BRADENTON, Fla. - Two Florida counties want a federal judge to examine the new bond financing strategy employed by the private developer of a passenger train project in order to evaluate the "full extent" of the proposal.
Attorneys for Martin and Indian River counties contended in court filings Thursday that All Aboard Florida has told them and the court "half of the story" about its planned use of federal private activity bonds to fund two separate phases of the project to link Miami and Orlando.
"It is clear from what little information the defendants have provided that AAF has not abandoned its strategy of financing the project in its entirety with private activity bonds," the attorneys said. "It has merely reshuffled the capital stack to secure that funding in a two-step process in order to circumvent the court's prior ruling in these actions."
The counties, in separate lawsuits, filed motions seeking a stay to conduct a "limited" amount of discovery.
The motions were opposed by the U.S. Attorney General, which represents the U.S. Department of Transportation.
The counties said they are seeking documents about the "looming" $1.15 billion PAB application that would finance the second phase of the project between West Palm Beach and Orlando, which would take the train through Martin and Indian River counties without stopping.
They also requested documents about the first phase of the project from Miami to West Palm Beach, saying they want to ensure that bonds allocated to it would not fund phase two, raising questions about whether phase one debt will be used to finance the trains that would travel the entire 235-mile route.
AAF, a company owned by Fortress Investment Group LLC, recently developed a new plan to finance its Brightline-branded train service in two phases – a plan that AAF and USDOT have said would "moot" or negate a need for a final ruling in the federal lawsuits.
All Aboard Florida requested that USDOT withdraw its original application for $1.75 billion of PABs that would have financed the entire project. That request was granted on Nov. 22.
At the same time, USDOT approved a new, $600 million PAB allocation sought by AAF to fund the first phase of the project between Miami and West Palm Beach, which has received federal clearance under the National Environmental Policy Act.
AAF has said in documents filed with the transportation agency that it would submit a separate application for $1.15 billion of bonding authority to finance the second phase at a later date.
The second phase has not received final federal clearance through the NEPA process.
Attorneys for the counties said in a joint filing that they want to see documents pertaining to the $1.15 billion application "because it goes to the heart" of whether DOT has truly withdrawn the PAB allocation.
The counties said they also want to determine whether AAF and USDOT are attempting to navigate around U.S. District Judge Christopher R. Cooper's Aug. 16 ruling to avoid "a looming adverse final decision."
In the August ruling, Cooper said the counties had proved that the USDOT's bond allocation should have been considered in the NEPA process, a ruling that allowed their lawsuits to proceed.
An ultimate ruling in the counties' favor would be precedent-setting because it would – for the first time - subject USDOT bond allocations to strenuous NEPA reviews.
Cooper's Aug. 16 decision led AAF to bifurcate its bond applications.
AAF and USDOT then filed motions to dismiss the suits, saying they were moot because no financing had been approved for the second phase of the project, which is the subject of both lawsuits.
Both suits have said that a number of environmental, historical and public safety issues were not considered in the NEPA review that was conducted but to date has not been completed.
Assistant U.S. Attorney General John Cruden said Thursday that USDOT had not received an application for $1.15 billion of PABs from All Aboard Florida and the agency opposed the counties' motions.
Cruden also called the bond application "hypothetical" since it had not been received, and therefore a ruling approving discovery would be premature.
AAF did not immediately respond to a request for comment about the motions for discovery.
A company official said Nov. 29 that "AAF remains fully committed to our vision of passenger service between Miami and Orlando and have continued to commit resources and attention to that pursuit."
