P. MICHAEL REININGER

Editor’s Note: By P. Michael Reininger, President and Chief Development Officer of All Aboard Florida

We continue to read a stream of similarly worded criticism about All Aboard Florida, the express, intercity passenger rail service advancing toward a service start between Miami and West Palm Beach by the end of 2016 and connecting onward to Orlando in early 2017. Misconceptions and untruths about the project have catapulted it into the headlines and onto the minds of some along the rail corridor. Special interest groups have poured their time and resources into perpetuating inaccurate and fearful notions rather than engaging with our company to learn the truth or participate in productive dialogue. When provided with the facts, fears are allayed and the numerous positive impacts of this project become evident -and so in that spirit we offer the following.

To begin, safety is our unwavering first priority. Our very success depends on a safe and reliable performance on the railroad. For this reason, every grade crossing along the corridor will be upgraded, and these improvements will be paid for entirely by All Aboard Florida. This will create the safest railroad in the country, with adherence to the highest standards of safety recommended by all the relevant oversight agencies for the operation of our system. Absent All Aboard Florida and its investment, these improvements will not happen, and the current freight service will operate into the future on the system as it is today.

The investments made by All Aboard Florida will also pre-fund the majority of the costs typically associated with improvements needed to implement quiet zones. These quiet zones would eliminate the need for trains to utilize horns as a public safety warning. This project represents a once in a lifetime opportunity to realize this community benefit at the lowest possible cost, in the quickest possible time and in the easiest way. In addition, All Aboard Florida has expressed willingness to assist with managing the needed engineering, bidding and construction management of the improvements as evidence of our commitment to supporting the realization of this benefit.

Second, definitive statements that claim that no passenger rail services operate profitably are simply not true. Europe has many profitable passenger rail services, like the Eurostar and other services operated by private companies on routes that share many characteristics with our plan. In the United States, the Amtrak Acela service in the northeast corridor connects New York, Boston and Washington, D.C., and is profitable when segregated from the rest of the public subsidized system. For All Aboard Florida, the magic is in the formula, including the following factors: the market size (linking the seventh largest county in the U.S. to our most visited city); the near total reliance on congested roadways as the only real transportation option; our ownership of an irreplaceable right of way; and the billions of dollars in previous investment made into the corridor, which significantly reduce the additional investment we need to make. This unique mix of circumstances is fundamental to our investment thesis.

Third, the notion that our business is some sort of Trojan Horse designed really to result in additional freight capacity in the corridor is illogical and just plain silly. Florida East Coast Railway (FECR) and Florida East Coast Industries are independent companies. They do not share legal structure, organization, management or any participation from operating results of their separate businesses. All Aboard Florida and its investors are injecting millions of dollars of private capital into our non-freight investments including stations, land, a vehicle maintenance facility for passenger trains, and the purchase of a fleet of all new trains. The remainder of our investment accommodates the incremental capacity required to handle our additional passenger traffic. Adding freight capacity is fully within the rights and abilities of FECR without any of the machinations of building a passenger service and could be financed through the same sources without risking the passenger investment.

Fourth, despite assertions to the contrary, our critics have offered no evidence of any negative affect on surrounding property values. As reported recently in the Palm Beach Post, there are in fact many studies and historical examples that support the premise that property values proximate to rail station locations (up to a one-mile radius) in fact increase. In other recent reports, passenger rail traffic has not been shown to negatively affect property values for proximate property, especially where the train corridor predates the existence of the adjacent property, which is precisely the case for our century old right-of-way.

Fifth, the already completed Environmental Assessment for our first phase examined the grade crossings that exist in the most heavily developed portion of our system, where the traffic volumes and density of crossings are the highest. The results of this analysis concluded no significant impact to traffic, service or public safety as a result of the addition of 32 passenger trains. Why? Well, these trains are shorter, lighter, faster and significantly quieter than freight trains. It is also due to the fact that the proposed improvements to the signal and communication systems on the railroad and the increased operating efficiency that will occur as a result of our investments create minimal time and frequency impacts at these crossings. It stands to reason, that when the same analytical methodology is applied to crossings with less traffic and less development- that even less impact will result. To better understand, during the operating hours for our system and because of the speed and size of the trains, anyone traversing the corridor has about a 97 percent chance of never even encountering a passenger train. If they do, the duration of the encounter is less than 60 seconds, which accounts for warning time, gate closure, train passage and subsequent gate re-opening.

Finally, the Railroad Rehabilitation and Improvement Fund (RRIF) program is a loan, not a grant. It is fully underwritten by the Federal Railroad Administration and their third party advisors. The financial viability of the business must withstand comprehensive scrutiny. It is a collateralized (secured) loan, backed by the liquidation value of assets pledged by our company and forfeited to the lender in the case of default. The program was specifically designed to incentivize projects exactly like All Aboard Florida that deploy private capital to improve railroads. By reducing the cost of interest, companies can invest more on assets that create value and improvements to the country’s infrastructure. Moreover, the program specifically looks for projects that also create economic development, improve railroad safety, and generate environmental benefits, all of which are central tenets of our investment. For all of these reasons, we believe All Aboard Florida is an ideal candidate for this fully appropriated and long standing program. Meanwhile we have raised all the needed capital through private funding to pay for Phase One and construction has begun. Once the Environmental Impact Statement process is completed and the Federal Railroad Administration issues a Record of Decision, construction will start on Phase 2, connecting to Orlando.

Indian River County benefits greatly from the development of All Aboard Florida. This project will generate more than $192 million in economic impact for the county and create almost 400 jobs during construction. It will also generate millions of dollars of new tax revenue to local, state and federal coffers. Whether these taxes offset costs for existing public services or help fund new costs, all Florida residents will benefit from these funds. Most importantly, this transportation backbone will provide new economic and tourism opportunities and set the stage for possible future expansions which can only exist after our initial phases are completed.

As you view the continued rhetoric we expect from our critics, do so in the context of these realities and hold all voices in the debate to the same standard of accountability we readily accept. While we are all entitled to our own opinion, we are not afforded our own set of facts. Don’t accept accusations absent evidence or conclusions not supported by truths and logic. We remain resolute and committed to the truths that make All Aboard Florida a necessary step toward a sustainable and future focused Florida.