Florida’s high-interest bonds in July, according to the application. That $405 million has remained in escrow, according to the application.

The private-activity bonds, though issued through a state agency, would carry no risk to taxpayers, according to the Department of Transportation. “Liability for full repayment of bonds sold rests exclusively with AAF and its subsidiaries,” the federal agency said in a statement.

Despite approval to borrow through state-issued, tax-exempt bonds, All Aboard Florida won’t yet withdraw its application for a $1.6 billion loan from the Federal Railroad Administration, Reininger said Friday.

Borrowing $1.75 billion by selling bonds may replace the loan request “in whole or in part, ” but a decision won’t be made until the bond financing is completed, Reininger said Friday.

All Aboard Florida — a $2.25 billion project — plans to begin service on the 66-mile stretch from Miami to West Palm Beach by the end of 2016. Service would be extended the final 169 miles, through the Treasure Coast to Orlando International Airport, in the first quarter of 2017.

Work on the first phase, including stations in Fort Lauderdale and West Palm Beach, already is underway.