BRADENTON, Fla. — Private passenger train developer All Aboard Florida could close on $1.75 billion in tax-exempt private activity bonds on or after June 8, its attorneys told a federal judge during a hearing last month.
The date is the first detail known about the potential schedule for issuing the bonds. It was revealed in an April 28 conference call with U.S. District Judge Christopher Cooper, who is presiding in separate federal lawsuits filed by Florida's St. Lucie and Martin counties.
The suits challenge the USDOT's largest-ever private activity bond allocation. The litigation is also the first to ever contest a federal PAB allocation.
"We've talked to All Aboard Florida about this, and they're agreeing to stipulate that they will not close on the sale of any bonds until close of business -- until after the close of business on June 8," said AAF's attorney Cynthia Taub, with Steptoe & Johnson LLP, according to a transcript of the April 28 hearing.
She said AAF must get final approval for the bonds to be issued from the Florida Development Finance Authority, the conduit issuer. FDFC has scheduled May 28 for its board to consider the bond resolution.
The FDFC "may or may not decide the issue at the meeting, so at this point we don't know the outcome or the timing of the FDFC decision, but that is an intermediate step that the issuance of the bonds is contingent on," Taub said.
Even if the FDFC approves the bond resolution there are "many other subsequent steps" that need to occur before the bonds are sold, she said.
Bryan Cave LLP partner Philip Karmel, who represents St. Lucie County, said that he believed the critical date is May 28 when the FDFC considers authorizing the bonds to be issued.
Karmel asked that a hearing be scheduled before May 28 on the county's request for a preliminary injunction "so that the Florida Development Finance Corp. knows whether the bond issuance is going to be enjoined or not before the bonds actually are marketed to investors and orders are placed on those bonds."
Martin County's attorney Stephen Ryan, a partner at McDermott, Will & Emery, said that he wanted a portion of the county's case to be expedited because it alleges that the USDOT granted All Aboard a private activity bond allocation under a statute that does authorize PABs for passenger trains.
Ryan said an extended briefing schedule could be accommodated if All Aboard were to ask the FDFC to reschedule the May 28 meeting for a later date.
"And let me just say, we believe that it's a kangaroo proceeding anyway," Ryan said, referring to the upcoming FDFC board meeting.
Judge Cooper scheduled a hearing for May 29 on requests for preliminary injunctions filed by both counties.
AAF, a subsidiary of Florida East Coast Industries, plans to run 32 passenger trains a day on a 235-mile route between Miami and Orlando.
On May 5, the St. Lucie County Commission voted to take $500,000 from emergency reserves for its "All Aboard Legal Defense Fund." The county had already spent $15.479.
St. Lucie is working with other counties on a joint analysis and defense related to the pending release of the federal environmental impact statement for the AAF project.