Indian River and Martin counties vs U.S. Dept. of Transportation

Filing Date:March 31, 2015

Case:Indian River and Martin counties Vs All Aboard Florida rail project

Jurisdiction:Federal District Court for the District of Columbia

Status:Resolved

Civil / Criminal:Civil

Arbitrary and capricious action/decision making

A U.S. District Court judge today is expected to hear arguments over the issuance of $1.75 billion in tax-exempt bonds for All Aboard Florida. Indian River and Martin counties have asked Judge Christopher R. Cooper to temporarily block the "clearly unlawful" bonds which would fund most of All Aboard Florida's $3 billion, Miami-to-Orlando passenger-rail project, All Aboard Florida and its co-defendant, the U.S. Department of Transportation, which in December gave preliminary approval to bond issuance, violated environmental laws by moving forward without receiving final federal approval, according to Indian River and Martin counties. The court should invalidate DOT's decision and prevent sale of the bonds until the federal requirements have been met, according to the counties. An injunction, if granted could permanently block tax-exempt funding for All Aboard Florida, which faces a federally-imposed July 1 deadline to sell the bonds. But the rail project would proceed with or without tax-exempt bonds; blocking their sale would only make the project more expensive, according to All Aboard Florida's attorneys. The tax-exempt public activity bonds — issued through the quasi-public Florida Development Finance Corp. — are the best, not the only, option available, and if denied tax-exempt bonds, All Aboard Florida likely would seek traditional bonds at an increased cost of $277 million to $394 million, according to the defendants' filing. The railroad has said it would use the bond financing to purchase equipment and fund infrastructure improvements necessary to run 32 trains daily along the Florida East Coast Railway corridor. If the court denies the injunction, Indian River and Martin counties could appeal and seek a stay in a higher court, an option also open to All Aboard Florida and DOT should the court rule against them. The hearing begins at 10 a.m. in Courtroom 27A at the United States District Court for the District of Columbia, 333 Constitution Ave. N.W., in Washington.