All Aboard Florida, Miami to Orlando railway, picking up speed

Building a new passenger rail system in the United States is a delicate balancing act. The public’s transit needs, the cost and financing, the impact on the environment and the repercussions for the taxpayer create a complicated puzzle of challenges that require a careful give-and-take approach to achieve an effective project that satisfies all the parties involved.

Some rail systems never work without huge costs to the taxpayer, and Southeast Florida’s Tri-Rail is a good example. Most business leaders in this part of Florida have come to realize that Tri-Rail is a bottomless pit that gobbles up public money like black holes gobble up stars.

all aboard 1But now, Florida has a significant rail company with a familiar name that has jumped into the competition, and it has the experience and the potential to get it right. That company is Florida East Coast Railway, and its project is called All Aboard Florida. It is a very different animal from TriRail.

The project has Florida East Coast Railway planning a major expansion to create a new passenger service from downtown Miami to Orlando, with two stops in between — in downtown West Palm Beach and in Fort Lauderdale.

The biggest plus: All Aboard Florida is a private-sector initiative, so all decisions will be based on free-enterprise economics and top-quality business planning, without being a drain on taxpayers. The new rail line will create a significant economic impact for affected counties, in terms of jobs, construction and operations. Tax revenues to local and state governments are estimated at $200 million over six years.

Financing will include a mix of equity and debt. A chunk of the initial capital is expected to come from a federal Railroad Rehabilitation and Improvement loan, which would be backed by private equity collateral. The long-term loan would be repaid over time, with interest, from revenues generated by the rail system.

The Federal Railroad Administration has already found that the most concentrated point of the rail line will have “no significant impact” on area communities, and All Aboard Florida expects the line to relieve about 3 million cars from Florida roads each year.

In early April, I conducted a survey of 55 business leaders in Palm Beach County, asking two questions:

  • Do you agree or disagree with the rail project going forward?
  • Do you agree or disagree that limited public money ought to be provided by local governments for safety upgrades and quiet zones?

Respondents were also asked to explain their answers, so the responses were quite varied. Nearly two out of three (63.2 percent) supported the project, while 13.1 percent answered “maybe.” One out of five disagreed with the project, and two respondents had no position. As to the question about local public money, 13.1 percent generally agreed taxpayer dollars should be spent, and an equal percentage said public money should be “limited.” Another 30.5 percent wanted no public money to be spent, but 39 percent had no position or needed more information to answer. Four percent gave no answer.

It was clear that a strong majority of business leaders favored All Aboard Florida’s project. When it came to private vs. local public funding, many needed more information, but comments showed a strong indication that some local government funding was OK but that it should not be a significant part of the funding.

We live in an incredibly interconnected and increasingly crowded world. Every new shopping center, subdivision or office building and, yes, every new railroad crossing may slightly inconvenience some small segment of the population. But that is the price for economic growth. The alternative is stagnation and an injured tax base. Let’s figure out a way to make this passenger rail service work, because the long-term benefits will be enormous, and the taxpayer won’t get stuck with the operating costs.


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John R. Smith


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