Is It Florida Versus All Aboard Florida Or What?


Two companies with ties to All Aboard Florida —  Florida East Coast Railway and Florida East Coast Industries — have given more than $125,000 to candidates and committees during the 2014 election cycle — a fraction of what several other large businesses in have contributed during the same time frame, state and county records show.

Florida East Coast Railway contributed $74,825 to 2014 campaigns, state finance records show. The vast majority of that money — $70,000 — went to Let’s Get To Work, a political committee backing Gov. Rick Scott’s re-election campaign.

Florida East Coast Industries had contributed $51,689 as of Monday afternoon, according to state finance records. The money went to several campaigns, including: $7,500 to the Republican Party of Florida; $3,000 to Florida Agricultural Commissioner Adam Putnam: and $3,000 to state Chief Financial Officer Jeff Atwater.

The company contributed $1,000 each to both Democratic State Sen. Maria Sachs and her Republican challenger Ellyn Bogdanoff in the Palm Beach-Broward Senate District 34 race.

Florida East Coast Industries also contributed $1,000 each to Palm Beach County Commissioners Steven Abrams and Paulette Burdick.

By comparison, U.S. Sugar has given more than $2.3 million to state candidates, state finance records show. Roughly half of that went to the Republican Party of Florida.
Political newcomer David Silvers hopes to beat incumbent Bill Hager

David Ryan Silvers is running for political office for the first time, and in a district that might be the most competitive in Palm Beach County. What could make his chances of a win seem even more tough is that he’s running against a man who already has name recognition and two consecutive terms in his pocket. But Silvers says he is confident he’ll be the one chosen to head to Tallahassee , not Rep. Bill Hager.

The area is mostly coastal and is nearly split between the two parties; Republicans take 36 percent of the district and Democrats take 34 percent. It is the only district in the state house races that have both candidates running political ads on television.

Concerning All Aboard Florida. Silvers said some of his concerns are about safety and emergency crew response times possibly affected by the trains. He said the project would benefit the area economically, but, “when there’s such an outrage from a community, that usually would trump the economic impact.”

Hager said he is “sensitive” to the potential impact at the crossings. “So my position is we need to catch our breath and take a careful look at it,” Hager said.

All Aboard Florida cuts risk to taxpayers

To All Aboard Florida, the venture planning high-speed rail service through Brevard, for eliminating one of the main knocks against its plan. No longer will it seek a low-interest federal loan to build or upgrade tracks between Miami and Orlando — making it publicly subsidized and possibly a risk to taxpayers. Instead, the company plans to finance through private bondholders and repay them, tax-free, from private operating cash flow. The downside to those who oppose 32 trains a day zipping through towns on the Florida East Coast Railway: They can no longer fight the loan approval to monkey-wrench the plans.

 

Brevard Commission tackles train noise issue

County commissioners debated whether it would be a good idea to take steps to reduce the noise created by the horns of 32 passenger trains a day passing through 50 crossings in central and southern Brevard County.

The majority said they want to do whatever they can to implement a continuous “quiet zone” in Brevard along the route of the proposed All Aboard Florida train service. But Commissioner Trudie Infantini voted against that, fearing the safety issues created if the train horns do not sound as a train approaches the railroad crossings.

All Aboard Florida is proposing train service from Orlando International Airport to Miami, with interim stops in West Palm Beach and Fort Lauderdale. Plans call for 16 trains a day in each direction.

Some local residents are opposed to the service, because of its potential impact on the environment, noise, road traffic and safety. Compounding the issue: The trains will not be stopping in Brevard to pick up or drop off passengers.

The Space Coast Transportation Planning Organization proposes that the county and six affected Brevard cities and towns on the route seek quiet zone designation from the Federal Railroad Administration to eliminate the sounding of a train horn at each crossing the train approaches.

All Aboard Florida seeks private financing to replace or augment federal loan request

All Aboard Florida has changed its plan to pay for its express passenger rail line and will seek private debt financing that will replace or substantially reduce its current federal loan request, according to its website.

The private company, which plans to run 32 trains per day from Miami to Orlando, has applied for a $1.6 billion loan with the Federal Railroad Administration, but says it “has decided to pursue” the alternative route of a private activity bond allocation to pay for West Palm Beach to Orlando leg of the track.

The Miami to West Palm Beach portion of the plan was paid for with $405 million in high-risk bonds that the company sold in the spring.

Proceeds from the PABs, equity contributions from All Aboard Florida’s parent company, Florida East Coast Industries, and rolling stock financing, will provide all the funding necessary to develop the project between Miami and Orlando,” All Aboard Florida’s website says.

The $405 million in privately offered notes, which carry a 12 percent interest payout, were expected to be paid off by the $1.6 billion publicly subsidized federal loan once it was awarded.

In a prospectus for the bond sale, potential buyers were told that All Aboard Florida may redeem all or part of the notes sometime before the end of 2016 “with the proceeds of a Government Loan.”

All Aboard Florida said it floated the bonds because it didn’t want to wait to begin construction until the loan was awarded. An environmental impact statement, which was released last month, had been delayed since the spring, and a 75-day comment period still stands in the way of the loan being considered.

The company already pushed back the start date of the West Palm Beach to Orlando service to early 2017.

Cato Institute rail expert Randal O’Toole has said in the past that he is skeptical All Aboard Florida will be profitable either as a transportation or real estate investment.

At the same time, All Aboard Florida opponents have questioned why the federal government would loan money to a project that is considered so high-risk in the private sector that it required a 12 percent bond yield.

The money they borrowed in the marketplace was at a junk bond level,” said Steve Ryan, a Washington, D.C.-based attorney hired by the group Citizens Against Rail Expansion. “To me, raising money at junk bond levels is not an indication of strength.”

All Aboard Florida has said the total cost for its unprecedented project is $2.5 billion, and the prospectus notes that parent company Florida East Coast Industries has contributed $345 million in cash to the plan. It has also contributed to the land purchased for the stations in Miami, Fort Lauderdale and West Palm Beach, which is valued at approximately $730 million, according to the prospectus.

“They definitely have skin in the game,” said Chris Kotowski, an analyst at Oppenheimer & Co. in New York. “Three hundred and forty-five million dollars, that’s not peanuts.”

In general, though, the RRIF program authorizes the Federal Railroad Administration to provide direct loans and loan guarantees up to $35 billion to finance development of railroad infrastructure. Up to $7 billion is reserved for projects benefiting freight railroads.

The money may be used to acquire and improve rail equipment or facilities, refinance outstanding debt taken on to rehabilitate rail lines, and develop new intermodal railroad facilities — all things All Aboard Florida plans to do.

If the company’s $1.6 billion request is granted, it will be the largest RRIF loan awarded to date.

 

Commentary: All Aboard Florida benefits to county

West Palm Beach City Commissioner Shanon Materio
West Palm Beach City Commissioner Shanon Materio

West Palm Beach City Commissioner Shanon Materio

Perhaps it is from my perspective as a member of the Palm Beach County Metropolitan Planning Council (MPO) that makes it difficult for me to understand the recent debate among some of the cities in Palm Beach County whether to support the All Aboard Florida passenger rail project.

The comments seem to surround answering the general question of determining the direct benefit to a particular city. That in fact is what we do on the MPO. We decide how to spend tens of millions of public tax dollars for transportation projects that will not only help a particular local government but will enhance the overall transportation grid within Palm Beach County as a whole.

Most projects don’t directly help my city of West Palm Beach. However, everyone on the MPO realizes that better roads, better mass transit, better turning lanes and beautified roadways, no matter in what city they are located, work to make all of Palm Beach County and our collective quality of life better for everyone. Try to imagine the gridlock that would occur on the MPO if every dollar for every project had to also be justified by a city proving a direct beneficial nexus to every other city in Palm Beach County.

It is also why the MPO voted to set aside funding for “quiet zone” upgrades for the cities in Palm Beach County that run along the FEC (Florida East Coast) rail corridor. All the cities to the west of the FEC corridor will not directly benefit from the quiet zones, but recognize that the overall benefit to our county far exceeds the incremental cost.

I know there is a grass-roots effort attempting to stop the All Aboard initiative or somehow turn it into a public-sector project based upon a federal loan application, and as an elected official, I certainly respect the right of every citizen to get involved and voice their opinions. But equal respect should be afforded to the industries and cities that actually believe passenger rail service being integrated into Florida is a good thing.

Yes, West Palm Beach is the city designated for the All Aboard rail station. But West Palm Beach is the county seat, is centrally located and in close proximity to Palm Beach International Airport. In the same way all of Palm Beach County benefits from Wellington’s equestrian economy, or Jupiter’s bioscience research hub, or Boca Raton’s technology corridor, all of Palm Beach County will benefit from having an All Aboard Florida station in West Palm Beach.

From my position as a member of the MPO, I am thrilled that we don’t have to use a penny of public dollars other than what our cities need for their application to the federal government to request a quiet zone. And if our federal government can actually make money by loaning All Aboard Florida money instead of spending money, I say that’s smart business.

Life in Florida is pretty good for most of us. Yes, we occasionally have to wait in our cars when a boat lazily passes through a bridge opening; or we wait while a train goes by, but what does it say about our lives if those inconveniences ruin our day?

On the MPO, we measure the public dollar cost against the overall public benefit. If the public benefit to Palm Beach County is greater than the cost, we all support the project no matter if one city might benefit more than another. In this case, the benefits of intercity passenger rail and the future infrastructure it will bring, allowing more commuter rail service on the FEC throughout Palm Beach County, far outweigh the cost to the public.

 

Got more great stuff, will publish SOON.

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