AAF/Brightline August 2016 Update

[spuwho]

Another year has gone by and that promised date for AAF/Brightline to start service in 2015 and come and gone, but they are still moving along and the politics is still heavy on the Treasure Coast.

Here is the latest as of today.

A video summary of construction progress on the new stations.

https://www.youtube.com/v/_vHYRzgnP7U

A video summary of the trainset construction at Siemens.

https://www.youtube.com/v/FmNoU4P3cgA

Judge rules that lawsuit on bonds can continue

http://www.mypalmbeachpost.com/news/business/lawsuit-challenging-all-aboard-floridas-bonds-to-c/nsHN2/

U.S. District Judge Christopher Cooper denied motions to dismiss the case, saying the bonds are key to All Aboard Florida's ability to complete the second phase of the rail line, which will run between West Palm Beach and Orlando on the Florida East Coast Railway tracks. The first phase of the project, between Miami and West Palm Beach, is already under construction.

Martin and Indian River counties filed federal lawsuits last year against the U.S. Department of Transportation challenging whether All Aboard Florida is eligible for the private activity bonds. All Aboard Florida is an intervenor in the suit.

Martin officials on Wednesday called Cooper's decision a "major victory" in the case.

Basically when the judge found out that AAF was only considering the PAB's for financing and nothing else, he ruled to continue the case. If AAF had shown alternative financing (like private), he would have bounced it. Me thinks AAF didn't want to show their hand and will take it to court instead.

"First of all, PAB-based financing is not just the 'current financing plan' for the project - it appears to be the only financing plan," Cooper wrote. "This strikes the court as unusual given the uncertainty surrounding the PAB issue, particularly for a company that has expressed its concern" about keeping the project on schedule and avoiding losses due to delays.

Meanwhile, the FEC says they will upgrade the St Lucie River Bridge and create an app for water traffic to plan their routes around bridge activity.

http://www.tcpalm.com/opinion/editorials/thumb-up-all-aboard-florida-commits-millions-to-upgrade-st-lucie-river-railroad-bridge-3a59e277-2a7f-390609851.html

Train traffic across the aging structure, which is owned by Florida East Coast Railway, is expected to increase significantly late next year when All Aboard Florida begins running 32 passenger trains daily between Miami and Orlando.

"Built around 1938, the St. Lucie Bridge is the only movable bridge along the rail route that is to remain a single-tracked structure under the proposed AAF rail project," according to a Martin County report.

In combination with freight traffic, there might be as many as 50 daily closures at the drawbridge. County officials have raised concerns about the condition of the bridge and lengthy delays for boaters.

Recently, All Aboard Florida announced plans to make "millions of dollars in improvements" to the bridge, "including structural, mechanical and electrical" upgrades.

Company officials also said they might develop a mobile app that would help boaters work around the approximate 20-minute-long closures

.

In the interim, Indian River County lost their lawsuit against AAF in Leon County Court.

http://www.tcpalm.com/news/shaping-our-future/all-aboard-florida/indian-river-county-gives-up-on-one-all-aboard-florida-lawsuit-3905a221-23ed-1ae2-e053-0100007f592e-388878291.html

Indian River County has conceded a loss in Leon County court, one of several legal battlegrounds on which the county is fighting All Aboard Florida.

"We don't agree with the court, but we made the decision to let this one go," Dylan Reingold, county attorney, said Monday about the county closing its Leon County case file, rather than filing an appeal.

In mid-June, Leon County Circuit Judge Charles Dodson dismissed Indian River's action against All Aboard and the Florida Development Finance Corp., the state agency that issued the passenger railroad $1.75 billion of tax-exempt bonds.

The county claimed the finance corporation made procedural errors, and that its decision to issue the bonds would lead to public harm.

But Dodson, in his June decision, found both arguments invalid.

[thelakelander]

The Treasure Coast stuff hasn't stopped Orlando International Airport from moving forward with their terminal:

[spuwho]

I found out this AM that AAF had been seeking bond financing in the 6% range but had no takers.

They bumped it up to 7% and finally 7.5% with incentives for bond holders.  They tried for the first tranche at $1B and $400M for the second, but couldnt gather enough buyers to meet the first offering.

Word is AAF will not reoffer the bonds at 8%, as they consider that too expensive for tax free PAB's.  Its already known that to get more private financing at the 12% rate for those PIK's is out of the question.

They could go back and complete their RRIF application, but that means navigating the political deadlock in Congress and  navigating any special stipulations on getting the dough.

The other option is that they grow AAF organically and provide bus connections between OIA and Cocoa until the political and financial headwaters subside.

Then attempt the financing again before the NEPA has expired.

If Martin and Indian River Counties think that stopping the financing will stop the trains is being misled. The trains can still run to Cocoa for passenger pickup. And they can run that as long as it is profitable.

AAF can wait out the legal issues and then try again later when the financial problems are resolved.

[spuwho]

First Brightline engine off assembly goes into testing at the Siemens plant in Sacramento.

https://www.youtube.com/v/ph9ZC-jmojM

I recently saw a similar version of this Siemens Charger do 125mph during its shake down at the RTC in Pueblo, Colorado pulling a set of MARC bi-levels.

[KenFSU]

Lawsuit gains traction, may jeopardize future of Brightline:

http://www.bizjournals.com/jacksonville/news/2016/09/16/lawsuit-threatens-future-of-miami-orlando-train.html

[thelakelander]

It would be funny if the Treasure Coast actually ended up winning and AAF altered phase II plans by stretching the service into Jax, utilizing existing track.

[spuwho]

Lawsuit gains traction, may jeopardize future of Brightline:

http://www.bizjournals.com/jacksonville/news/2016/09/16/lawsuit-threatens-future-of-miami-orlando-train.html

The only compelling item of this announcement is that the judge agreed to hear it.  This will be the 3rd legal action against Brightline to reach the trial phase, so the fact it will be heard is not condemning in and of itself.

Since no PAB's have been issued, technically no damages have yet to occur. If the DoT approves the final EIS before the bonds are issued and before trial starts, then the case is done and they will have to move to their next legal option.

As I noted above, the trains will still roll from Miami to WPB, and even if the financing falls through, AAF can still bus patrons from MCO to Cocoa to board them.

It merely delays the biz plan, but doesnt end it.