The Real Deal Miami

Brightline wins seven-month extension for tax-exempt bond issue

The U.S. Department of Transportation extended the deadline for a $1.15 billion bond issue to finance Brightline's expansion to Orlando
June 02, 2018 09:00AM

Brightline arrives at MiamiCentral Station (Credit: Charles Trainor Jr./ Miami Herald)

Brightline got  seven-month extension from the U.S. Department of Transportation (DOT) to issue more than $1 billion in tax-exempt bonds to finance the passenger train operator’s expansion to Orlando.

Brightline began operating between West Palm Beach and Fort Lauderdale in January and expanded its service to Miami in May.

The company plans to start carrying passengers between South Florida and Orlando International Airport in 2021.

The DOT had authorized Brightline to issue $1.15 billion of private activity bonds by May 31.

But after Brightline requested more time, the DOT extended the deadline for the $1.15 billion bond issue until Dec. 31.

The extended deadline disappointed critics who questioned the propriety of tax-exempt financing for a private passenger train service.

Five congressmen had asked DOT officials to suspend their approval of the $1.15 billion bond issue.

One of the critics, U.S. Representative Brian Mast, R-Palm City, said Brightline’s request for more time to issue the bonds shows that Brightline’s private business is dependent on public subsidies.

Brightline already has issued $600 million in tax-exempt bonds to finance the development of its South Florida service.

While working on the bond issue, Brightline also is applying for $1.75 billion in federal financing for its expansion to Orlando in the form of a Railroad Rehabilitation & Improvement Financing loan. [Palm Beach Post] – Mike Seemuth