All Aboard Florida on line for government aid - both loans still pending

Publish Date: 
Thursday, October 23, 2014 - 8:30am

By Lydia Dinkova Miami Today

All Aboard Florida, the rail line that is in a few years to link Miami and Orlando, has expanded its funding options.

The company, a subsidiary of Coral Gables-based Florida East Coast Industries, has applied for $1.75 billion in a private activity bond allocation from the US Department of Transportation, All Aboard Florida representatives told Miami Today by email.

About $325 million of that is to go toward any project-related expense for the part of the rail line that is to be in Miami-Dade County.

“It could be anything related to the actual capital cost of the project,” said Gerald Heffernan, a Miami-Dade County attorney.

On Tuesday, the Miami-Dade County Commission voted to authorize the Florida Development Finance Corp. to issue $325 million in bonds on behalf of All Aboard Florida for capital costs needed for the Miami-Dade County leg of the rail line.

The Florida Development Finance Corp. (FDFC), created by a state statute, issues industrial revenue bonds. The governor appoints its board members and employees of Enterprise Florida, the state’s economic development arm, serve as the staff.

The corporation acts as a conduit issuer and doesn’t assume any financial risk for the bonds.

The corporation is authorized to issue bonds for an entity in a county within the state.

Tuesday’s county commission vote was essentially a housekeeping item. While the FDFC and Miami-Dade already have an agreement for the organization to issue bonds for projects in the county, the FDFC wasn’t allowed to issue bonds higher than $2 million in the county.

The vote allowed for the state entity to issue the $325 million bonds, but only for the All Aboard Florida project.

“Other project limits remain at $2 million,” said Mr. Heffernan, the county attorney.

In addition to the bond financing, All Aboard Florida has applied to the US Department of Transportation for a $1.87 billion Railroad Rehabilitation and Improvement Financing (RRIF) loan, according to federal records Miami Today obtained through a Freedom of Information Act request. Of that loan request, $740 million is for the Miami to West Palm Beach leg of the rail line and $1.13 billion is for the West Palm Beach to Orlando segment, records show.

Both loan applications are still pending.

“All Aboard Florida is engaged in many different financing discussions, the RRIF loan being one of them. We have determined it is beneficial to finance our project partly through the sale of tax-exempt bonds in the private markets through private activity bonds,” All Aboard Florida representatives said in an email. “There is absolutely no risk to the local, county, state or federal government through this kind of funding mechanism.”