State financing authority votes to issue $1.75B in bonds for All Aboard Florida

August 5, 2015

A private corporation planning a 235-mile passenger rail system from Miami to Orlando has been given the green light by a state financing authority to fund the project through the sale of tax-exempt bonds.

All Aboard Florida sought and won approval Wednesday from the board of the Florida Development Finance Corporation (FDFC) to sell $1.75 billion in municipal bonds to finance its $2.5 billion project. The FDFC voted in favor of the application around 9 p.m. following an all-day hearing, and will act as a conduit bond issuer despite opposition from some local governments in the Treasure Coast and some acknowledgment that the unrated bonds carry heightened risk to the buyers.

All Aboard Florida has until Jan. 1 to issue the bonds, and still must clear some additional hurdles with the state. The company is also fighting a federal lawsuit by Martin and Indian River counties seeking to stop the bond issue. But, after the Federal Railway Administration published a final environmental study Tuesday, the FDFC vote was perhaps the last major bureaucratic step toward financing a project that has been touted by local, state and federal politicians as a major step forward for Florida’s mass transit.

As planned, the intercity rail project would run 32 trains each day to and from downtown Miami and a station at Orlando International Airport by mid-2017, attracting what the company estimates will be 5.4 million riders annually by 2020. Each train, currently being manufactured by Siemens, would be about 900 feet in length and run at speeds faster than 100 miles per hour. All Aboard Florida projects yearly revenues of $300 million from ticket sales, which executives say will be comparable in price to driving a car.

Proponents say the trains will take as many as 3 million cars off the road.

 

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