Two Florida counties and two other plaintiffs asked a federal judge to block the use of $1.15 billion in private activity bonds by the owners of Florida's privately run passenger train project.

Indian River and Martin counties contend that All Aboard Florida is not eligible for the PAB financing granted by the U.S. Department of Transportation in a 66-page motion for summary judgment filed Wednesday.

A Brightline passenger train in testing in Miami
Two Florida counties and other plaintiffs want a federal judge to block the issuance of private activity bonds by All Aboard Florida. All Aboard Florida


All Aboard Florida, which has already begun its Brightline-branded train service between Miami and West Palm Beach, plans to finance a portion of its second phase between West Palm Beach and Orlando with the $1.15 billion of PABs.

Federal officials ignored or failed to consider the environmental, public safety, maritime, and environmental impacts the passenger rail project would have on the two counties, and plaintiffs Citizens Against Rail Expansion in Florida, or CARE, and the Indian River County Emergency Services District, according to the motion.

The plaintiffs contend that USDOT and the Federal Railroad Administration simply agreed with information provided by All Aboard Florida instead of addressing their concerns in the Final Environmental Impact Statement and Record of Decision, a move that they said violated the law.

“Even more concerning is the manner in which USDOT relied on AAF to develop responses to concerns raised during the Final Environmental Impact Statement process, a job that rests in the hands of the regulatory officials, not the hands of the company whose project is being reviewed,” said Indian River County Attorney Dylan Reingold. “Instead of putting the well-being of the public first, USDOT bent over backwards to rubber stamp this project with little regard for its impact on the public.”

U.S. District Court Judge Christopher Cooper is presiding in the case, which was filed in the U.S. District Court for the District of Columbia.

Cooper also presided in a 2015 federal suit brought by the two counties, in which he issued a first-of-its kind ruling that said the counties proved that the USDOT bond allocation should have been considered in a federal review process under the National Environmental Policy Act.

The 2015 case was eventually dismissed after AAF restructured its PABs with approval of the USDOT to remove the financing for Phase 2, which is the segment where Indian River and Martin counties are located.

After USDOT approved a new bond allocation for Phase 1, the counties and CARE filed a new federal suit in February.

In Wednesday’s filing, the plaintiffs contend that the USDOT’s bond approval violated the NEPA because federal authorities failed to take a “hard look” at the relevant environmental issues and the adverse impacts on the human environment, and they failed to identify and evaluate reasonable alternatives and mitigation measures.

They also contend that in approving the bond allocation federal officials exceeded their authority under the Internal Revenue Code because the only passenger railway projects entitled to issue PABs under the code are “high-speed intercity rail facilities” that reach 150 mph, and that the counties have not approved the use of PABs for Phase 2 as required by the code.

The top speed of the train is expected to be 110 mph from West Palm Beach to Cocoa, and 125 mph from Cocoa to Orlando, the filing said.

The counties and CARE said in a press release that their motion disputes the theory used by USDOT and AAF that the passenger train project qualified for bond financing because “just one dollar in Title 23 funds spent on different surface transportation projects allows any project – even an entire passenger railroad – to be eligible for PABs.”

“Not one dollar in Title 23 funds was ever spent on the AAF project itself,” the release said. “It was the Florida East Coast Railway and not the AAF project that received funding under Title 23.”

The USDOT’s motion for summary judgment is due to be filed Aug. 15. AAF’s motion is due Aug. 22.

AAF, which is owned by Fortress Investments Group, is attempting to create a privately funded and operated passenger train service, the nation’s first in decades, across Florida

The company recently submitted a proposal to the Florida Department of Transportation to lease the right of way to build a third phase between Orlando and Tampa.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.