At the beginning of 2014, when a handful of concerned citizens in IR, Martin and SL counties learned about All Aboard Florida’s intent to operate 32, 110 m.p.h. trains per day through 42 towns along the Treasure Coast between Miami and Orlando, we began a volunteer research project that drilled down into the financial, corporate and political structure of this project. What we found began a revolution due to the grassroots movement that spread like wildfire from Brevard to Broward.
We exposed the truth at every level beginning with the fact that even though AAF touted itself as a private company, it applied for $1.6 billion through a Railroad Rehabilitation Infrastructure Fund or RRIF loan, a taxpayer subsidy to pay for its venture. In its Executive Summary, AAF admitted that the private market would not finance this project. I submit that no banker would lend money without knowing how it would be paid back.
Upon further scrutiny we determined that AAF was unable to provide a cost/benefit analysis for its project and had no proof of rider ship studies that guaranteed a return on investment, and no guarantee for paying back the loan should the project default.
An analysis of the financial risks by John Friedman, Associate Professor of Economics and Internal Affairs from Brown University concluded:
The AAF trains system will generate annual losses of $110 million and will be unable to service the company’s large debt burden. Projected annual revenue is $98.8 million with operating costs of $81.5 million and debt service costs of $100 million, despite all subsidies. AAF would have to charge $273 per ticket to cover its service debt.
In desperation, AAF sold $405 million in junk bonds with collateral which were purchased as an equity play so stated Allianz Bernstein, the buyers, at an annual interest rate of 12%. One wonders how AAF intends to pay the $480 million per year accruing in interest.
The risks to this proposed venture were so high that public outrage forced AAF to put the RRIF loan on hold. AAF then reverted to application for $1.75 billion in tax-exempt Private Activity Bonds, another pecuniary aid, the validity of which is now being challenged by we the people, most recently at the Federal Department of Financial Corporation and again with their Board on April 20th in Tallahassee.
The negative impacts All Aboard Florida will have upon our safety and health, our quality of life, property values and livelihoods, threat to lagoon and wildlife habitat and many other aspects are so numerous that it has galvanized all three Treasure Coast counties in this fight.
Over 52,700 signatures on a petition in opposition to All Aboard Florida have been submitted to Congressman Patrick Murphy. Over 12,000 comments from the public and local governmental agencies have been submitted in response to the Federal Railway Administration Draft Environmental Impact statement.
Through our educational efforts, we have persuaded IRC to allot $2.7 million for litigation to stop AAF. We garnered $1.4 million from Martin County and this week, a pledge for $1/2 million from SLC. St. Lucie Village volunteered $60,000. John’s Island has contributed $50,000 thus far. We have Steve Ryan, an attorney and lobbyist who specializes in derailing train projects and has a history of doing so. But litigation is expensive and it is going to take contributions in order to protect our community.
The bureaucrats, the cronies and the politicians joined hands in promotion of AAF, including the Federal Railway Administration, the FDOT, USDOT, the U.S. Coast Guard, the Army Corps of Engineers, the EPA and the entire Executive Branch of government turned its back on us. We were left with no option but to turn to the Judicial Branch for protection.
We stand united against this travesty, a freight and real estate venture masquerading as high speed rail, all on at-grade crossings.