"The All Aboard Florida project is actually overseen by two companies: All Aboard Florida -- Operations LLC and All Aboard Florida -- Stations LLC. The former owns the easement right to develop and operate passenger rail service in the existing rail corridor. The latter owns much of the land for the stations in downtown Miami, Fort Lauderdale, and West Palm Beach. Both companies are wholly owned subsidiaries of Coral Gables-based Florida East Coast Industries (FECI). In turn, FECI, along with the Florida East Coast Railway LLC (FEC), is owned by “investment equity funds managed by affiliates of Fortress Investment Group LLC,” according to the AAF website. (Fortress Investment Group is a large New York City investment-management firm, the first hedge fund in the U.S. to trade publicly.) Translation: The various components of the business are separate legal entities. Besides tax benefits and regulatory and creditor protections, the structure also helps facilitate the potential sale of one component of the company. And the likelihood of a sale is exactly what skeptics like Gilbert B. Norman are warning against. Norman is a retired Chicago CPA and former senior internal auditor at the Chicago, Milwaukee, St. Paul & Pacific Railroad. He writes about “news, analysis, and commentary on passenger trains and train travel in the United States” at ridingmytrain.blogspot. “Quite simply,” he states, “there will never be a passenger train operating over the Florida East Coast Railway for their own account.” Norman believes that All Aboard Florida was created by Fortress Investment Group to, shall we say, entice the state to buy the FEC rail corridor, which Fortress owns. “[All Aboard Florida] simply generates public visibility,” he writes, “so that when the private equity concern that owns FEC approaches a public agency, such as the state, to buy the [corridor], all this public excitement about passenger trains will translate to voters saying, “buy it” (or we’ll find someone else to vote for). ...All Aboard Florida is a ploy; enjoy the fun and dreaming while it lasts.” Before All Aboard Florida is developed, Norman predicts during a recent telephone interview, Fortress Investment Group will approach the state about buying the corridor. He believes the state wants it in order to allow other freight railways to serve South Florida’s ports, which are currently only served by the FEC. That, he says, would create competitive pricing and attract more shippers." biscaynetimes/index.php?option=com_content&view=article&id=1579%3Alife-in-the-rail-world&catid=46%3Afeatures
Posted on: Fri, 06 Sep 2013 02:55:39 +0000
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