By Kimberly Miller Friday, June 20, 2014 Palm Beach Post Staff Writer
"Richard Radcliffe, executive director for the Palm Beach County League of Cities says. "If it’s $23 from Miami and then $50 to Orlando, then we’ll just rent a car. Considering they are trying to go for federal money, you would hope there would be tremendous transparency.”
A private prospectus for All Aboard Florida’s successful $405 million bond sale this week discloses information regarding the company’s ridership estimates and ticket costs, according to a report from TCPalm.
The document, as reported by the Treasure Coast newspaper, covers details on the express passenger rail from Miami to West Palm Beach, including a $23.77 coach ticket price beginning in 2016.
All Aboard Florida sued the Florida Department of Transportation last month to keep such details as ridership numbers and ticket prices from being released as a public document.
All Aboard Florida declined to comment Friday on the details of the bond prospectus, but the bond’s nature was debated during the Treasure Coast Regional Planning Council meeting Friday. The bond carries a 12 percent payout, which is considered “quite high” when the typical high-yield bond is averaging between 5.5 percent and 6 percent.
“People were just questioning what kind of collateral they were putting up and why we are doing a $1.5 billion taxpayer-funded loan if it’s so risky,” said George Gentile, chairman of the Jupiter Inlet District, who attended Friday’s meeting.
All Aboard Florida has requested a $1.5 billion Federal Railroad Administration loan.
The bond was successful. A Reuters story Friday said the market was “stunned” by the sale.
According to the TCPalm report, ridership is expected to be between 1.9 million and 2.6 million people by 2019. Ticket prices could increase to $25.23 by 2019. Business class tickets could cost $29.95.
Richard Radcliffe, executive director for the Palm Beach County League of Cities, said he’s tried in vain to get All Aboard Florida to divulge their ticket prices.
“It didn’t seam feasible to me until they said there would be a dramatic discount by taking the train at an off key time,” Radcliffe said. “That was the only thing that made me think this would work practically in the real world.”
Still, he’s curious what the cost will be from West Palm Beach to Orlando, and whether it will be worth taking the train over driving for a family going to DisneyWorld.
“If it’s $23 from Miami and then $50 to Orlando, then we’ll just rent a car,” Radcliffe said. “Considering they are trying to go for federal money, you would hope there would be tremendous transparency.”
Lantana Mayor Dave Stewart said he believes the $23.77 price from Miami to West Palm Beach is “fair” but isn’t in favor of the project, and believes the freight traffic will ultimately be the money maker.
“I don’t feel there will be enough ridership to do their 32 trains per day, unless the train only seats four people,” said Stewart, who has five crossings in his town and is concerned about traffic congestion. “Whether it’s one or two or three more trains, it’s going to be a disadvantage for traffic.”