Stanford Erickson: Dual Strategy Needed to Beat All Aboard Florida

 

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DELAYING THE FINANCING OF ALL ABOARD FLORIDA’S 235 MILE PASSENGER SERVICE BETWEEN MIAMI AND ORLANDO THROUGH LITIGATION IS WORKING AND NEEDS TO CONTINUE.

The Indian River County Commission on February 2, 2016 approved spending a portion of the $2.7 million approved last year to fight the building of the rail service by hiring the Miami-based land use and environmental law firm John Shubin & Bass.

On Feb. 9, the Martin County Commission approved allocating up to an additional $850,000 to legally challenge the high-speed rail system. Martin County commissioners last year approved allocating $1.56 million to delay the construction of a rail system that cuts through the heart of the Treasure Coast.

To date, no buyers have agreed to purchase any of the $1.75 billion tax-exempt bonds needed by All Aboard Florida to finance the project.

As eminent a Wall Street guru as Carl Icahn, who incidentally is the owner of the prestigious Grand Harbor residence in Vero Beach, has repeatedly said over the past few months that purchasing tax-exempt bonds is highly risky given the current national and international economic environment.

CARL ICAHN

Underwriters have been marketing the bonds since August, 2015. The bonds would be issued by the Florida Development Finance Corporation.

However, the sale of the bonds need approval from the U.S. Department of Transportation, the federal governmental agency that oversees private activity bonds. The Department of Transportation agreed to a six-month extension to sell the bonds last July and in January, at the behest of All Aboard Florida, provided another extension until January 1, 2017.

As Treasure Coast Newspapers’ excellent reporter Lisa Broadt pointed out in her coverage of All Aboard Florida on February 6, extended litigation by the Mayo Clinic and local residents “indefinitely delayed” the Canadian Pacific Railway’s plan to run 34 coal trains a day through the middle of Rochester, Minnesota. All Aboard Florida proposes running 16 high-speed passenger trains northbound and 16 high-speed passenger trains southbound through the Treasure Coast each day.

Delays are working, but for this effort to be successful the commissioners of Indian River and Martin counties need to not just litigate, they need to bring to bear their political clout. The only way to divert the passenger trains and East Coast Railway’s freight tracks — yes, the freight tracks as well — away from the Treasure Coast to a new freight and passenger rail system west of Interstate 95 would be to have Governor Rick Scott champion that project. Tearing up the freight rails and developing that premium-priced land would help pay for relocating all rail lines in the Treasure Coast west of I-95.

The Treasure Coast needs a dual strategy — one that Florida East Coast Industries, which owns the freight and proposed passenger line, can live with and support. We need our commissioners to inform the governor that if he ever wants to be a U. S. senator from Florida, he will need the votes of Treasure Coast residents. If Gov. Scott continues to support All Aboard Florida’s attempt to ram the high-speed rail system through our communities, his future political career in Florida is headed for a train wreck.

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As a journalist, I covered railroads for some 20 years. A high-speed passenger service between Miami and Orlando can never be profitable. Bond buyers understand that, too. But if one is built, within a few years it will need the state to subsidize the passenger service or Florida East Coast Industries will discontinue the service and run freight on those passenger rail lines.

That is the true end game, in my opinion, for New York City’s Fortress Investment Group, which owns Florida East Coast Industries. Movement of freight between Miami and Orlando, given the widening of the Panama Canal to handle huge Panamax container ships, is expected to double freight traffic within four years.

Stanford Erickson is a resident of Vero Beach. He is a 35-year member of the National Press Club. His website is www.StanfordErickson.com.

One thought on “Stanford Erickson: Dual Strategy Needed to Beat All Aboard Florida

  1. Pingback: All Aboard Florida/Brightline Information | Vero Communiqué

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