News Column

Railroad execs debate Indian River County Commissioners during sold-out event

August 14, 2014

By Henry A. Stephens, Treasure Coast Newspapers, Stuart, Fla.



Aug. 14--VERO BEACH -- It's illogical to think All Aboard Florida would seek a $1.6 billion federal loan, and spend "hundreds of millions" of its own money, on passenger-rail improvements just to add more freight trains to the Florida East Coast Railway, All Aboard President Michael Reininger told the audience of a sold-out debate Wednesday.

But Indian River County Commissioner Bob Solari countered that it's even less logical to suggest that Florida East Coast Railway, the freight line, wouldn't be "much more profitable" after All Aboard upgrades the corridor and adds a second track from Miami north to Cocoa.

The two traded arguments at the Vero Beach Country Club before 150 members and guests of the Taxpayers Association of Indian River County.

Association President John Kistler said it was his group's largest turnout ever.

During the debate, Reininger argued that All Aboard would profitably link Miami and Orlando without federal grants, while Solari accused the company of speaking in "half-truths."

At one point, Reininger responded to what he called a "conspiracy theory" that Fortress Investment Group -- which holds Florida East Coast Industries, Florida East Coast Railway and All Aboard Florida in its portfolio -- had begun the passenger-rail project mainly to enable more freight trains.

"If the whole reason for spending billions were just to lower our debt and add more freight, why wouldn't the freight rail company apply directly (for federal loans)?" he asked. "The answer is freight doesn't need additional capacity."

Solari said All Aboard Florida would, indeed, be getting federal subsidies through a 5.75 percent interest on its federal loan. A commercial loan would have cost the railroad 12 percent, he said.

"Over 35 years, that difference would mean a $3.1 billion savings," Solari said. "If that's not a subsidy, why are they hiding it?"

Solari said he has never seen an "investment-grade business plan" from Fortress or All Aboard Florida, despite making requests.

Reininger said Solari and others continue claiming they had a right to see confidential business information.

Solari said he could accept the claim of confidentiality if there were no federal funds involved.

After their presentations, Solari and Reininger answered audience questions submitted in advance. One asked Solari why he and other Indian River commissioners initially were for All Aboard Florida but have changed to a neutral position.

Solari said he favored the project when it was billed as fully private, but not after learning it has asked for a $1.6 billion federal loan.

Even if All Aboard Florida agreed to build a station in Indian River County, he wouldn't change his personal opposition, Solari said.

"(For a station), they need density, like Palm Beach, Fort Lauderdale or Miami," he said. "This community doesn't want that kind of density."

Reininger said All Aboard Florida must get up and running, and then study Indian River County's potential ridership, before considering a station here.

Multimedia journalist Arnie Rosenberg contributed to this report.

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(c)2014 the Treasure Coast Newspapers (Stuart, Fla.)

Visit the Treasure Coast Newspapers (Stuart, Fla.) at www.tcpalm.com

Distributed by MCT Information Services


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Source: Treasure Coast Newspapers (Stuart, FL)


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