Rich Campbell: All Aboard Florida’s pending deadline to sell bonds is meaningless and movable

Posted on December 21, 2015

By Rich Campbell of TCPalm

Don't you hate deadlines?

The word connotes finality. When confronting a deadline, you and I must take action or pay a penalty

For example, the deadline for open enrollment to obtain medical coverage under the Affordable Care Act is Jan. 31.

The deadline to file your federal tax return next year is April 18. (It is three days later this year because Washington D.C. will be commemorating a local holiday, Emancipation Day, on Friday, April 15.)

College students and their parents face a June 30, 2016, deadline to file a federal financial aid application.

And so it goes.

Generally, if you miss a deadline you pay some sort of penalty. Penalties can run the gamut from additional costs — such as those incurred when filing a late tax return — to forfeiting the chance to obtain health insurance, student financial aid or other forms of government assistance.

However, there is a different set of rules for a private corporation seeking to complete a major transportation project — one that fits nicely into the federal government's long-term plan to expand passenger rail service.

In this real-world scenario, a deadline is meaningless and movable.

All Aboard Florida — aka Brightline — is facing a Jan. 1 deadline to sell $1.75 billion of tax-exempt bonds to help finance its Miami-to-Orlando passenger rail project. The rail company has requested an extension from the U.S. Department of Transportation, which allocates bonds for such projects.

Is there any doubt the Department of Transportation will extend the deadline?

None whatsoever.

If you're pinning your hopes of stopping the project on the expiration of the Jan. 1 deadline, prepare to be disappointed. The federal government has been greasing the skids for this project from the beginning. Uncle Sam isn't about to let something as benign as a deadline get in the way.

Remember: The Department of Transportation moved the original deadline from July 1 to Jan. 1. No doubt it is poised to extend the deadline again.

Several factors have frustrated All Aboard Florida's efforts to sell the bonds in a timely manner. These include the size of the offering and a slowdown in the corporate bond market.

The rail company needs more time to market and sell the bonds. And the federal government is philosophically obligated to comply with the request.

Lest we forget, the U.S. Department of Transportation is operating in accordance with the National Rail Plan, which it drafted in 2009. One of the goals of the plan is "to connect communities with high-speed and intercity passenger rail where population densities and competitive trip times create markets for success."

Ten potential high-speed corridors received special designation from federal officials. The Miami-Orlando-Tampa route is one of them.

Bottom line? The federal government is predisposed to help facilitate the All Aboard Florida project, which is slated for completion in late 2017. And selling these bonds is a critical financial component of the project.

Three things we know with certainty:

The sun will come up tomorrow.

With 32 daily trains and no train stops planned for our region, All Aboard Florida is a bad deal for the Treasure Coast.

The Department of Transportation will extend the company's deadline to sell the bonds.

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