Apparently some in Florida were uncomfortable with the much touted "privately funded railroad" using a $1.6 billion Federal Railroad Administration loan, so All Aboard Florida applied for tax exempt bonds to supplement or replace the loan.
"The U.S. Department of Transportation has provisionally approved $1.75 billion in private activity bonds for All Aboard Florida, an unprecedented amount and a move that reduces a major financial obstacle for the express passenger rail line," writes Kimberly Miller, Palm Beach Post staff writer. Unlike a federal loan, these bonds place all liability on the bond issuer, Coral Gables-based Florida East Coast Industries, owner of the new rail line.
A final approval for the bonds is conditional on All Aboard Florida completing an environmental review process which closed for public comment earlier this month. If granted, it would be the largest amount of private activity bonds awarded any single entity.
The project's environmental impact statement, a requirement of the National Environmental Policy Act (NEPA), was published by the Federal Railroad Administration (FRA).
The bonds are needed in part to pay off "$405 million in private high-risk bonds" used for current construction between Miami and West Palm Beach, writes Miller. "Trains between Miami and West Palm Beach are expected to be running in late 2016, with the second phase [from West Palm Beach to Orlando Airport] opening in early 2017."
While All Aboard Florida trains are frequently described as "high-speed," including by Planetizen, the trains will be diesel-powered, running at a maximum speed of 125 mph, depending on the section.
The nation's two true high-speed trains being developed are in Texas, with an opening date of 2021, and California, scheduled to begin operation in 2029.
Hat tip to Heather Caygle of POLITICO Morning Transportation.
Read the full story: Feds give All Aboard OK to issue $1.75 billion in tax-exempt bonds
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