Call to Action: Perhaps NOT Your Last Your Last Opportunity to Comment on Why PAB’s Should Not Be Approved for AAF.

call-to-action

PHYLLIS FREY, A PROMINENT VERO BEACH ACTIVIST FOR FREEDOM and a well-known opponent of the All Aboard Florida Project, recently emailed this letter to as many people as possible.

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Phyllis Frey

The following letter was sent to our publicly elected officials, our legal representative, the press, and the CEO of the Florida Department of Finance Corporation by Susan Mehiel. I believe Susan speaks for all of us who are concerned about the devastating negative impacts All Aboard Florida will have upon our southeast Florida communities, and what we can do to stop it:”

“As you may know, AAF’s request for $1.75 billion in tax-exempt Private Activity Bonds will come before the FDFC Board on August 5th at 1 p.m. in Orlando at the Doubletree Inn, 60 S. Ivanhoe Blvd.

The FDFC/FRA/FEC/AAF and the Executive branch of government joined hands and turned their backs on us in support of AAF. We the people have been excluded from the process. Our 12,000 comments in the Draft Environmental Impact Statement have been (illegally) ignored. AAF is not eligible for the PAB’s, and they have not provided a business plan that proves a return on investment. The PAB’s will be used for a real estate play by the sister company FECI. The Project is now the subject of two lawsuits in federal court.

THIS IS A CALL TO ACTION!!! August 5th will be the last opportunity the public will have to comment on why the PAB’s should NOT be approved for this project. Indian River, St. Lucie and Martin counties are organizing a caravan to Orlando for residents. I urge you to join with me and others who will be driving and volunteering to ride-share. More information will be posted soon on the www.citizensagainstthetrains.com You can call me at 772-713-0909 for more information about ride-share.”

This may NOT be the last opportunity, because of this email to Phyllis from Bill Spivey, Executive Director of the Florida Development Finance Corporation:

“I can understand your frustration with the project given the amount of correspondence we have received from you and others in opposition to the project. Those comments were collected at the TEFRA Public Hearing held in April and via email. They were forwarded to the FDFC Board. At the request of Representative Mayfield, there will be an equal amount of time of 40 minutes for AAF and the three county opposition group to speak. In addition, there will be the customary  General Public Comment time after these two presentations.

Please keep in mind the the FDFC is not a State Agency or division of Enterprise Florida. The bonds are not backed by tax-payers, but solely repayable by the revenues generated by the project. Highly sophisticated institutional investors would be the only ones buying the bonds, but they must perform their own due diligence and assess the risk of buying them.

The EIS is addressed in the Private Activity Bond Allocation letter by USDOT.  Bond proceeds cannot be used until 45 days after the EIS is final.

Also, the FDFC Board is not approving the project. It is only voting to either approve or not approve the documents necessary to provide one type of financing used to fund the project “(Emphasis added.)

Thank you again for your questions and I hope my responses have provided clarity.

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Bill Spivey, Executive Director of FDFC

Maybe, if according to Mr. Spivey, the August 5, 2015 meeting is only to vote to either approve or not approve the documents necessary to provide one type of financing used to fund the project, this will NOT be the last opportunity the public will have to comment on why the PAB’s should NOT be approved for this project.

THIS SHOULD BE A SEPARATE ARTICLE:

In preparation for the August 5, 2015 FDFC meeting, Mr. Spivey wrote a memorandum dated August 5 (isn’t today August 2) to the FDFC Board of Directors entitled “Project Summary and Salient Features Overview.”

In his memorandum he wrote about what the collateral for the AAF Private Activity Bonds would be, as follows:

“Along with affiliated parent company’s cash contributions of est. $ 802 million ($ 685 million for rail related projects and est. $ 175 million for separate rolling stock project of $ 417 million), AAF and affiliated companies contributing as collateral to Collateral Agent and Trustee around $ 21 million in land and an est. value of $ 550 million in easements, for a total cash and asset contribution of approximately…$ 1.413 billion.”

But what was the collateral for the $ 405 million in debt as noted below?

June 17 (Bloomberg) — All Aboard Florida, a unit of Fortress Investment Group LLC, issued $405 million of debt to help finance a high-speed railway along the state’s eastern coast over the opposition of some local residents. AAF Holdings LLC sold 12 percent, five-year bonds with a payment-in-kind toggle option, which allows interest to be paid in additional notes, according to data compiled by Bloomberg. The PIKs, one of the riskiest forms of debt, yielded 10.25 percentage points more than similar-maturity Treasuries. AAF increased the offering from $390 million previously marketed.

Will AAF be using PAB’s to pay off that debt to wipe out that collateral?

One thought on “Call to Action: Perhaps NOT Your Last Your Last Opportunity to Comment on Why PAB’s Should Not Be Approved for AAF.

  1. Pingback: “AGENCY ADVISOR: OK AAF BONDS” | Vero Communiqué

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