Wednesday, April 22, 2015

Update - All Aboard Florida

While events have come to pass since my 2012 posting, none of such has wavered my contention that no train will ever turn a wheel for a private sector operator's own account.

First however, I'd like to update a point made at the 2012 posting from which I have backed away; I no longer believe that the owners of the Florida East Coast Railway, reportedly Fortress Investment Group through a maze of subsidiaries, are considering a sale of the railroad to another party such as a public agency

I have found myself leaning away from my earlier contention that AAF was simply a ploy to "fatten up the steer" for a sale of the FEC Ry. to a public agency, as the railroad, while making money on railroad operations, was being buried under debt service costs from a leveraged buyout. Within such a transaction, the equity once held by shareholders is converted to debt so that the remaining shareholders (usually "closely held") will either make "heap big wampum" or "loose their shirts' eliminating the middle ground. Now I have learned that FEC is doing so well that it is making money even after its debt service costs, and I'm certain that the closely held group wishes to maintain its ownership.

It is undisputed that the FEC, through one subsidiary or the other, still holds valuable tracts of land - especially the six or so acres in Downtown Miami that once was the site of their station. After laying dormant for some fifty years used only as a parking lot, the owners have now decided to develop that property into a mixed use facility. Touting that there will soon be a high speed Orlando-Miami rail line terminating in the building's basement, can only help stir up interest in the development. Of course, when the rail service becomes stillborn, as I still believe will be the case, the interest, and tenancies, have been stirred up and signatures obtained on the leases.

This is not the first time in history that passenger trains have been used to stir up public interest. That started with Henry Flagler, continued with Robert R. Young, and now the latest being this All Aboard Florida whatever.

Finally, I would like to share at this blog the passing of Randolph R. Resor which occurred shortly before Thanksgiving 2013. Randy responded to posts at this blog, as well as at several other rail related public forums under the name of Nellie Bly. I had the honor to know Randy face-to-face; and I hope that he is resting in the peace he so justly deserves.