Passenger Trains > Ticket to ride on FECI's 'All Aboard Florida'

Ticket to ride on FECI's 'All Aboard Florida'
FloridaTrend.com
by Mike Vogel
8/28/2013

> Florida East Coast Industries is one of Florida's ultimate hard
> assets companies. With roots in the railroad that date back to Henry
> Flagler in the 1890s, FECI was incorporated in 1983 as a holding
> company for the railroad and the real estate assets it had acquired
> over decades — a solid but unglamorous collection of rail yards and
> industrial sites that were reliable breadwinners but didn't seem to
> offer the opportunity to make a financial killing.
>
> In 2007, Fortress Investment Group, a New York-based private equity
> firm, bought FECI for $3.5 billion and installed a management team
> that has gone about finding ways to wring big returns from those old
> assets. The Fortress execs have carved the company into four
> operating units that collectively encompass rights-of-way management,
> real estate and logistic services (see "Old Assets, New
> Organization," here).
>
> Interestingly, the freight rail company, Florida East Coast Railway,
> isn't among FECI's operating units: Fortress made it an independent
> company that it owns separately, along with the 350 miles of track
> between Jacksonville and Miami on which the railroad operates its
> freight trains.
>
> When Fortress decided to separate the freight company from the rest
> of the business, however, it included a provision that has become the
> basis for FECI's fourth and most surprising venture: Private
> passenger rail service.
>
> FECI retained all non-freight rights from Miami to Jacksonville on
> the railroad right-of-way corridor, including passenger service.
>
> If it comes to fruition, All Aboard Florida will be the first private
> intercity passenger rail service in America since 1971, when
> government-subsidized Amtrak took over passenger train operation
> nationally.
>
> For decades, fast passenger rail has been the stuff of presidential
> State of the Union wish lists and the dream of those who want to see
> Americans out of their cars and into mass transit. All Aboard Florida
> tickles those fancies and stokes the passions of free-market
> advocates as well. FECI will invest $2 billion in the All Aboard rail
> system that will be privately owned and running just four years after
> Gov. Rick Scott was heavily criticized for rejecting federal funding
> to build high-speed rail between Orlando and Tampa.
>
> All Aboard won't be true high-speed rail — its trains can reach 125
> mph only on the short leg from Cocoa to Orlando, where there are no
> crossings. But it will be fast for a train, covering the 240 miles
> between south Florida and Orlando International Airport in three
> hours with stations only in Miami, Fort Lauderdale, West Palm Beach
> and Orlando.
>
> All Aboard will be fast to the market too — announced in 2012 and
> running by the end of 2015. "It's the beginning of a revolution in
> passenger rail," says Bruce Richardson, president of the United Rail
> Passenger Alliance, a national non-profit based in Jacksonville.
>
> Vincent Signorello, a member of Fortress' private equity team who
> became CEO of Florida East Coast Industries in 2011, says FECI always
> intended to move fast to bring passenger rail to the tracks.
>
> Most people, however, expected that passenger service to be Amtrak
> and south Florida commuter service Tri-Rail. Both have pined for
> years to run on the track, which runs down Florida's east coast and,
> in south Florida, east of I-95. Amtrak now runs on CSX's line, which
> takes it on a bow through central Florida, while Tri-Rail runs on a
> line that leaves commuters west of where many work.
>
> Husein Cumber, FECI executive vice president for corporate
> development, says the entreaties from Tri-Rail and Amtrak focused
> FECI's leadership on passenger rail, but the company saw pitfalls in
> government projects. Government subsidies and grants were uncertain,
> Cumber says, so FECI began wondering how it might deliver passenger
> rail without relying on handouts from a cash-strapped public sector.
>
> Meanwhile, in 2010 and 2011, with the promise of $2.4 billion in
> federal stimulus cash to fund it, eight teams of industry players
> were vying to build high-speed rail between Orlando and Tampa. Cumber
> says FECI noticed that teams coveted a proposed $8-billion, 10-year
> project to extend the high-speed rail from Orlando to Miami.
>
> If those companies saw such opportunity, FECI leaders thought FECI
> should look into it. In 2012, the company launched ridership studies.
> An initial draft by Morristown, N.J.-based consulting firm Louis
> Berger Group reported that after a three-year ramp-up to get
> travelers accustomed to the service, All Aboard would draw 3.29
> million riders a year, generating $145 million in revenue, and would
> grow ridership at 1.3% per year, keeping pace with overall growth in
> the travel market. More recent estimates put no ceiling on ridership,
> estimating a market of 50 million trips each year for which All
> Aboard Florida can compete — trips beginning and ending near a
> proposed station...


Full story (about four times as long):

Ticket to ride on FECI's 'All Aboard Florida'



Edited 1 time(s). Last edit at 08/28/13 08:10 by GenePoon.

> If it comes to fruition, All Aboard Florida will be the first private
> intercity passenger rail service in America since 1971, when
> government-subsidized Amtrak took over passenger train operation
> nationally.

Well you had Southern, Rock Island and the Rio Grande all offering private intercity service past the 1971 date. Then you had the Texas Mexican Railway offer passenger service in the late 1980's between Corpus Christi and Laredo. I don't recall what led to the end of that service.

Tim

Also the original Auto Train and the Georgia RR's "super mixed" trains, which weren't super for long.



Edited 1 time(s). Last edit at 08/28/13 09:06 by ctillnc.

As having worked for the FEC in the past, I would love to see this come true. Hialeah yard is very close to Miami International Airport, which could also draw passengers going to West Palm Beach and points north.
Robert.

Has there been any progress on actually getting into Orlando? Seems like there's some pretty serious construction involved, and even in Florida that has to take some time for planning, permitting, etc.

This is fascinating. The biggest roadblock for FEC was obtaining agreement from the state and the BeachLine Expressway Authority to lease land in that ROW. Apparently, they have reached agreement. It appears they also have acquired land for a station at the Orlando airport. So now all they have to do is:

1) Build stations
2) Acquire rolling stock (presumably the double-deck design already developed by Amtrak/FRA/car manufacturers)
3) Upgrade the railroad

If they can do all that in two years, well, I'll be showing up to buy a ticket.

ctillnc Wrote:
-------------------------------------------------------
> Also the original Auto Train and the Georgia RR's
> "super mixed" trains, which weren't super for
> long.

And the Reading and Conrail from Philly to Pottsville, PA and Newark, NJ.

shoretower Wrote:
-------------------------------------------------------
> This is fascinating. The biggest roadblock for
> FEC was obtaining agreement from the state and the
> BeachLine Expressway Authority to lease land in
> that ROW. Apparently, they have reached
> agreement. It appears they also have acquired
> land for a station at the Orlando airport. So now
> all they have to do is:
>
> 1) Build stations
> 2) Acquire rolling stock (presumably the
> double-deck design already developed by
> Amtrak/FRA/car manufacturers)
> 3) Upgrade the railroad
>
> If they can do all that in two years, well, I'll
> be showing up to buy a ticket.

I think you are forgetting "Design the Work" (not yet done) and "Procure the Material" (not yet done). They are looking for a pretty big order of welded rail and turnouts and signal cases, which aren't exactly off the shelf items available at Home Depot.

I notice the price has doubled to $2 billion while the construction schedule has not become more realistic.

The ridership and revenue is plausible an in line with my earlier expectations. I don't see how it possibly pays back $2 billion investment.

njmidland Wrote:
-------------------------------------------------------
>
> Well you had Southern, Rock Island and the Rio
> Grande all offering private intercity service past
> the 1971 date. Then you had the Texas Mexican
> Railway offer passenger service in the late 1980's
> between Corpus Christi and Laredo. I don't recall
> what led to the end of that service.
>
> Tim

Don't forget Rock Island and the Soo Line mixed (primarily a ride in a caboose) of Rhinelander, WI.

Hats off to All Aboard Florida.
It's nice to see some real risk-takers left in this country who invest in something other than casinos and $5/Cup coffee chains.

If destiny were only for the "they'll never make it" crowd we'd still be wondering what's west of the Alleghenies.

Danny Harmon
Tampa

RuleG Wrote:
-------------------------------------------------------
> njmidland Wrote:
> --------------------------------------------------
> -----
> >
> > Well you had Southern, Rock Island and the Rio
> > Grande all offering private intercity service
> past
> > the 1971 date. Then you had the Texas Mexican
> > Railway offer passenger service in the late
> 1980's
> > between Corpus Christi and Laredo. I don't
> recall
> > what led to the end of that service.
> >
> > Tim
>
> Don't forget Rock Island and the Soo Line mixed
> (primarily a ride in a caboose) of Rhinelander,
> WI.


Last but not least, the "Gila Tomahawk" of the TC&GB Railroad in southern Arizona that ran into the 1980's I believe. A caboose was offered for anyone who showed up to ride.