Instead of using a Railroad Rehabilitation & Improvement Financing loan from the Federal Railroad Administration for the second phase, the company now says that they determined to pursue Private Activity Bonds, which are tax-free and privately financed. Since they are sold to private investors, the company says that taxpayers won’t be taking on any risk of a default. The PABs would either replace or reduce a potential RRIF loan, which was originally expected to be $1.6 billion.
Despite the change in financing, opposition groups north of Palm Beach are continuing to fight the project over traffic, safety and noise concerns that they say would disrupt their way of life way while bringing no benefits.
From the All Aboard Florida website:
All Aboard Florida successfully secured private financing for the first phase of the project earlier this year. We have therefore determined to pursue private debt financing for the remaining capital needed.
All Aboard Florida hopes to utilize an existing program, Private Activity Bonds (PAB), which are designed to encourage private companies to invest in public infrastructure. A PAB allocation would represent an alternative plan to finance the project and would replace or substantially reduce the current Railroad Rehabilitation and Improvement Financing (RRIF) request. Investors in PABs are private entities, therefore, this financing mechanism poses zero risk to the local, county, state or federal governments.