- By Jeff Ostrowski Palm Beach Post Staff Writer
Despite strong opposition from officials in the Treasure Coast, the board of the Florida Development Finance Corp. unanimously signed off on a $1.75 billion bond issue for the Brightline rail service.
Brightline asked the organization to approve a tax-free bond issue that will bankroll its expansion to Orlando.
During a hearing Wednesday in Orlando, proponents and opponents painted vastly different pictures of the private rail service.
Brightline Chief Executive Patrick Goddard and other supporters pitched the rail service as an economic boon and an antidote to gridlock on Florida highways.
“The bonds do not pose any risk to taxpayers,” Goddard said.
But officials from Martin and Indian River counties called the rail service a boondoggle that will spur traffic congestion and create a safety hazard.
“We know if they come through my community at 110 mph, there are going to be more fatalities,” said Peter O’Bryan, chairman of the Indian River County commission. “It’s basically a license to kill for All Aboard Florida.”
While Brightline trains have struck and killed pedestrians and a cyclist in Palm Beach County, many of those deaths have been ruled suicides.
Indian River County Attorney Dylan Reingold noted that Brightline’s ridership numbers have fallen far below its own projections. In a bond document in late 2017, Brightline predicted 2018 ridership of 1.1 million and passenger revenue of $23.9 million. During the first three months of 2018, Brightline said it carried just 74,780 passengers who spent $663,667 on tickets.
“Based upon the economics of the project alone, you should decline to approve these bonds,” Reingold said.
Goddard put an optimistic outlook on the tepid ridership numbers, saying that ticket sales have been increasing. He said focusing on early ridership numbers before Brightline began serving Miami is “out of context and unfair.”
“Every month since we’ve been open, we’ve beaten the previous month in ridership, fares and revenue,” Goddard said.
Reingold also disputed Goddard’s assertion that Brightline is entirely privately funded. For instance, he said, counties and cities will pay to maintain its crossings.
“It’s a private company owned by a Japanese hedge fund,” Reingold said. “It expects Indian River County to pay for the maintenance of its grade crossings for eternity.”
Treasure Coast officials complain that Brightline will speed through the region at 110 mph. In an apparent concession to critics in the region, Brightline said Monday that it wants to open one or more stops in the Treasure Coast.
Brightline began service between West Palm Beach and Miami this year. It hopes to extend service to Orlando, and possibly Tampa, in 2021.
Brightline told bond investors last year that in 2020, it expects to ferry 2.9 million passengers and collect $96 million in fares.
All Aboard Florida, which operates Brightline, is owned by an affiliate of Fortress Investment Group LLC, a global investment management firm. Fortress Investment Group LLC is contracted to manage and advise New Media Investments Inc., which owns GateHouse Media, the parent company of The Palm Beach Post.