FLORIDA TRAIN DEVELOPER MAY SWITCH TRACKS ON FEDERAL FINANCING

Publish Date: 
Thursday, June 29, 2017 - 9:45am

All Aboard Florida and its parent company, Florida East Coast Industries, inquired in recent months about obtaining a low-interest loan to finance Brightline's train service from the U.S. Department of Transportation's Federal Railroad Administration, according to correspondence obtained by The Bond Buyer.

The loan would be used to complete AAF's express passenger railroad system between Miami and Orlando.
When asked if AAF planned to forego using tax-exempt bonds to finance its project, the company stated that it remains open to using PABs and other forms of federally supported financing.

"Brightline is considering all funding options," the company stated. "We continue to explore financing mechanisms that exist for projects that incent private companies to invest in infrastructure used by the public."

This, of course, was not the first time AAF has sought an RRIF loan. In 2014, they applied for a $1.6 billion RRIF loan. During the extensive environmental review process, however, they changed course and received a $1.75 billion activity bond allocation.

This lead to the lawsuits by Martin and Indian River counties who challenged the bond allocation. In August 2016, AAF withdrew its PAB application and received $600 million after U.S. District Judge Christopher R. Cooper's ruling, which favored Martin and Indian River counties.

Last week, Florida East Coast Industries Executive Director Michael Reininger and opponents of the train clashed during a hearing before the U.S. House of Transportation and Infrastructure Subcommittee on Railroads, Pipelines and Hazardous Materials.

AAF is quick to blame their opponents for the delay in their project.

Stephen Ryan, a representative of Martin County and CARE FL, wholeheartedly disagreed. "They have manipulated the process in an unfair way," he stated. "It insults the intelligence of voters who pay taxes that AAF would complain in a congressional hearing room about the problems in the process when they've deliberately manipulated and frustrated the process the way they have."

"We did not delay (AAF) a day," he added. "They tried four times to sell the bonds and failed. Now they are giving up on tax subsidised bonds and switching back to a different form of subsidy, a federal loan. The irony is they had previously abandoned the subsidised loan for subsidised bonds in 2014.

"As Yogi Berra would have said: 'It's deja vu all over again.'"

Read more here.

Original article written by Jennifer Sorenture of the PalmBeachPost.