June 24--If All Aboard Florida were to default on its mammoth federal loan, it wouldn't necessarily mean the end of passenger-train service between Miami and Orlando.
Along with its shiny new trains and the second track it plans to build along most of its Miami-to-Cocoa corridor, All Aboard Florida would put up as collateral its rights to run passenger service on the Florida East Coast Railway right of way.
All Aboard Florida, a $2.25 billion project, would provide high-speed passenger service between Orlando and Miami. After selling more than $400 million in bonds last week, the railroad plans to begin construction on its southern section -- from Miami to West Palm Beach -- soon. It plans to be in full operation by 2019.
But controversy remains, much of it centered in the Treasure Coast. Opponents cite potential safety hazards, maritime delays at key bridges and additional costs to local governments for crossing upgrades and maintenance.
If the railroad receives its $1.5 billion loan and can't pay it off, the federal government could sell the collateral, including the exclusive right to run passenger service on those rails.
All Aboard Florida owns "the permanent, perpetual and exclusive rights, privileges and easement over and across all of the real property within FECR's main line right of way located in Florida for passenger rail purposes," according to a private investors document obtained exclusively last week by the Scripps/Tampa Tribune Capitol Bureau.
The Federal Railroad Administration is considering All Aboard Florida's application for a Railroad Rehabilitation & Improvement Financing loan.
It's unclear if the 40 miles of new right of way All Aboard Florida plans to build between Cocoa and Orlando -- along the Beachline Expressway to Orlando International Airport -- also would be put up as collateral. All Aboard Florida representatives could not be reached for comment.
In fact, All Aboard Florida and its predecessor company have owned the exclusive right to run passenger service since late 2007, according to Bob Ledoux, senior vice president and general counsel of Florida East Coast Railway.
After Fortress Investment Group bought Florida East Coast Industries, it kept all real estate operations with Florida East Coast Industries and put all railroad operations with Florida East Coast Railway, Ledoux said. In late 2007, he said, the parent company provided an easement to a subsidiary, later renamed All Aboard Florida, giving it exclusive rights to passenger traffic and the right to build a second track along the existing corridor.
A sharing arrangement already is in place between All Aboard Florida and Florida East Coast Railway, Ledoux said. All Aboard Florida would build and own the second track, and both railroads would share them.
Under the arrangement, Florida East Coast Railway would maintain both tracks and dispatch both railroads, he said.
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