TC Palm: Treasure Coast faces an uphill battle against All Aboard Florida

Posted on June 15, 2015

Lisa Broadt

One month before facing All Aboard Florida in a Washington, D.C., courtroom, Martin and Indian River County officials described their fight to temporarily block tax-exempt funding as pivotal to stopping the passenger rail project.

“If the bonds are sold, then the merits of our case would be meaningless,” Indian River County Attorney Dylan Reingold said. “The case is done the second the bonds are issued.”

Now the counties are facing a new reality: A court ruling Wednesday may allow All Aboard Florida to sell $1.75 billion of private-activity bonds as early as June 22. And other strategies in what seemed to be an arsenal stocked with legal arguments are facing new complications.

Still, officials say they are optimistic.

Citizens group CARE FL on Friday said it’s prepared to fulfill its promise of legal action if the government does not address problems in a federally-required draft environmental impact report released in September.

The report — paid for by All Aboard Florida and released by the Federal Railroad Administration — must remedy local concerns about the $3 billion Miami-to-Orlando rail project’s effect on the environment, public safety and quality of life, according to CARE Chairman Bill Ward.

“It will be interesting to see how (the railroad administration) handles the over 12,000 public comments,” on the draft report, Ward said. “How that’s handled, and what the report says, will determine what arguments we could raise.”

But CARE FL — which has collected more than $1 million for potential legal action — may have to go to court to have its concerns heard.

A 30-day comment period that CARE and other officials said they would use to respond to the final report is not guaranteed; federal agencies may solicit input from members of the public but are not required to, according to the federal Council on Environmental Quality.

It’s unlikely that All Aboard Florida would have to revise the final report, according to Michael Cole, railroad administration spokesman.

“We don’t anticipate a supplemental EIS” for the All Aboard Florida project, Cole said.

The three Treasure Coast counties, as well as CARE, say the focus of their legal arguments is shifting to procedural problems within the Florida Development Finance Corp., the quasi-governmental agency that would issue the tax-exempt bonds.

Earlier this year the corporation was temporarily disabled after its board was found to be improperly constituted. Several of its decisions, including preliminary agreement to issue All Aboard Florida’s bonds, were deemed invalid.

The counties last week filed “point-of-entry” documents that lay the groundwork for formal complaints with the state.

But the development finance corporation is not All Aboard Florida’s only option financing.

Certain quasi-governmental agencies, counties, municipalities and some private enterprises can issue tax-exempt bonds, so long as they aid “public interest.”

Switching conduits might delay the project but could allow All Aboard Florida to sidestep the alleged conflicts of interest and procedural problems that have swirled around the finance corporation for nearly six months.

All Aboard Florida did not respond to a request for comment.

Treasure Coast officials also emphasize that — despite the time crunch — they may appeal U.S. District Court Judge Christopher Cooper’s ruling that Indian River and Martin counties failed to meet the legal standard needed for a temporary injunction.

Cooper, in a 21-page ruling, said the counties failed to prove that blocking the bonds could stop All Aboard Florida, which last month said it has access to alternative funding sources and could proceed without tax-exempt bonds.

Yet, these issues are surmountable, according to Stephen Ryan, Martin County’s outside counsel.

“The case is not over in Washington. Judge Cooper didn’t dismiss us, he didn’t say that we can’t prove our argument. He said we need to overcome the one issue,” Ryan said.

All Aboard Florida’s claim to have funding options could be a crucial element of an appeal.

“The truth is they absolutely are dependent on government financing,” Ryan said.

And yet, the clock is ticking, and an appeal could take months, according to Josh Gellers, University of North Florida assistant professor of political science and public administration.

“The counties must file an appeal after the judgment is officially entered,” Gellers said, “and this could be as late as six months after the initial decision.”

The first phase of All Aboard Florida’s 235-mile project — from Miami to West Palm Beach — already is under construction and is to begin service in early 2017. The second phase — from West Palm Beach and nonstop through the Treasure Coast to Orlando International Airport — is to begin running in late 2017.

All Aboard Florida plans 16 round trips daily.

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