All Aboard, federal officials move to end lawsuit over rail bonds



The U.S. Department of Transportation has withdrawn its 2014 approval granting All Aboard Florida’s Brightline permission to sell up to $1.75 billion in tax-exempt bonds to pay for the rail project, a move federal officials now argue makes a lawsuit filed by opponents of the train service moot.

In court documents filed Monday, the U.S. Department of Transportation said it withdrew its original approval this month, and instead granted All Aboard provisional permission to move forward with a smaller bond sale.

The original sale would have paid for the second phase of Brightline’s project, connecting West Palm Beach to Orlando. The new sale will be limited to the rail venture’s first phase between Miami and West Palm Beach.

Martin and Indian River counties filed suit last year over the original bond sale, arguing that federal officials violated the National Environmental Policy Act when they approved the tax-exempt bonds before an environmental study of the rail project’s second phase was complete.

The U.S. Department of Transportation on Monday asked a federal judge to dismiss the case, saying the financing shift has resolved the dispute since the second phase of the project will no longer be included in the bond sale.

Court documents show All Aboard filed an application with the U.S. Department of Transportation in September requesting permission to move forward with the smaller, $600 million bond sale.

All Aboard’s president Michael Reininger pointed to improving economic conditions, adding that a smaller “targeted” sale would be easier to market.

“Since December 2015, we have been monitoring the status of the markets and evaluating potential options for an offering of (tax-exempt bonds),” Reininger wrote in Sept. 30 letter to federal transportation officials. “We are pleased to report that market conditions relative to bond financing began to improve earlier this year and have continued to improve, to the point that we now believe we can conclude an initial offering of (tax-exempt bonds) on favorable terms in the near future.”

In the letter, Reininger said the company planned to consider a second, $1.15 billion bond sale to help pay for rail work between West Palm Beach and Orlando.

“Within the next several weeks, we will separately discuss a new request for an allocation of up to $1.15 billion in (private activity bond) authority for Phase II,” Reininger wrote to federal transportation officials.

In a statement released Tuesday, a citizens group opposing the project said the financing shift was “visible proof” that efforts to block the rail project are working.

“They have no obvious way to fund Phase 2,” Citizens Against Rail Expansion in Florida said. “…They aim to repackage their offer, but pouring bad wine into new bottles doesn’t make it taste any better. It remains to be seen whether the investor community will back even this more limited financing activity. ”

Construction on the first phase of Brightline’s service, which includes three stations and track work between Miami and West Palm Beach, is 70 percent complete, company officials have said.

Brightline’s first train is expected to arrive in South Florida by the end of the year.


Reader Comments


Next Up in Business

Trump slams Boeing deal for new Air Force One
 President-elect Donald Trump on Tuesday called for the government to cancel a deal with aircraft manufacturer Boeing for development of the...
Trump invites tech leaders to roundtable next week
President-elect Donald Trump has invited technology industry leaders to a roundtable next week in New York.
Supreme Court sets tough insider trading rule
WASHINGTON -- The Supreme Court sought to crack down on insider trading Tuesday, ruling unanimously that tips passed between relatives and friends...
Trump's tariff tweets. What can he really do?
 In 2009, President Obama raised tariffs on car tires made in China, charging that domestic competitors were hurt by imports.
Ikea expands parental leave to all U.S. workers
 In a workplace trend that's gaining traction, the U.S. division of Swedish furniture maker Ikea says it will expand paid benefits up to four months...
More Stories

You have reached your limit of free articles this month.

Enjoy unlimited access to myPalmBeachPost.com.

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of free premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and bonus content- exclusively for subscribers. Starting at just 99¢ for 8 weeks.

X

Welcome to myPalmBeachPost.com

This subscriber-only site gives you exclusive access to breaking news, in-depth coverage, exclusive interactives and bonus content.

You can read free articles of your choice a month that are only available on myPalmBeachPost.com.