All Aboard Florida Reveals that Freight Traffic Will Grow, Seeking $44 Million State Grant and Schedule Delays Could Cause Loan Default

Publish Date: 
Friday, June 20, 2014 - 5:30pm

By Arnie Rosenberg and Matt Dixon  Posted June 20, 2014 See entire source Article at TCPalm

"All Aboard Florida officials have consistently declined any comment about freight, but the bond document pulls back the curtain on their expectation: freight traffic along the corridor will grow. And more-than-expected growth could be a problem, according to the document.

If FECR’s freight operations grow faster than we have anticipated, our ability to grow our service could be impacted and our level of on-time performance and the reliability of our passenger service could be affected as a result of our shared use of the corridor,’ the document stated."

"All Aboard Florida will have no cash flow or revenue until the project gets off the ground in 2016, which the company acknowledges is a risk.

“If the railway is not completed or operational on schedule ... we may be unable to make payments of principle, premium, if any, and interest on the notes,” the bond proposal reads."

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The 349-page document, developed to help raise $390 million for the first phase of the project, details ridership projections and financial estimates. It is information All Aboard Florida HAS KEPT SECRET — despite government officials and private citizens calling for its release — and details All Aboard Florida has gone to court to protect.
The document also reveals All Aboard Florida plans to seek a $44 MILLION STATE GRANT to connect its service with Tri-Rail in Miami.

All Aboard Florida officials declined to comment on the bond-offering document.
Controversy around plans for the 235-mile, high-speed passenger train, linking Miami and Orlando, has grown since the beginning of this year, and most of the opposition has come from the Treasure Coast. All Aboard Florida would be built and operated with private funds, although it is seeking a $1.5 billion federal loan for upgrade of its infrastructure.

While no passenger railroad in the world is profitable without a government subsidy, All Aboard Florida’s real estate development — some of which already has been unveiled — would contribute to its bottom line, generating $30 million in net operating income in its early phase and more than $80 million when it’s built out and leased, according to the document.

All Aboard Florida opponents also have been vocal in their accusations that improvements to the rail corridor were intended only to serve the railroad’s sister company, freight line Florida East Coast Railway, which would share the upgraded tracks.





Citizens Respond

Sunday, June 22, 2014 - 7:00am

"But please explain how the statement: 'The document also reveals All Aboard Florida plans to seek a $44 million state grant to connect its service with Tri-Rail in Miami' intercalates with AAF's claim of 'No Taxpayer Money' used for the boondoggle? This document also shows how AAF fails miserably when it comes to the following RRIF (260.7) priority considerations: 1) AAF does not enhance public safety; 2) AAF does not enhance the environment; 3) AAF does not promote economic development for half of the counties it travels through; 4) AAF does not enable United States companies to be more competitive in international markets; 5) AAF does not adequately address the complexity of transportation problems as required by section 135 of title 23, United States Code, by the State or States in which they are located; 6) AAF will not preserve or enhance rail or intermodal service to small communities or rural areas. In fact, AAF will become a safety and economic detriment to the small cities and communities it is proposed to travel through. Hitherto, and therefore, the aforementioned is why Florida's NOT All Aboard!"

"To sum matters up, Palm Beach, Broward, Miami /Dade, and Orlando Counties all receive the major tax revenues from the commercial office towers and associated developments. Martin, St. Lucie, Indian River and Brevard Counties get the crumbs,the shaft, the noise, inconvenience and not even a stop. The developer gets grant money and low cost bond money to make his cash flow of millions at the expense of the tax payer AND when the rider ship don't pencil out to be "profitable", the freight trains has new tracks and crossings to run on. This matter isn't about some new, exciting and passenger affordable bullet train for commuters and tourists, it is just a front and a lost leader. Thank you for bringing clarity to the big picture referenced in your article and the economics in a "fair and balanced way". Tattoo the treasure coast as "suckers" as this is not a valued added treasure to our property and lifestyle."

"Fortress can buy the bonds/ notes, and advantage the arbitrage while being subsidized with Federal money, now seeking state grants.A veritable Disney Fantasia; Fortress has significant investments in Disney.  It's a small world after all, predicated on a venture that postulates a high speed passenger service is a stand alone profitable investment.funded entirely by a private concern. One of the most profitable RR companies is the Richmond, Fredricksburg and Potomac which has no rolling stock or operations but owns the rights of way South of DC. RRs also lease these rights of way to communications companies to construct cell towers and lay cable. RRs, as well, are exempted from paying taxes on rights of ray, an anachronism dating back to the early 20th century. Prior to airline travel, Interstates travel was expedited by rail; through the 1940s passenger RRs earned up to 40% profit on their routes.This steadfastly looking to the past assumed they were in the RR business not in the passenger transportation business.No passenger rail service today is profitable."