Brightline gets approval for $1.15 billion in tax-free bonds for expansion to Orlando

Lisa Broadt | Treasure Coast Newspapers

Show Caption Hide Caption Video: Brightline train moves quickly through Boynton The orange Brightline train is seen traveling through Boynton Beach on Thursday, Jan. 18, 2018. Brightline trains can reach speeds of up to 79 mph south of West Palm Beach and up to 110 mph through the Treasure and Space coasts.

ORLANDO — Brightline got the OK Wednesday to borrow $1.15 billion through tax-free bonds, financing that could speed the railroad’s progress into the Treasure Coast and Space Coast.

The Florida Development Finance Corp. unanimously approved the private-activity bonds, over the objections of numerous Treasure Coast officials who attended the 3½-hour meeting to protest the controversial funding.

It’s the second time the state board approved bonds for Brightline's West Palm Beach-Orlando segment. The agency first approved $1.75 billion of bonds in August 2015, but the railroad canceled that request and instead sought separate approvals for $600 million for phase 1 and the $1.15 billion approved Tuesday for phase 2.

Passenger-rail service between Miami and West Palm Beach began earlier this year, and rail construction north of West Palm Beach — and on to Orlando International Airport — is to begin within months, officials have said.

While the bond approval is a major setback for opponents, it likely is not a surprise. The U.S. Department of Transportation authorized the bonds in December, and the Florida Development Finance Corp. has received the project warmly.

More: Brightline says it might pursue Treasure Coast station; 4 cities asked to submit proposals

Board members approved the bonds after more than three hours of public comment and presentations by Brightline and its opponents.

Before voting, board members acknowledged the Treasure Coast’s concerns, but ultimately said their focus must remain on the project’s statewide economic impact.

“There’s compelling evidence that this is economic development for the state of Florida,” board Chair Daniel Davis said.

“I don’t have control over you guys talking,” he added about the fight between Brightline and the counties. “I have control over whether to be the conduit (bond) issuer.”

In opening remarks, Brightline President Patrick Goddard told the board Brightline is committed to working with the Treasure Coast.

“We’re hard at work at having a more constructive relationship,” Goddard said. “They have important issues. We’ve heard them, and I believe we are addressing them.”

Earlier this week, he said, Brightline revealed it would seriously consider the Treasure Coast for an additional station or stations and said it had specifically reached out to city managers in Fort Pierce, Sebastian, Stuart and Vero Beach.

But state Rep. Debbie Mayfield, R-Melbourne, and Indian River County Attorney Dylan Reingold questioned the sincerity and timing of Brightline's outreach.

“Over three years ago, the FDFC chair… said we’re going to vote for this, but we’re looking to All Aboard Florida to reach out to the counties and work with the counties,” Reingold said, referring to the first bond hearing.

“Three years of silence, then they’re ready to come back before the FDFC and they reach out to us," he said. "I believe if the FDFC were to vote approval today, (Brightline) would go back to radio silence.”

Some Treasure Coast officials also called on the finance corporation to delay its decision while Congress investigates whether Brightline qualifies for the financing.

Earlier this year, at a Capitol Hill hearing before the House Oversight Subcommittee on Government Operations, several congressmen blasted Brightline for circumventing federal law to obtain its private-activity bonds. On Tuesday, Rep. Brian Mast, R-Palm City — who helped set up the hearing — said an investigation by the committee was "ongoing."

Most comments from the public, however, were supportive of Brightline.

Georganna Gillette, Space Coast Transportation Planning Organization executive director, said she sees Brightline as a crucial part of the region’s future transportation.

“Our long-range transportation plan includes passenger rail as part of its vision to enhance public transportation,” Gillette said. “Brightline is the answer to that vision.

"We believe Brightline will have a major, positive impact on our tourism economy,” she added.

Stuart resident Penelope Basset said she, too, believes Brightline will have widespread benefits.

"It's clean, it's efficient and best of all is its customer-service model," Basset said. "It's a win-win."

Brightline has until Dec. 31 to sell the the high-yield bonds to qualified institutional investors, according to the U.S.and the finance corporation.

Brightline began service between Miami and West Palm Beach earlier this year and is to begin full Miami-to-Orlando service in 2021. It already has proposed an extension to Tampa.

Indian River and Martin counties continue to battle the project in U.S. District Court.

More: Report: Gov. Scott, wife invest heavily in parent firm of Brightline, All Aboard Florida