Brightline seeks $1.15B in bonds
Financing group’s plan to meet in Jacksonville criticized by rail foes.
All Aboard Florida’s Brightline will ask a state financing group Monday for permission to issue $1.15 billion in tax-exempt bonds to help pay for the construction of the second phase of its passenger-rail project connecting West Palm Beach to Orlando.
The Florida Development Finance Corp. has called an emergency meeting in Jacksonville to discuss Brightline’s request, a move that is drawing fire from opponents of the rail project who argue that the public hasn’t had enough time to review the bond issue.
Opponents have also questioned why the Orlando-based finance corporation is holding the meeting two hours away in Jacksonville.
In a letter sent to FDFC officials Thursday, a coalition of Treasure Coast opponents asked the corporation to postpone its meeting and move the location to a site closer to Brightline’s planned route.
“It is highly prejudicial to conduct a meeting concerning the issuance of $1.15 billion in bonds 150 miles from the closest point of the proposed project,” attorneys representing Martin and
Indian River counties and Citizens Against Rail Expansion in Florida wrote. “This is highly suspicious considering the meeting is being conducted far away from the FDFC offices, which do lie near the location of the proposed project. Please be aware that in determining the location of a meeting you must consider the interests of the public in having a reasonable opportunity to attend.”
The Florida Development Finance Corp. is a special financing unit created by the state Legislature in 1993 to help businesses and nonprofit groups finance capital projects that promote economic development. The finance corporation acts as a conduit, issuing both traditional and tax-exempt bonds on behalf of borrowers.
Tax-exempt bonds have advantages for borrowers because they typically are more appealing to investors and have lower interest rates than bank loans.
The FDFC issued a public notice Wednesday announcing Monday’s meeting, however more detailed information about the agenda item was not available, a spokesman for the financing corporation said Thursday.
In a statement Thursday, Brightline said it was moving forward with the bond request to “preserve the optionality of utilizing this financing tool for the project.”
Tax-exempt private activity bonds like those being sought by Brightline had been targeted for elimination under the House version of the Republican tax plan being discussed by federal lawmakers.
Brightline’s request comes less than two months after the financing corporation signed off on the sale of $600 million in tax-exempt bonds to help pay for the private rail venture’s first phase connecting West Palm Beach and Miami.
That decision also raised questions from opponents, who said they learned about the meeting 72 hours before the board’s vote.
Brightline has said it plans to launch service by the end of 2017. But with just over two weeks left until the new year, the company has not announced its schedule or ticket prices.
According to an analysis of Brightline’s $600 million bond issue, the company expected to start shuttling passengers between West Palm Beach and Fort Lauderdale this month, with service to Miami set to begin in the first quarter of 2018.
In anticipation of its launch, Brightline began simulated service last week, running multiple trains a day along the Florida East Coast Railway line. The trains are not carrying passengers.
Eventually, Brightline plans to extend its service north to Orlando. That extension has faced opposition from residents on the Treasure Coast.