Dive Brief:
- Virgin Trains USA, formerly Brightline, could soon begin construction on its $4 billion, 170-mile rail expansion from West Palm Beach to Orlando, Florida, thanks to a $1.7 billion private activity bond sale last week.
- Morgan Stanley was underwriter for the sale, one of the largest ever of its type, and 67 investors took part. Construction "will begin imminently" on the line, which will terminate at an intermodal facility at Orlando International Airport's new South Terminal, according to the rail operator.
- Construction of the privately financed rail is expected to create more than 10,000 jobs and generate $650 million in federal, state and local tax revenue.
Dive Insight:
Virgin’s approach to financing the West Palm Beach to Orlando extension is likely the kind of private investment President Donald Trump hopes will make up the difference on his $1 trillion to $1.5 trillion infrastructure plan. In his most recent budget submission to Congress, he proposed a federal infrastructure investment of $200 billion, with state and local agencies left to finance the rest.
Brightline and Virgin announced their partnership, rebranding and Virgin’s minority investment in November. The shift, according to a company press release, does not appear to change previous plans for a high-speed connection between Orlando and Tampa, as well as a railway between Las Vegas and Southern California, both privately financed.
About the same time last year that Brightline and Virgin were working on their new deal, the Florida DOT gave the rail company permission to negotiate land leases along the Orlando-Tampa line's rights of way for land owned by FDOT and the Central Florida Expressway Authority. The high-speed rail line would start at the Orlando airport and follow the Interstate 4 corridor into downtown Tampa. The line would use three stations, with a possible fourth somewhere near Walt Disney World. Construction alone is expected to inject $2.4 billion into the Central Florida economy, with another roughly $1 billion to follow after the line begins operations. Construction would create more than 16,000 jobs.
In September, Brightline announced its plans to buy XpressWest's high-speed rail project between Victorville, California, and Las Vegas. XpressWest essentially abandoned the project in 2016 after its plan to manufacture rail cars in China ran afoul of U.S. Buy American requirements.
At the time of Brightline’s purchase announcement, the company said it would tackle the project in phases, the first one being a 185-mile segment along Interstate 15 that would eventually extend to Los Angeles. The rail company also planned on building an intermodal station and mixed-use development on 38 acres next to the Las Vegas Strip.
