Brightline, which proposes to build the XpressWest high speed rail linking Los Angeles and Las Vegas, has launched a $3.2 billion bond sale to enable that $8 billion project.
The bond sale will include $800 million in tax exempt bonds from Nevada and $2.4 billion from California, where most of the 170 mile line will run. The line will actually connect Victorville and Las Vegas initially with an extension to Rancho Cucamonga, which has connections to Los Angeles. The U.S. Department of Transportation is also sponsoring $1 billion in private activity bonds. The project is expected to begin operating in 2023.
Wes Edens, co-founder of Fortress Investment Group, the owner of Brightline, told the Las Vegas Review-Journal that the financing is similar to how his company financed a high speed rail line in Florida, which runs from West Palm Beach to Miami. “What we have done there, which we will do here, is funding incrementally. It allows them to begin construction,” he said.
Brightline originally had a September 30 deadline to sell the bonds but the State of California has extended that to the end of 2020. If the bond sale is unsuccessful, the $1 billion private activity bonds will be used for affordable housing, said a spokesman for the California Treasurer’s office.
Edens told the Review-Journal: “We think of it as three distinct segments. The first part is this high desert segment from Las Vegas to Victorville, that’s 100 percent permitted and is shovel ready to go.” Edens added, “The second is the one that goes down the hill, down Cajon Pass into the L.A. Basin and connects to the Metrolink station in Rancho Cucamonga. The third is the system that then runs from Rancho (Cucamonga) into Union Station (downtown L.A.).”
The three segments will begin operating at the same time, he said. “So launching the financing now allows us to start on the longest of those segments, which is the high desert segment, and that will be followed in the next couple of months with work on the other two parts of that.”
The rail line will follow the Interstate 15 right of way between Las Vegas and Rancho Cucamonga, with 35 miles of track planned for Nevada.
Edens says his company’s 65 mile Florida rail, which opened in 2018 “has been a real success,” with “tremendous ridership” of more than one million passengers the first year. He added, “It was really built to be proof of concept and to show people both the quality of the infrastructure and the quality of the service.”
The rail service was shut down in March due to Covid-19 but will reopen this year, said Edens.
