Construction is under way between West Palm Beach and Orlando on the $4 billion second phase of Florida’s privately owned passenger train project, company officials said.
Service on the 170-mile extension is expected to begin in 2022, according to Patrick Goddard, president of Virgin Trains USA, formerly Brightline.
“Connecting central and south Florida will bring thousands of jobs,” Goddard said. “By modernizing infrastructure, we will strengthen Florida’s economy for decades.”
Five companies, including a joint venture of three firms, have been selected to upgrade and lay new tracks, a process the company said is expected to generate more than 10,000 jobs and $650 million in federal, state and local tax revenue.
Part of the work on the West Palm Beach-to-Orlando segment is being financed with $1.75 billion of tax-exempt private activity bonds that the Florida Development Finance Corp. issued on behalf of Virgin Trains USA on April 2.
The deal, which closed on April 18, is also funding or reimbursing costs on the first phase between Miami and West Palm Beach, which has been in operation for a year. Some $600 million of bonds refunded debt issued in 2017.
Some 67 orders were received, oversubscribing the deal by two times. Morgan Stanley was the sole underwriter.
On April 5, the FDFC board voted to issue another $950 million of PABs for the company. Officials haven’t indicated when they will be sold.
Proceeds will be used as completion financing for the passenger train project, FDFC financial advisor Jeff Larson told the board at the meeting.
All of the PABs awarded to the company were approved by the U.S. Department of Transportation’s Build America Bureau. The $950 million of unsold bonds must be issued by June 30, according to a deadline set by the USDOT.
The new project is still in a ramp-up period. Service between West Palm Beach and Fort Lauderdale began in January 2018, and service to Miami was added in May 2018.
Virgin said 71,308 passengers rode its trains in April, generating $1.8 million in total revenue, according to a report to investors.
“Daily trips by commuters and frequent business travelers continued to grow in the month of April, while leisure-oriented ridership was lower due to lower seasonal event activity,” the report said. “In addition, we ran a reduced train schedule to allow for installation of signaling system upgrades associated with federally-mandated positive train control.”
Year-to-date, 315,486 passengers have used the trains in south Florida, bringing $7.7 million of total revenues, according to the report.
In May, Virgin Trains said it began offering cruise packages that allow riders to pay to park at company-owned garages, check luggage and board a train for the nearest port. Passengers get from the train stations to the port via Lyft’s ride-sharing service.
The company said it has signed marketing agreements with two cruise lines, and expects to announce additional agreements soon.
“We believe the cruise-related business will drive significant ridership growth over time,” the April investor’s report said. “Furthermore, we are in advanced discussions to establish additional stations in our south segment system between Miami and West Palm Beach that we expect will also increase ridership.”
In the area currently serviced by Virgin Trains, there are major cruise ports near its train stations in Miami, Fort Lauderdale and West Palm Beach.
The company is still negotiating to lease the right of way in order to extend its service from Orlando to Tampa.
