AAF goes before the FDFC

[spuwho]

AAF request for the PAB's (private activity bonds) went before the FDFC today in Tallahassee.

As expected, everyone made their case, pro and con included.

Per the TCPalm:

http://www.tcpalm.com/franchise/shaping-our-future/live-coverage-today-aaf-bond-hearing-in-tallahassee_29329488

At AAF hearing, Treasure Coast opposition faces strong support from other regions

TALLAHASSEE — All Aboard Florida would boost the state economy and create jobs, and deserves a nearly $2 billion loan, if you ask the Orlando Magic, Universal Parks and Resorts or officials of Miami-Dade, Broward and Orange counties.

All Aboard Florida will hurt the state economy and its credit worthiness and ruin property values, if you ask Treasure Coast residents and officials in the region's three counties.

That division — no surprise to anyone on either side of the issue — was more than evident Monday during a hearing before the Florida Development Finance Corp. to gather public comment on All Aboard Florida's request to borrow $1.75 billion through tax-exempt bonds to help finance its $3 billion Miami-to-Orlando high-speed passenger railroad.

Over more than four hours, agency staff heard comments from more than 30 people impacted by the project. Comments from Miami-Dade, Broward, Palm Beach and Orange counties were overwhelmingly positive, while all Treasure Coast speakers said the trains would not generate profit to pay off the bonds, hurting the state's credit rating.

All Aboard Florida President P. Michael Reininger said the project "is an economic opportunity that's really born out of demand." The railroad, he said, would tap into the more than 500 million existing annual trips between Miami and Orlando and have a $6.4 billion economic impact on Florida.

"We are very proud of the significant statewide support we received," Reininger said.

Local governments in and around Miami, Fort Lauderdale and West Palm Beach — cities where All Aboard Florida would build elaborate stations — said the project would help develop their downtown areas.

Officials from Brevard County, which supports All Aboard Florida and the bond financing, have said they are trying to identify sites for a potential future stop.

Treasure Coast officials and residents countered, saying the Florida Development Finance Corp., a quasi-governmental agency, shouldn't issue the bonds because the company has failed to disclose financial information, such as how much a Miami-to-Orlando ticket would cost, and because no passenger-rail service in the U.S. is profitable.

"Is the FDFC willing to put the state's stamp of approval on this project when it is a known fact that intermodal rail throughout the nation is heavily subsidized and rarely successful?" asked state Rep. Gayle Harrell, R-Stuart. "Does this commit the state to subsidizing the project down the road?"

All Aboard Florida likely would lose $100 million annually and would have to charge $242 for a one-way ticket from Miami to Orlando, according to a study commissioned by Citizens Against Rail Expansion in Florida, a coalition of Treasure Coast and South Florida communities known as CARE-FL.

If All Aboard Florida defaulted on its bond payments, the state's credit rating, which measures its financial health and creditworthiness, would not be downgraded because the bonds would not pledge state revenues, said Beth Frady, Enterprise Florida spokeswoman.

CARE representatives and other Treasure Coast speakers criticized the Development Finance Corp. for having the hearing in Tallahassee, some 300 miles away from the Treasure Coast people who would be negatively impacted by the railroad. Many of them didn't travel to Tallahassee, thinking they wouldn't be heard in the two hours allotted for public comment, opponents said. The hearing, however, extended over more than four hours and was interrupted for about 20 minutes by a power outage.

Securing $1.75 billion through tax-exempt bonds is crucial for All Aboard Florida. The company would use the money to pay for locomotives, train cars, land acquisition, construction and equipment along much of its 235-mile corridor from Miami to Orlando.

But not in Indian River, St. Lucie and Martin counties.

The Florida Chamber of Commerce and Miami-Dade College were among entities that praised All Aboard Florida, believing it would integrate South and Central Florida and spur economic activity, they said. Palm Beach County Commissioner Priscilla Taylor, a Democrat who announced last month she intended to run for Rep. Patrick Murphy's congressional seat next year, appeared in a video praising the railroad.

New residential development already is planned in downtown West Palm Beach in anticipation to the planned station there, Palm Beach County officials said.

The U.S. Department of Transportation in December provisionally OK'd sale the $1.75 billion in bonds, but the Florida Development Finance Corp. needs to give final approval.

The state agency shouldn't, however, approve the bonds until a lawsuit filed by Indian River County is resolved, said Stephen Ryan, a Washington, D.C., attorney hired by Martin County, which voted this month to also pursue a yet-to-be-filed lawsuit.

Indian River's suit claims the DOT violated federal law by giving its approval before the completion of an environmental impact statement.

Despite the high visibility and high interest in Monday's hearing, no members of the development corporation's board attended. Only the agency's staff and Executive Director Bill Spivey were present.

"CARE invites the board of FDFC to our region to understand the true impact AAF will have on our quality of life," said Brent Hanlon, CARE treasurer.

It's unclear, however, if the Florida Development Finance Corp. must consider Treasure Coast comments at the hearing. Its executive director said previously it cannot consider issues such as safety, traffic, noise and the environment. The agency has "nothing to do with anything other than financing, " Spivey said.

Frady, however, said all comments will be considered by the agency. Moreover, All Aboard Florida, in its application for bond funding, said it planned to spend the money in five of the eight counties along its route, but not in the three Treasure Coast counties.

[spuwho]

In the mean time one of the Florida politicos attempted to undercut AAF in Congress by trying to get amendments posted that would cripple similar loans. I checked and Bill Posey's amendments never exited committee.  The bill he was trying to amend is the same bill that authorizes Amtrak. Corrine Brown and John Mica are the senior Florida representation.

Per "Citizens Against the Train":

https://www.citizensagainstthetrain.com/content/thank-you-posey-fighting-reform-federal-rail-loan-process#.VTXDbiFVhBc

The federal government is viewed by many on the Treasure Coast as an enabler of the All Aboard Florida project.

The very notion the federal government may provide a loan for the rail project is offensive to many Treasure Coast residents.

Recently, U.S. Rep. Bill Posey, R-Rockledge, attempted to reform the federal loan process for railroad projects — a process skewed heavily toward the railroads that often ignores the concerns of local communities.

"The congressman is concerned about how close the Florida East Coast Railway tracks are to neighborhoods and adjacent roads, and how the All Aboard Florida project will affect safety and traffic," said George Cecala, Posey's spokesman who also handles transportation issues. "He also is concerned how taxpayers' dollars are being spent.

"We saw an opportunity to make some corrections."

Consequently, Posey offered three amendments to the Passenger Rail Reform and Investment Act of 2015. The amendments would:

1. Cap the amount for Railroad Rehabilitation & Improvement Financing loans authorized by the U.S. Department of Transportation to a single railroad in a five-year period at $600 million.

All Aboard Florida is seeking to raise $1.75 billion through private activity bonds. But it also has a request on the table for a $1.6 billion federal loan.

2. Prohibit the Department of Transportation from authorizing exempt facility bonds for high-speed passenger rail unless the project meets the definition of "high speed": trains that can attain speeds of 150 miles per hour.

All Aboard Florida, which plans to begin running 32 daily passenger trains between Miami and Orlando in early 2017, has said its trains will reach speeds of 90 to 110 mph — not, technically, high speed.

3. Require the federal government to obtain a resolution of support from each county government through which a rail project will operate before providing a direct loan or loan guarantee.

Two county governments on the Treasure Coast — Indian River and Martin counties — are preparing for a legal battle against All Aboard Florida. Officials with the third, St. Lucie, also have serious concerns.

Unfortunately, Posey's amendments failed.

The congressman is to be applauded for attempting to reform the federal loan process for rail projects. We encourage him to continue fighting to insert these much-needed reforms into federal law.