MORE SPIN FROM ALL ABOARD FLORIDA REGARDING THE LOAN

Publish Date: 
Tuesday, October 7, 2014 - 6:00am

Full Article by Dave Berman at Florida Today

All Aboard Florida has modified its financing plan for its proposed passenger rail service, so that the public would not face any financial risk and the project could be completed quicker, the company's president said Monday.

Under the $1.75 billion financing plan, "no public entity or taxpayer bears risk," All Aboard Florida President and Chief Development Officer Mike Reininger said.

All Aboard Florida plans to start rail service from Miami to Orlando, with interim stops in Fort Lauderdale and West Palm Beach. Under the current plan, the trains would pass through south and central Brevard County 16 times a day in each direction, but would not stop within the county.

Members of the public have raised a number of objections to the project. One of them is the possibility of federal loan guarantees for track and station development putting public money at risk.

Now, All Aboard Florida instead will use what's known as private activity bonds to finance the project. Those bonds — which are designed to encourage private companies to invest in public infrastructure — would be marketed and sold to private investors. Reininger said All Aboard Florida is "highly confident" of finding the needed investors.

Construction of the first phase of the project, from Miami to West Palm Beach, is underway, with service expected to begin by the end of 2016. By using this financing mechanism, Reininger said, All Aboard Florida hopes to begin construction of Phase 2, from West Palm Beach to Orlando, in early 2015 and have service underway by mid-2017.

"This financing mechanism poses zero risk to the local, county, state or federal governments," the company said in a statement. "The government does not provide a guarantee for the bonds or provide any rate subsidy. Taxpayers have zero risk."

The U.S. Department of Transportation must approve this funding mechanism, enabling the bonds to be tax-free for investors. A unit of the state economic-development organization Enterprise Florida, called the Florida Development Finance Corp., will act as the issuer of the bonds, but assumes no financial liability.

As part of the process, Brevard County must amend its own agreement with the Florida Development Finance Corp. for this transaction to move forward. The County Commission will consider this issue at its Oct. 21 meeting.

The financing issue does not affect an ongoing series of eight scheduled public input meetings related to the potential environmental impact of the project on the existing rail corridor from West Palm Beach to Cocoa, and on the planned new rail link from Cocoa to Orlando International Airport.

Among the other issues opponents have raised about the rail project are its impact on the environment, noise, safety and traffic.