Private companies used to dominate American railroading, but the industry faced rough times as the twentieth century wore on. Private freight rail was eventually revived around 1980 through a series of deregulatory measures, but passenger service hasn’t been profitable in half a century. Amtrak and a bevy of commuter railroads picked up some of the slack, but with mounting pressure from Republicans to staunch deep losses, U.S. passenger rail is in dire straits.
A long time coming but now that narrative might be changing, as was reported by International Business Times, Florida East Coast Industries, affiliate of the storied Florida East Coast Railway, announced plans for “All Aboard Florida” last Thursday. The private, intercity service would initially connect passengers in Miami, Ft. Lauderdale, West Palm Beach, and Orlando, with possible future extensions further west to Tampa, and north to Jacksonville. With a substantial right-of-way and a well-run freight railroad that could be adapted to passenger service more easily than most, the major question that remains is that of funding.
The announcement at first sounded almost fanciful – public transit authorities are hemorrhaging cash, and passenger rail in the U.S. has so far mostly avoided the liberalization that has occurred in Europe and East Asia. But the Florida East Coast is no stranger to the industry: From Henry Flagler’s first investments in South Florida in the late 19th century to the violent strikes of the 1960s, the FEC has been at the forefront of Florida railroading for over a century.
The hiring of Eugene Skoropowski also helped. A respected transit veteran who led California’s Capitol Corridor service to record ridership before turning his attention to the private sector, Skoropowski will presumably lead the project as senior vice president for passenger service development, a position created for him by Florida East Coast Industries earlier this month.
Of the 240 miles of track needed to bring Florida East Coast trains from Miami to Orlando, the company’s main line already covers the 200 miles along state’s eastern coast, from Miami to the Space Coast city of Cocoa. Florida East Coast will need to acquire land and build tracks along the last 40 miles to Orlando, with All Aboard Florida spokeswoman Christine Barney saying on Monday, “We expect that it’ll be land that’s already in public use.” Some have speculated that the company could build new tracks in the median of the Bee Line Expressway.
No matter how the Florida East Coast gets passengers to Orlando, freight would surely follow. CSX currently has a monopoly on freight rail in Central Florida, but the FEC is no doubt eager to gain a foothold in Florida’s third-largest metropolitan area. The railroad has made significant investments in South Florida ports in anticipation of the latest Panama canal expansion, which would be made more valuable by a higher capacity double-tracked main line and direct access to Orlando and Tampa.
Florida East Coast Industries emphasizes that the passenger service will be “owned, operated, and maintained” privately with no risk to Florida taxpayers, perhaps seeking to distance itself from Florida’s recently-canceled public high speed rail proposal. The project was championed by the Obama administration and had already won federal funding, but Florida’s newly-elected Republican Governor Rick Scott axed the line after saying he was afraid that state taxpayers would be liable for operating costs.
The project’s backers are less specific about construction costs. Barney said that the “vast majority” of the costs, which the company estimates at $1 billion, will be covered privately, but left open the possibility that the company could seek subsidies or financing for construction.
The Florida East Coast is a much smaller railroad than the well-known Class I carriers like CSX and BNSF, but it has a number of attributes that make it uniquely suited for passenger rail. The railway hauls a large amount of time-sensitive multimodal freight – that is, goods that are transferred to and from trucks and ships – which is operated more like passenger service than the slower bulk freight that dominates the interior of the country.
As a result, the Florida East Coast has some of the most sophisticated signaling of any freight railroad in the United States, allowing cargo to travel at up to 60 miles per hour. Most of the track is currently rated for passenger speeds of up to 80 miles per hour, but further upgrades will be needed to bring the line up to the 110 miles per hour maximum speed touted in All Aboard Florida’s press release.
The days of dynamiting and derailments are behind the Florida East Coast, but some in organized labor have reservations about FEC’s plans. Frank Wilner, national spokesman for the United Transportation Union, which represents many FEC workers, warned that “the new operation may be contracted out, and the private contractor may attempt to use non-union labor.” Because the Florida East Coast operates only within the state, Wilner said, it could try to avoid participating in a number of federal railroad worker programs, including the Railroad Retirement Board, the Railway Labor Act, and Federal Employers Liability Act.
The announcement of passenger service on the Florida East Coast will also affect existing public transportation throughout Florida. South Florida commuter railroad Tri-Rail has considered shifting its trains from its current line, which the Florida Department of Transportation bought from CSX in 1989, to the the parallel FEC main line, which runs through more densely populated coastal areas. Amtrak has also been eyeing the FEC main line for intercity service all the way up the coast from Miami to Jacksonville, and late last week settled liability issues related to the planned service, though funding does not appear to be forthcoming.
Christine Barney said that the Amtrak and FEC plans, which would run the same route, are “not exclusive,” and that the company “would not see any problem with the line’s capacity,” but that “at this time our project is not involved in any way.”
Steven Abrams, a Palm Beach County Commissioner and vice-chair of Tri-Rail’s governing board, called the proposal “complementary to our commuter service” and said he wished FEC well, pointing out that All Aboard Florida would be a regional service, while Tri-Rail serves a commuter market. Abrams said that he was notified of the plan before the announcement by an executive at the Florida East Coast, but that they were not working in coordination on the new passenger service.
And of the real estate around the railroad that could benefit from passenger service, only one such parcel remains in the hands of FEC shareholders. The property portfolio of the modern-day Flagler Development Company, named after the Florida East Coast founder who turned down the opportunity to name the city of Miami after himself, is concentrated instead in outlying commercial and industrial areas. (Flagler Development was spun off of from the railroad as a real estate investment trust by Fortress Investment Group soon after it purchased the railroad and its land in 2007.)
The only piece of real estate that could benefit from passenger service is a 9-acre strip of land in Miami’s fast-growing historic downtown, which has 2,500,000 square feet of entitled development rights – about the same size as the new 1 World Trade Center in lower Manhattan.
Florida East Coast Industries’ passenger proposal is still in its infancy, and much remains to be done before the first passenger tickets are taken. Many of the details are a bit ambitious – from the 2014 opening date, to the $1 billion price tag, to the “about three hour” Miami-Orlando travel time – and it remains to be seen if the company can come up with financing. But if any freight railroad in the United States can bring profits to passenger rail, it’s hard to think of a better candidate than the Florida East Coast.