The TC Palm: Martin County sues U.S. Department of Transportation to stop All Aboard Florida funding

Posted on April 28, 2015

Lisa Broadt

Martin County has made good on a promise to take its All Aboard Florida battle to the courtroom.
The county filed a lawsuit Monday in federal court, arguing that the U.S. Department of Transportation made several mistakes when it approved $1.75 billion dollars of state-issued, tax-exempt bonds for All Aboard Florida. The county is asking the court to nullify that approval and permanently block DOT from approving private-activity bonds for All Aboard Florida.


DOT unlawfully sidestepped the National Environmental Policy Act — approving the bonds without ensuring the rail project would be compatible with nearby communities — and incorrectly interpreted a statute meant to fund highways, not railroads, according to court documents.


Its “improper, unjustified and unlawful” actions are intended to “ensure that (All Aboard) goes forward at all costs,” according to Martin County’s lawsuit, which names the U.S. DOT, Transportation Secretary Anthony Foxx and Undersecretary Peter M. Rogoff.


The private railroad company’s $3 billion project would send 32 trains daily along the Florida East Coast Railway corridor as part of its Miami-to-Orlando high-speed passenger service.


All Aboard Florida is relying on the tax-exempt bonds to fund many of its planned infrastructure improvements.
None of the bond money, however, would be used for improvements or equipment on the Treasure Coast, and it’s unclear how much weight Treasure Coast comments would hold with the Florida Development Finance Corp., the quasi-governmental agency that would issue the bonds.


Martin County in its lawsuit apparently attempts to skirt that obstacle by naming co-plaintiffs who reside in Palm Beach County — where bond proceeds would be spent.


All Aboard Florida could result in traffic tie-ups near railroad crossings, noise pollution and environmental damages that pose serious quality-of-life concerns to Jupiter resident Thomas Hewitt and V. Michael Ferdinandi of Palm Beach Gardens, according to the suit.


Hewitt has been active with CARE FL, a citizens group that opposes All Aboard Florida.
Parts of Martin County’s suit follow language used by Indian River County in its lawsuit against Rogoff, filed March 31.


Indian River County, also on Monday, asked a judge to consider its case as soon as possible and, in the meantime, to block issuance of the private activity bonds, according to court records.


Indian River’s lawsuit did not name All Aboard Florida. On Monday, however, All Aboard Florida asked the court to allow it to support DOT by joining the case as a voluntary defendant. Indian River County, in court documents, said it reserves the right to challenge All Aboard Florida’s request.


All Aboard Florida does not comment on pending litigation, spokeswoman Lynn Martenstein said.
The Indian River County Commission earlier this year pledged $2.7 million and the Martin County Commission pledged $1.4 million to fight All Aboard Florida. The St. Lucie County Commission in March found $500,000 in its budget that could be used to fight All Aboard Florida in the next budget year, but has not yet filed any legal action.


Meanwhile, Bloomberg Business reported that All Aboard Florida’s existing debt — the $405 million in high-risk bonds it sold in June — has lost more than 7 percent of its value since the bonds were sold.
All Aboard paid a 12 percent interest rate on 5-year bonds when they were sold. According to Bloomberg, the bonds’ price fell to a record low of 93.5 cents on the dollar by April 1 from $1.03 in June, pushing the yield to 14.7 percent, a level typically associated with distressed securities.

Click here to view original article