Brightline remains a work in progress. But now that Florida’s new intercity rail service is rolling through Fort Lauderdale, people are getting a closer look at the positives, the negatives and a business model that Henry Flagler himself might recognize.

This train has left the station. Brightline, America’s only privately owned, intercity passenger rail service, launched in South Florida on January 13, its brightly colored locomotives pulling passengers between downtown stations in West Palm Beach and Fort Lauderdale at an introductory price of $10 per trip. Train service to Miami was expected to start in the spring, and Brightline plans to expand eventually to Orlando. Not every headline has hailed the new passenger train service. But as 2018 began, Brightline had plenty of forward momentum on its bumpy road from concept to reality.

As it continues to roll out services, Brightline’s backers and critics will get a better look at some of the particulars. For some, Brightline highlights the need for better rail infrastructure – in particular, tracks that aren’t at grade level and therefore don’t bring boat or car traffic to a halt when crossing waterways or roads. Others will look to a privatized rail model that’s largely dependent on owning and developing land around new downtown stations. In addition to engineering and financing challenges, Brightline has faced litigation and legislative scrutiny. On its planned route between West Palm Beach and Orlando, Brightline trains would run nonstop through Martin and Indian River counties, where Brightline has few friends. Both counties sued in an unsuccessful attempt to stop a bond financing plan for Brightline’s development of passenger service between South Florida and Orlando. Opponents have also seized on tragedy in the service’s opening weeks – a handful of accidents, including several fatalities, caused by people on the tracks.

News of the launch of Brightline service on January 13 blended with media coverage of a fatal incident the day before, when a Brightline train on a promotional trip struck and killed a woman on the tracks at a rail crossing in Boynton Beach. Another fatality followed when a Brightline train hit a bicyclist who was on the tracks. Non-fatal incidents involving Brightline trains ensued, too, including at least one reported as an attempted suicide.

The tragic fatalities on the tracks in January reinforced the resistance to Brightline in Martin and Indian River counties. “We’re going to continue to fight,” says Florida Sen. Deborah Mayfield, whose district spans Indian River County and spills into Brevard County. “It isn’t about stops … We just want to make sure when they [Brightline] come up through our area that those at-grade crossings are safe.”

Fort Lauderdale station.
Fort Lauderdale station.

“There was not much they [Brightline] could do” to prevent the train-versus-people incidents in January, Jack Stephens says. He is executive director of the South Florida Regional Transit Authority, which runs the Tri-Rail commuter train service on a state-owned railroad west of Interstate 95 in Palm Beach, Broward and Miami-Dade counties.

Brightline, which runs east of I-95 on a railroad controlled by Florida East Coast Railway, has worked with Tri-Rail to publicly urge caution at rail crossings. The two passenger train services have discussed “signage in certain areas that will have the 211 number displayed,” Stephens says, referring to the three-digit phone number to call for help in a personal crisis.

In public service advertising, Brightline started warning South Floridians to exercise caution at rail crossings long before launching operations in January. After the Brightline-involved fatalities, “we amplified on our existing efforts,” says Patrick Goddard, president of Brightline. “We had been running PSAs for over a year. We had made 50 presentations to schools, hospitals, bus drivers, first responders.”

Regardless of PSAs and community outreach, some lawmakers are likely to keep trying to tap the brakes on Brightline. For example, Mayfield was trying during the Florida Legislature’s winter session to ensure greater regulation of Brightline. She supported a state budget proposal that funded an independent study of Brightline’s safety by the Center for Urban Transportation Research at the University of South Florida.

She also proposed Senate Bill 572, which would require the Florida Department of Transportation to review and approve all at-grade crossings in Brightline’s rail corridor in coordination with the Federal Railroad Administration.

Mayfield rejects a cookie-cutter approach to safety upgrades at street-level rail crossings in the Brightline rail corridor. She cited one such crossing in Stuart known locally as “Confusion Corner,” where five roads and the railroad converge. “Every one of these at-grade crossings is unique to the community,” she says.

The Business of Rail

Yet despite the negative publicity coinciding with its startup, Brightline got off to a faster start than the company itself had expected, according to Goddard. Brightline does not publicly disclose how many passengers it carries. But Goddard says Brightline’s ridership in January between Fort Lauderdale and West Palm Beach “far exceeded our expectations. It was about three times what we expected.”

Expectations also are building among owners of property with proximity to Brightline stations. For example, much of the residential development spree in the Flagler Village area is drawing fuel from Brightline’s nearby train station, hugging the west side of the tracks just north of Broward Boulevard. That’s not incidental to Brightline, it’s part of the company’s plan. In a strategy not unlike 19th-century rail magnates such as Henry Flagler, who originally ran trains through Florida to his massive hotels and other real estate holdings, the people behind Brightline are also very much in the property business.

Florida East Coast Industries (FECI), Brightline’s parent company, owns eight acres near the Fort Lauderdale train station, which is “for future transit-oriented development,” Daniel Quintana, vice president of development at FECI, said in an email exchange. “Currently, there is development under way in Miami and West Palm Beach.”

Exactly what kind of real estate development will unfold on the FECI land in Fort Lauderdale? Some clues are emerging in West Palm Beach and Miami, where FECI already has launched downtown developments near the Brightline stations.

Near the West Palm Beach station, FECI this year expects to finish construction of a 24-story mixed-use residential building with 290 rental apartments, branded as Park-Line Palm Beaches. MiamiCentral, the Brightline station in downtown Miami, was still under construction as 2018 began. But by late 2017, FECI already had opened a 95,000-square-foot office building nearby while building a 195,000-square-foot office building on top of the station, which the company expects to open this year.

Construction of MiamiCentral, elevated about 50 feet above street level to reduce downtown traffic jams, is a six-block project behind schedule. The sprawling station was supposed to open last year. Instead, the station’s construction sprawled into spring. Goddard tries to put the delay in perspective: “It’s a complicated project that’s going to be around for the next 100 years.”

Trains in Traffic

Brightline has prepared to minimize traffic conflicts between trains and marine vessels in Fort Lauderdale, where every train stops downtown boat traffic as the retractable New River rail bridge goes down. But Brightline trains may contribute to rush-hour traffic backups at street-level rail crossings on Broward Boulevard and other busy roads, including State Road 84.

“With no train you’re backed up on Broward Boulevard to I-95 or to downtown” at rush hour, says Phil Purcell, CEO and president of the Marine Industries Association of South Florida, a trade organization. He believes public agencies should help Brightline build flyover sections that elevate the railroad above Broward Boulevard, the main gateway to downtown Fort Lauderdale, and State Road 84, a main drag to Port Everglades.

The marine industry and Brightline have worked together to minimize traffic scheduling conflicts at the New River. The passenger trains would cross the bridge 32 times a day under Brightline’s planned daily schedule of 16 round trips between Fort Lauderdale and Miami. Freight trains will continue to cross the railroad bridge, mainly at night.

Among other tools Brightline has developed for the Fort Lauderdale marine industry is a mobile app that tracks arrival and departure times at train stations, heralding when the bridge will be lowered.

But a bigger fix than a new app may be needed someday at the river crossing. Purcell says the railroad bridge there is “antiquated” and needs to be replaced, despite Brightline’s repairs and improvements to the bridge ahead of the startup of service to Miami. A new retractable railroad bridge could be taller than the existing one in the down position, allowing marine traffic to pass below as trains pass above.

“We’re not against the train. We just want the infrastructure to match,” Purcell says. “Nobody wants to stick their hand up and say we need money for this … Everyone should kick into it to make it work.”

Plans for MiamiCentral.
Plans for MiamiCentral.

Brightline itself still has plenty of investments to make before full-blown service between downtown Miami and a train station at Orlando International Airport can start. In addition to finishing construction of the MiamiCentral station, Brightline’s to-do list includes installing a train-braking technology called positive train control, or PTC, designed to prevent trains from going too fast as they approach curves. “It’s a software upgrade,” Goddard says. Lack of PTC has been cited in recent fatal train accidents including one earlier this year in South Carolina, another one south of Seattle in December and the 2015 Philadelphia train derailment that killed eight. Federal law requires all trains to operate with PTC by the end of 2018.

Goddard says Brightline began operating this year with a version of PTC known as ATC, or automatic train control, in its rail corridor. Brightline plans to start converting to PTC technology at crossings in its 66-mile rail corridor between Miami and West Palm Beach after starting its service in Miami. Brightline also plans to finish working on so-called “quiet zones,” where safety upgrades at crossings preclude the need for approaching trains to blow their horns.

Then comes the extension of its rail corridor by another 168 miles to launch service to Orlando. Goddard says the second phase of Brightline’s development would include an expansion of its current fleet of five trains with 250-seat railcars. Brightline plans to add five more trains with 500-seat railcars.

Investors are helping Brightline finance its costly development. Late last year, the state-controlled Florida Development Finance Corporation issued $600 million of bonds on behalf of All Aboard Florida – Operations LLC, which is doing business as Brightline. The bond issue provided the first major injection of debt financing into Brightline, which had been funding its development mainly with equity.

The $600 million bond issue also was a milestone in Brightline’s running legal fight with Martin and Indian River counties. Both counties filed federal lawsuits in 2015 after the U.S. Department of Transportation allocated $1.75 billion of bonds for the development of the entire Miami-to-Orlando Brightline service. The judge dismissed the suits in 2017 after Brightline withdrew its application to the DOT for approval of $1.75 billion in tax-exempt bond financing.

Brightline then broke its request in two pieces, successfully reapplying for DOT approval of $600 million of bonds dedicated to financing Brightline’s phase-one development in South Florida and a separate $1.15 billion bond issue solely for the phase-two expansion to Orlando.

The phase-one focus of the $600 million bond issue on Brightline’s development in South Florida “mooted the legal challenges” by Martin and Indian River counties, according to financial trade publication Bond Buyer. Both counties may sue again to undo the DOT’s approval of the $1.15 billion bond issue for Brightline’s phase-two development. DOT Under Secretary Derek Kan set a May 31 deadline for issuing the so-called private activity bonds, according to Bond Buyer.

But Brightline also has applied for an RRIF (Railroad Rehabilitation and Improvement Financing) loan through the Federal Railroad Administration, which could provide backup financing if the planned $1.15 billion bond issue becomes problematic.

Time will tell whether investors are making a smart bet on Brightline’s historic effort to convince South Floridians to park their cars and take the train.

Brightline internally has forecast a three-year ramp-up in its ridership from 1.1 million passengers this year to a stabilized level of 2.9 million in 2020, according to a report by Fitch Ratings, a New York-based bond rating agency. In its November 27 report, Fitch gave the $600 million Brightline bond offering a BB- rating, below the investment grade that many funds require to purchase bonds.

The Fitch report doused speculation that a massive number of South Florida commuters who drive between cities to their jobs will start riding Brightline trains instead: “The service targets primarily business and leisure travelers, with commuters expected to be approximately 10 percent of ridership.”

According to the report, Brightline offers “a much-needed alternative to congested surface transportation modes” in South Florida, an area that is “economically strong and diverse.”

“However, given that Brightline is a new service with no ridership history … there is significant uncertainty around ridership levels.”

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