Letter To John Winkle, Federal Railroad Administration From Henry Copeland

Publish Date: 
Tuesday, November 18, 2014 - 11:15am

At the outset let me state that I am adamantly opposed to AAF’s proposed use of FEC tracks running along the Treasure Coast coastline and through our communities (the proposed 128.5 mile “N-S Corridor”). I heartily concur with extensive criticisms citing multiple adverse impacts to our communities, traffic flow, public safety, and marine traffic and access/egress to inland waterways.

On a less general and more personal note, AAF will immediately adversely impact my quality of life because it runs through my small town of Jensen Beach and will, along with increased freight traffic, pass (noisily) within earshot immediately to the East of my residential community of 400 homes, Leilani Heights.

IF AAF’s proponents can argue any (tenuous) financial merit it is only because they have created a mixed-use project combining real estate development and passenger rail elements, while acknowledging though maintaining separate the impacts of additional freight operations.

Of course, if we were to unbundle the project, you would find that the existing market for financing meritorious real estate projects already exists and there is no need for either Federally funded or guaranteed loans OR for alternative tax-exempt financing (which I understand precludes the borrower’s use of depreciation tax shields on the related financed project cash flows, thus significantly adversely impacting after-tax cash flow).

Also, if we unbundle and separate real estate aspects from the underlying railroad aspects, I think any objective appraisal would conclude that forecast passenger ridership of 3.5 million is unsupported and unsustainable, and related revenue is likewise overstated. These economic factors do not justify any extension of credit or credit support (especially since FEC has apparently reserved “incidental” benefits of increased freight operations to itself by holding same outside the scope of AAF). Will FEC pay significant participating license fees to AAF for use of the added track to haul added freight? Does FEC expect a windfall gain without compensating us for the adverse impacts or the Federal government for credit support for that windfall?

In short, if the mixed use project makes sense, its real estate component could be separately financed wholly in the private market (without enhancement or support). Stripping the real estate away, AAF proponents have disingenuously separated for their own benefit the not insignificant benefits of increased freight operations, leaving the weakest part of the project (passenger operations) as the bare thread justifying the whole thing. They’ve taken the “candy” and left us the “wrapper” (i.e., trash) and they want Federal loans to pay for it.

In the context of the draft EIS, it cites jobs creation and regional economic benefits that simply will not exist or have any lasting positive impact along the N-S Corridor. In fact, to the contrary, our area will suffer material negative economic impacts because of the adverse effects on property values (who wants more trains disrupting their lives?) and our significant marine industries. Has the draft EIS even attempted a credible study of these adverse impacts? What Federal subsidy do we affected residents derive as compensation for these losses?

As above, the draft EIS cites a transportation benefit insofar as AAF provides alternatives to private automobiles and improves transportation efficiency. Certainly NOT along the N-S Corridor! Our route comprises the bulk of the length of the AAF route, but our private auto usage will increase just to drive to find access to AAF. This cannot be mitigated by citing a terminus within the N-S Corridor because we simply are already fully developed along the FEC tracks and the existing infrastructure and topography cannot efficiently accommodate any station(s) on the Treasure Coast without their own significant interruptions.

So while proponents in South Florida (i.e., West Palm Beach and points South) may see economic and transportation benefits, the region surrounding the N-S Corridor will not. We will be negatively impacted, and preferred alternative economic and transportation development will be crowded-out by the smothering presence of AAF. Has the draft EIS even considered how our regional economic and transportation development will be stunted? No – the draft simply concludes “No effect” for the No-Action Alternative.

Lastly, there’s always an alternative, though in this case it may not be FEC’s or AAF’s. We have local and regional (multi-county) transportation and other cooperative planning initiatives. To suggest that absent AAF we will not generate our own economic and transportation development planning with attendant benefits is staggeringly disingenuous.

For your information, in August 2014 the Business Development Board of Martin County 1 hosted the Martin County Economic Summit. Speaker Andrew Corty, Publisher of Florida Trend magazine, noted that an annual influx of 250,000 new Floridians for the next 12 years will shift Florida’s population center further away from South Florida. The ramifications may indeed support not only intercity passenger rail service, but the eventual addition of associated commuter lines, as well. While AAF may be the first private entity to offer itself to take this step, it is not necessarily the best or only alternative to take.

All this new population will trend inland, away from the coastal FEC tracks. The draft EIS implies that the No-Action Alternative means no passenger rail development for Florida, and this seems far from the likely truth. Your final EIS must consider the significant adverse impacts of proceeding with the poorly-located AAF proposal when it is abundantly clear that sound planning suggests the issue has a greater importance with better alternatives to serve the “new Florida.” That’s why organizations like the MC BDB host economic summits and engage the community in thinking about the future.

As you have doubtless learned about Martin County, we are uniquely and adamantly concerned with protecting our environment and our unmatched high quality of life. AAF trespasses on these interests of ours and forestalls better planning and better economic development which will doubtless unfold.

The weaknesses of the entire AAF project are so many and so obvious that the final EIS can only be described as a fraudulent sham if it fails to conclude that the project’s negatives vastly outweigh benefits that are more readily available through alternative, less intrusive and less damaging development and transportation projects.

I suppose you face the nuance that South Floridians would like the economic development of train stations in existing dense urban areas like West Palm Beach and Lauderdale, while we along the N-S Corridor see no such benefit. I suggest that a future inland passenger rail line, perhaps along or in conjunction with the existing CSX tracks, can also be designed to provide similar economic and transportation benefits to South Florida (albeit at a somewhat later date) PLUS significant benefits to points North WITHOUT the huge negative impacts to our coastal communities.

The formal Economics literature refers to the “tree-cutting” paradigm wherein the timing issue of economic projects is considered. When is the best time to harvest the crop – to proceed with the project? While an imperfect analogy, in the case at hand, it is premature to lock Florida into an obsolete passenger rail system running along the N-S Corridor that will do more damage than good to an area that will be hosting considerable future growth. We are still struggling to figure out how best to deal with growth issues – we insist on that right of self-determination – and development of AAF now is an externality that threatens to “derail” efforts we have been undertaking since passage of Florida’s Growth Management Act decades ago. A decision that values the immediate interests of South Florida over those areas that represent Florida’s future is a hasty decision – especially when better alternatives exist that can provide value to everyone.

Additional considerations regarding adverse planning and financial/economic impacts of the AAF proposal:

At the recent AAF draft EIS open house at the Kane Center in Stuart, Florida, I submitted a handwritten comment arguing that the AAF proposal advances a very poor plan for intercity passenger rail connectivity whose impact will be to chill or kill better timely planning for a rail system to carry “the new Florida” into the future. This is itself a significant negative impact that you should consider. In my years of experience in corporate planning, once a plan is chosen further work on alternative plans is usually abandoned or put on the back burner for use only when and if the chosen plan falls flat. That is exactly what will happen with AAF.

Second, in the same vein, by proceeding with AAF, the financial prospects of a future, vastly superior alternative dim or are extinguished because the delay in advance planning (noted above) will always result in significant expense added to any alternative that might later be dusted-off in the future (when AAF fails or proves unsuitably located). Likewise, should AAF continue as a meager passenger line, any diminution or splitting of the “pie” of the passenger service market will reduce revenue prospects for an alternative line and likely drag down the financial prospects needed to launch and finance that preferred alternative. There are significant opportunity costs involved with AAF.

In short, using Mr. Flagler’s old coastal line will disserve a new Florida whose population centers are moving North and inland from the coast and South. Since AAF track is virtually surrounded by development we won’t be able to add trunk lines for commuter connectivity (like Metro-North meeting with Amtrak lines in Stamford, Connecticut, for example). AAF builds upon a bad inter-city passenger rail planning foundation that is located poorly and gridlocked so that future connectivity will be virtually impossible. AAF passenger service will be suboptimal and obsolete from the moment it commences operation, and this will only worsen as Florida’s population grows to new inland population centers.

The costs of bad planning and financial downsides are potentially staggering and are obvious adverse impacts that should be noted in the final EIS. AAF will not only significantly negatively impact those of us who proudly call the Treasure Coast home and who enjoy our marine and coastal communities, it will continue to harm those future generations of Floridians who move here to inland communities that will be ill-served by and isolated from a coastal passenger rail line they can’t even access without undue inconvenience, cost and time (even if you somehow find a place to locate a station on the Treasure Coast coastline).

Oh, by the way, if Floridians cannot afford to build a new inland passenger line from scratch, why can’t we build one around the existing CSX tracks? That model could accommodate future planning, population centers and maybe eventual commuter spur lines. Michelangelo sculpted The David, a masterpiece, from a used and discarded block of marble. CSX may not be discarded, but it could well serve as a preferred foundation for an intercity passenger rail service for the “new” Florida. Let that be where we look. To proceed with AAF in the wrong (coastal) location would be akin to Michelangelo using a substandard and small piece of used marble to create an odd Garden Gnome instead of the better used marble that resulted in The David. Let’s not make the very big mistake that is AAF. The AAF proposal does not merit Federal or state support because it dis-serves vast areas through which it would run and it will crowd-out vastly superior rail transportation alternatives. Your EIS should not only NOT support AAF, it should offer harsh criticism and recommend rejection of any Federal financial assistance.

I would be happy to discuss this matter with you further should you have any questions.


Henry Copeland, Esq.