[Lakelander]

Originally Posted by Hatman

I don't have anything more than a hunch, but I feel like this ought to be bad news:

Fortress Said to Explore Sale of Florida East Coast Railway

http://www.bloomberg.com/news/articl...-coast-railway

As I imagined it, the Brightline service existed to make the land owned by Fortress become more valuable. In exchange, Fortress would keep Brightline out of financial trouble. Sort of the whole Hong Kong Metro/Japanese Private Railways model, where the railway itself doesn't need to make a profit, but the whole company (real estate+railway) does.

I guess that Brightline isn't necessarily included in any deal reached, but it does seem like a precarious time to be severing the railroad from the real estate portions of the business.

^This is the explanation posted on a Jacksonville subforum:

Wall Street handicappers are putting the odds that Norfolk Southern will be the lead candidate to bid for the FEC. Genesee and Wyoming and CSX are considered suitors, but because FEC has exclusive access to several container ports, many think CSX wouldnt get the approvals.

Got an interesting message on this. This is completely unverified, so grain of salt in effect.

The sales of these large FECI assets is how they are going to "finance" the completion the AAF route from West Palm to Orlando.

Pay off the PIK's used to build the first segment. Raise cash to pay for the Orlando leg so no need to sell PAB's or get a RRIF deal from the FRA.

Selling off the freight hauling provides a faux firewall for the NIMBYs in Martin County who still think its a big freight expansion conspiracy. Fortress gets to keep the real jewel in the deal, Flagler Development who will go after the TOD and other commercial development along the entire service route. The other FECI arm, Parallel Infrastucture will stay seperate and continue to market wireless and fiber capacity on the route (and support connectivity in Brightline)

This was triggered by the ruling by the circuit court judge that he would proceed with the case because AAF couldnt identify any alternate financing.

If I was FECI, I would sell the railway to G&W with an excellent claw back clause after say 10 or 15 years, right about the time Brightline hits its stride and the NIMBY's have exhausted their conspiracy laden protests.

This would turn the FEC into a pure haulage and track maintenence operation. Interesting.

http://www.metrojacksonville.com/for...tml#quickreply

Brightline has already secured the rights to operate passenger rail service on this line, all the way to Jacksonville. Seems Fortress would get a ton of upfront cash, someone else would end up maintaining the rail infrastructure they have rights to operate on and they'd still own all the land around potential stations for TOD.