All Aboard’s Brightline renews push for tax-exempt bonds
Posted on November 1, 2016
By Jennifer Sorentrue
All Aboard Florida’s Brightline has renewed its push to sell millions in tax-exempt bonds to help pay for its proposed passenger train service connecting South Florida to Orlando.
The Coral Gables-based company first sought permission to sell $1.75 billion in tax-exempt bonds in 2014, but the tight municipal bond market forced officials to shelve the sale last year.
In court documents made public Tuesday, All Aboard officials said they want to scrap the original sale, and instead move forward with a smaller bond issue that would be easier to market to potential buyers.
The request is drawing fire from Treasure Coast officials, who filed suit last year to block the original $1.75 billion bond sale.
Martin County officials on Tuesday filed court documents urging a judge to move forward with the suit, saying the All Aboard’s funding shift was designed to avoid a “judicial determination” in the case.
In court documents, federal officials have argued the bond change would render the lawsuit moot.
A spokeswoman for All Aboard Florida declined to comment Tuesday, citing the “active litigation.”
Court documents show All Aboard filed an application with the U.S. Department of Transportation in September requesting permission to move forward with a smaller, $600 million bond sale. The company said it planned to use the money to help pay for the first leg of its project connecting West Palm Beach and Miami.
All Aboard’s president Michael Reininger pointed to improving economic conditions, adding that a smaller “targeted” sale would be easier to market.
“Since December 2015, we have been monitoring the status of the markets and evaluating potential options for an offering of (tax-exempt bonds),” Reininger wrote in Sept. 30 letter to federal transportation officials. “We are pleased to report that market conditions relative to bond financing began to improve earlier this year and have continued to improve, to the point that we now believe we can conclude an initial offering of (tax-exempt bonds) on favorable terms in the near future.”
All Aboard Florida won preliminary approval from the Department of Transportation in December 2014 to issue the private activity bonds. The company was initially given until July 1 , 2015 to complete the sale. In May 2015, All Aboard announced it was seeking an extension of the July 1 deadline, and the company ultimately was given until Jan. 1, 2016 to finalize the sale.
All Aboard asked for a second extension late last year, and was given until Jan. 1, 2017 to complete the sale.
Martin and Indian River counties filed federal lawsuits last year against the U.S. Department of Transportation, challenging whether All Aboard Florida is eligible for the private activity bonds. All Aboard Florida is an intervenor in the suit.
The counties have argued that federal officials violated the National Environmental Policy Act when they approved the tax-exempt bonds before an environmental study of the rail project’s second phase was complete.
According to court documents filed Tuesday, the U.S. Department of Transportation’s Council on Credit and Fiance could consider All Aboard Florida’s new bond request at a Nov. 16 meeting. In its application, All Aboard said it hoped to issue the bonds in November.