All Aboard Florida has received millions of dollars from the federal government in the past three years, an investigation by Scripps Treasure Coast Newspapers has found. That “financial assistance” contradicts All Aboard Florida’s contention that the $2.25 billion railroad would be entirely private. The federal money went to improve grade crossings and to upgrade the rail corridor for All Aboard Florida’s passenger service as well as for an increase in freight traffic, the investigation found. The federal funds were paid through the Florida Department of Transportation to Florida East Coast Railway, All Aboard Florida’s sister company and the freight line that would share the rail corridor. In a federal document Scripps Treasure Coast Newspapers obtained, All Aboard Florida said it expects to continue receiving the federal money. Receiving financial assistance from the federal government flies in the face of All Aboard Florida’s core marketing philosophy, that it would be the country’s first privately owned, operated and maintained passenger rail system. From its public unveiling in March 2012, All Aboard Florida has insisted it would accept no government payments, grants or subsidies.
Yet in an Aug. 15 filing with the U.S. Department of Transportation, seeking authority to issue tax-exempt bonds to fund the project, All Aboard Florida explains receiving the federal money and how it was used.
“The Project has already received financial assistance under Title 23 of the U.S. Code,” All Aboard Florida says in its application, signed by company President P. Michael Reininger. “The planning process for All Aboard Florida started in December 2011. Since then, approximately $9.3 million in funds from Section 130 of U.S. Code Title 23 has been invested in the corridor to improve railway-highway grade crossings and to prepare the corridor for growth in rail traffic, including the introduction of passenger service. Future investments from the Section 130 program are planned for future calendar years.”
In a prepared statement, however, All Aboard Florida denied receiving the funds.
“All Aboard Florida has not directly or indirectly received federal funds,” the company said in its statement, provided Wednesday to Scripps Treasure Coast Newspapers. All Aboard Florida would not comment further.
Likewise, Florida East Coast Railway issued a denial: “FECR has not directly received federal funds but has indirectly through state programs and a (federal) TIGER Grant for infrastructure and grade-crossing upgrades.”
The Section 130 program provides federal money to eliminate hazards where roadways, bike trails and pedestrian paths cross railroad tracks. States run the program for the federal government. In Florida, the state Department of Transportation administers the program.
FDOT confirmed paying the federal money directly to Florida East Coast Railway.
Since the 2011-2012 budget year, All Aboard Florida and Florida East Coast Railway have received $878,665 in federal money for improvements and upgrades on the Treasure Coast alone — $500,024 in Martin County, $228,061 in Indian River County and $150,590 in St. Lucie County, according to Florida Department of Transportation records obtained by Scripps Treasure Coast Newspapers.
The Treasure Coast payments were part of the $12.2 million from the federal program paid by FDOT to Florida East Coast Railway for work along its entire corridor, from Miami to Jacksonville.
Since early 2014, All Aboard Florida has been the most controversial issue on the Treasure Coast. The project would run 32 high-speed passenger trains a day between downtown Miami and Orlando International Airport. Service through the Treasure Coast would begin in early 2017.
After the maritime community began sounding the alarm about increased closings of the St. Lucie River bridge in Stuart, numerous local governments passed resolutions, opposition groups popped up and the myriad other concerns — such as traffic delays, safety, noise and pollution — continued to grow.
All Aboard Florida even became an issue in last year’s gubernatorial campaign. In the face of charges that the state was subsidizing All Aboard Florida by funding a transportation hub at Orlando International Airport, Gov. Rick Scott, in a June 9 letter to Reininger, said he wanted “to be clear on a critical point: that the All Aboard Florida proposal is a private-sector venture to construct, operate and maintain a passenger rail system. There will be no state subsidies for this project.”
Both Scott and challenger Charlie Crist avoided taking positions on All Aboard Florida. Scott deflected reporters’ questions around the state, repeatedly answering that All Aboard Florida “is a private company.”
Former Florida Secretary of Transportation Ananth Prasad echoed Scott’s position.
Scott’s office on Thursday declined to comment on All Aboard Florida receiving federal funds.
The Florida Department of Transportation, though, stressed that the question is “a federal issue.”
“None of this is state funding,” FDOT spokesman Dick Kane said. “The funding is mandated and provided by the federal government for rail-safety improvements.”
The Section 130 program, he said, has been in existence “for several decades,” and the money “is dispersed to all major rail lines in the state.”
Private financing of All Aboard Florida, its officials contend, is why the company is not required to open some of its records, both to the news media and to other government agencies.
As its application for a $1.6 billion low-interest federal loan sparked controversy, All Aboard Florida remained steadfast in its assertion that the loan would be repaid and the railroad would be entirely private.