Robert Poole, Jr., a trusted and well-respected, transportation analyst, released an independent assessment of the All Aboard Florida project, presenting a fair and balanced review of the planned service, while addressing recent claims. Poole, a Searle Trust Transportation Fellow and Director of Transportation Policy for the Reason Foundation, reported his analysis of the All Aboard Florida project in the most recent issue of the organization’s newsletter, Surface Transportation Innovations. (For the complete article, please visit: http://reason.org/news/show/surface-transportation-news-129).
“I have been generally supportive of the effort by a division of the company that owns and operates the Florida East Coast Railway to develop the first private-enterprise higher speed passenger rail service,” said Poole. “My assessment at this point is that this still looks like a worthwhile effort to re-introduce passenger rail service on a commercial basis.” (Note of clarification: Poole is referring to All Aboard Florida, the intercity passenger rail project being developed by Florida East Coast Industries Inc. (FECI) – owner of Florida’s premier passenger rail corridor.)
“We appreciate Bob Poole’s thorough and impartial review of All Aboard Florida as it provides greater clarity on those aspects that continue to be misunderstood, while reinforcing the facts about the project,” said P. Michael Reininger, President and Chief Development Officer, All Aboard Florida.
Specifically, Poole’s analysis of All Aboard Florida focused on the following:
Fiscal Viability of the Project: According to Poole, All Aboard Florida has identified a market niche where fast (up to 125mph) passenger rail is quicker than auto travel and less of a hassle than air travel. Further, Poole states, FEC Railway’s ownership of the right of way and tracks, makes it “plausible” for All Aboard Florida to have no need for government subsidies or grants. Lastly, Poole explains the project “represents an excellent case of ‘value capture’” based on the revenue it can expect to receive from the real estate investments surrounding its Miami, Fort Lauderdale and West Palm Beach stations. (Note of clarification: All Aboard Florida is leveraging the existing corridor, an irreplaceable railroad property and asset assembled by FECI more than 100 years ago.)
RRIF Loan and Project Financing: Poole also describes the “propaganda” surrounding the planned enhancements to the rail infrastructure for the new service as a means to support increased freight operations, as “ill-informed”. Explains Poole, “FRA loans already go to freight railroads for track and rolling stock investments, so there was no need to create a passenger rail service in order to get RRIF loans.”
Further, Poole states, “FRA’s application guidelines ask the applicant to spell out the collateral being offered to back the loans, and AAF has announced that it is putting up rolling stock, tracks, and right of way.” In addition, Poole points out, “It is very standard for railroads and other infrastructure companies to finance major projects with a mixture of debt and equity, with All Aboard Florida’s 80% debt / 20% equity structure being a typical ratio for large infrastructure projects.”
FDOT Grant for Orlando International Airport: As stated by All Aboard Florida and various other community leaders and elected officials, Poole confirms the legislature’s FDOT budget approved earlier this year is for the airport and its long-planned multi-modal terminal, and is earmarked specifically for the airport project. The state grant is not being provided to build an All Aboard Florida station, rather the passenger rail service will occupy space as tenant, with a lease agreement at fair market rates that the airport will use to help repay the grant to the state.
Poole’s report also reminds local communities that roadway owners (not the railroad) are usually required to fund grade crossing enhancements and upgrades that impact noise and safety. However, All Aboard Florida stated in September of last year that it will cover the safety improvement costs for all of the grade crossings along the corridor, saving local governments tens of millions of dollars. All Aboard Florida is also planning improvements to bridges, which All Aboard Florida has stated will actually help create greater operating efficiencies.
About Robert Poole, Reason Foundation
Robert Poole is Director of Transportation Policy and Searle Freedom Trust Transportation Fellow at Reason Foundation. Poole, an MIT-trained engineer, has advised the Ronald Reagan, the George H.W. Bush, the Clinton, and the George W. Bush administrations. Reason Foundation produces respected public policy research on a variety of issues and publishes the critically-acclaimed Reason magazine. Reason Foundation's nonpartisan public policy research promotes choice, competition, and a dynamic market economy as the foundation for human dignity and progress. Reason produces rigorous, peer reviewed research and directly engages the policy process, seeking strategies that emphasize cooperation, flexibility, local knowledge, transparency, accountability and results. Through practical and innovative approaches to complex problems, Reason seeks to change the way people think about issues, and promote policies that allow and encourage individuals and voluntary institutions to flourish.
About All Aboard Florida
All Aboard Florida is an intercity passenger rail project being developed by Florida East Coast Industries, Inc. (FECI) — owner of Florida’s premier passenger rail corridor — that will connect Miami to Orlando with intermediate stations in Fort Lauderdale and West Palm Beach. This rail service will give Floridians and visitors a viable transportation alternative to congested highways and airport terminals. All Aboard Florida will provide a high‐quality experience for passengers and will be the first privately owned, operated, and maintained passenger rail system in the United States. For more information, visitwww.AllAboardFlorida.com.
About Florida East Coast Industries
Florida East Coast Industries, LLC (FECI) is one of Florida’s oldest and largest full-service commercial real estate, transportation, and infrastructure companies. Headquartered in Coral Gables, Fla., FECI has a rich history dating back over a century. Mr. Henry Flagler first established a predecessor company in 1892, which became a pioneer in the development of Florida's eastern coast. Today, FECI continues to transform Florida as the parent company to four distinct business lines including Flagler, a full-service commercial real estate company; All Aboard Florida, the United States’ first privately owned and operated intercity passenger rail system; Flagler Global Logistics, an integrated logistics company that offers a wide range of logistics services and real estate solutions; and Parallel Infrastructure, a leader in third-party Right of Way (ROW) investments and management services. FECI is owned by private equity funds managed by affiliates of Fortress Investment Group, LLC. For more information, visit www.feci.com.