ORLANDO, Fla. — All Aboard Florida, builder of a privately owned passenger train line, plans to quickly sell $1.75 billion of private activity bonds after a winning a key vote sealing the deal late Wednesday.
Conduit issuer Florida Development Finance Corp. unanimously approved the bond documents authorizing the financing for the 235-mile intercity express train between Miami and Orlando.
All Aboard is a "beneficial project clearly in line with the objectives of the FDFC," AAF president Michael Reininger said after the vote.
The determination, however, came after hundreds of public commenters spoke to the FDFC board during an eight-hour meeting — the longest ever held by the agency, according to its director, Bill Spivey.
"Despite the compelling, heartfelt, and hard-hitting testimony from residents from the Treasure Coast and north Palm Beach regions, the FDFC Board has voted as expected approving an almost $1.8 billion tax-free windfall to All Aboard Florida," said Brent Hanlon, a Jupiter resident and treasurer of Citizens Against Rail Expansion, or CARE.
Many speakers supported the project, including a host of state and federal elected officials. They said the new train route would bring needed relief to clogged south Florida highways and modernize transportation in the Sunshine state.
"It is a free enterprise solution to a growing problem — mobility," said state Rep. Bob Cortez, R-Maitland.
State Rep. Gayle Harrell, R-Stuart, said her constituents in Martin and St. Lucie counties are being negatively impacted by the project. They will experience the impact of the All Aboard Florida trains without benefiting from any stops.
"I question the solvency of these bonds," Stuart said. "Don't do this to Florida."
Some elected officials from Martin, Indian River, and St. Lucie counties said they would incur additional costs for train crossing maintenance, and that emergency services would suffer delays.
Many speakers said the project would bring jobs, increase tourism, and provide alternative travel for businesses.
The FDFC board members, who were appointed earlier this year, said the passenger train system clearly met the agency's objectives — to finance projects that develop infrastructure, create jobs, and support economic development.
"Clearly, the applicant qualifies for private activity bonds," said chairman Frank White, who added that he received "hundreds of emails," and had read them all.
White asked AAF officials to "redouble efforts" to work with the counties that believe the project will have a negative impact on safety and other issues of concern.
"I am convinced there is an economic development impact for Florida," said vice chairman Daniel Davis.
All Aboard Florida will issue 30-year bonds with a mandatory tender in 10 years, using proceeds to fund construction, establish a debt service reserve, and pay capitalized interest, according to James Calpin, a managing director at Bank of America Merrill Lynch and senior managing underwriter for the deal.
Approval of the bond resolution and related documents allows underwriters to "begin the marketing process in earnest," he told the FDFC board.
Other firms in the syndicate are JPMorgan, Morgan Stanley & Co., and Piper Jaffray.
The primary market for the debt is expected to be high-yield tax-exempt bond investors who are qualified institutional buyers, he said.
"We are looking to target a marketing process followed quickly by pricing," Calpin added.
All Aboard Florida officials declined to say when the bonds would price. However, bond proceeds cannot be spent within a 45-day period after the release of the final environmental impact statement.
Federal Railroad Administration late Tuesday released a 646-page FEIS, a process under the National Environmental Policy Act that drew more than 15,400 comments. The FRA said about 9,500 comments were generally opposed to the project and 5,960 were supportive.
Some speakers on Wednesday claimed that the FEIS contains "catastrophic errors," particularly in studies low-balling the amount of boating traffic to be impacted by trains delaying bridge openings.
While there was no mention of ongoing litigation at Wednesday's meeting, federal lawsuits filed by Martin and Indian River counties challenging the U.S. Department of Transportation's private-activity bond allocation are pending.