Brightline article in June 2018 issue

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Brightline article in June 2018 issue
Posted by Convicted One on Tuesday, June 05, 2018 10:57 PM

Having finally found the time to read this article, I have a question regarding the map "Brightlines Route" on page 55.

If I'm reading the legend correctly, Brightline's stations are depicted as  the large white dots, (MiamiCentral, FortLauderdale, WeatPalmBeach, and Orlando....ONLY) while the commuter rail operation "Tri Rail" has stations where the smaller yellow dots are shown. And then "other cities" located along Brightline's route are depicted as small green dots.

Am I reading this correctly that Brightline's trains are only  stopping in Miami, Fort Lauderdale, West Palm Beach, and Orlando? With all these other locations shown for reference only?

If so, that would certainly seem to limit the usefulness this line offers to the masses. Basically a tourist transport?

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Posted by David Lassen on Wednesday, June 06, 2018 9:09 AM
Since I edited that article, and map, I can tell you, yes, that's correct: As of right now, no stations are planned between West Palm Beach and Orlando. That can always change, of course.
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Posted by MidlandMike on Wednesday, June 06, 2018 9:05 PM

I am sure that the decission to bypass all the cities between WPB and Orlando is the reason that local opposition to Brightline has grew to the point that all the Congressmen from those districts are opposed to Brightline getting DOT's approval of tax free bonds to finance the Orlando extension.  Brightline has already failed in two private bond sales.  Their tone deaf response to local needs, in my opinion, puts the entire project in jeopardy.

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Posted by CMStPnP on Wednesday, June 06, 2018 9:28 PM

MidlandMike

I am sure that the decission to bypass all the cities between WPB and Orlando is the reason that local opposition to Brightline has grew to the point that all the Congressmen from those districts are opposed to Brightline getting DOT's approval of tax free bonds to finance the Orlando extension.  Brightline has already failed in two private bond sales.  Their tone deaf response to local needs, in my opinion, puts the entire project in jeopardy.

Actually that is not quite correct.   Brightline decided not to sell the bonds in the two past attempts due to a deteriorating market and lack of interest.    And it was Junk Bonds they were attempting to sell.     They correctly calculated they could get a lower interest rate via the government than via the junk bonds and that is why they switched to that approach.     The Congress people are upset because the wealthy people that contribute to their campaigns in WPB are upset and they are upset based on rumor and innuendo spread by the leaders of the opposition, notably among them former CEO of American Airlines - Robert Crandall, who is also concerned about the competition to the sweethart deal that American has in the state of Florida.   Specifically with rental car companies in Orlando and Miami (and a few other cities) that have packaged deals with American Airlines......also in for a revenue dip, if Brightline is successful.    BTW, if you read the AUTO TRAIN CORPORATION filing for bankruptcy way back in the 1970's you will see the very same issue cited against Eastern Airlines......which sold it's Florida business to American.

Congressman Mica has very articulately laid out a case that the funds Congress has set aside were specifically intended for a firm like Brightline and Congressman Mica is taken aback by the opposition to using the funds for the very reason they were intended.    So the battle over the funds is not over yet among the Florida Congressional delegation.

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Posted by CMStPnP on Wednesday, June 06, 2018 9:34 PM

Convicted One
If so, that would certainly seem to limit the usefulness this line offers to the masses. Basically a tourist transport?

Initially, their business plan is express service first as that will allow them to sell the tickets at a premium and recoup their startup costs faster.    I believe they stated more than once publicly they would consider more stations and non-express service after their business model is proven and they are making money.    It is not part of the start-up plan.     Why would they want to compete with themselves right out of the gate and cannibalize the premium ticket sales?     Makes no sense.     It would be like a major American Airline starting new service to Europe and then launching bare bones fares on the same route with additional stops.    A good portion of the passengers will put up with the additional stops for the lower fare.

BTW, the proposed HSR between Dallas and Houston has taken the same business approach.

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Posted by oltmannd on Wednesday, June 06, 2018 9:37 PM

CMStPnP

 

 
Convicted One
If so, that would certainly seem to limit the usefulness this line offers to the masses. Basically a tourist transport?

 

Initially, their business plan is express service first as that will allow them to sell the tickets at a premium and recoup their startup costs faster.    I believe they stated more than once publicly they would consider more stations and non-express service after their business model is proven and they are making money.    It is not part of the start-up plan.     Why would they want to compete with themselves right out of the gate and cannibalize the premium ticket sales?     Makes no sense.     It would be like a major American Airline starting new service to Europe and then launching bare bones fares on the same route with additional stops.    A good portion of the passengers will put up with the additional stops for the lower fare.

BTW, the proposed HSR between Dallas and Houston has taken the same business approach.

 

Do they own enough RE to develop at intermediate stops?  No sense stopping and letting someone else reap the benefit...

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by MidlandMike on Wednesday, June 06, 2018 10:17 PM

CMStPnP

 

 
MidlandMike

I am sure that the decission to bypass all the cities between WPB and Orlando is the reason that local opposition to Brightline has grew to the point that all the Congressmen from those districts are opposed to Brightline getting DOT's approval of tax free bonds to finance the Orlando extension.  Brightline has already failed in two private bond sales.  Their tone deaf response to local needs, in my opinion, puts the entire project in jeopardy.

 

Actually that is not quite correct.   Brightline decided not to sell the bonds in the two past attempts due to a deteriorating market and lack of interest.  ...

 

So were the bond sales a failure or a sucsess?  Lack of interest would be an understatement as I remember.  

And every county government along the Treasure Coast is fighting Brightline.  Are you going to blame that all on a American Airlines exec?

Rep. Mica is correct in pointing out that the Surface Transportation Act includes rail, but with all the other Reps opposd, as you say the battle over the funds is not over yet.

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Posted by daveklepper on Thursday, June 07, 2018 6:28 AM

Every county?   I think there are a few that are not opposed and some that may be in favor.  Also, remember that there arlready is farily frequent regular commuter rail service for the towns lacking Brightline stations along the existing service. 

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Posted by CMStPnP on Thursday, June 07, 2018 8:25 AM

MidlandMike
So were the bond sales a failure or a sucsess?  Lack of interest would be an understatement as I remember.   And every county government along the Treasure Coast is fighting Brightline.  Are you going to blame that all on a American Airlines exec? Rep. Mica is correct in pointing out that the Surface Transportation Act includes rail, but with all the other Reps opposd, as you say the battle over the funds is not over yet.

1. They withdrew before the official offer was made to place the bonds on sale.

2. All the other reps?    A handful of county goverments and a few Congessman on a special interest group payroll do not control the U.S. Congress.    Pretty sure there are several hundred Representatives they would have to persuade to vote against......which I think is out of their financial reach.

3. The biggest and most well financed group opposed is Crandall's Group where he has personally raised over $1.2 million in support of the group.      That is a LOT of money (and does not represent the total raised) for a protest group that is basically focused on a few very small counties.    I would not be at all surprised to find American Airlines indirectly contributing money or material support in some way to this group.

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Posted by CMStPnP on Thursday, June 07, 2018 8:36 AM

oltmannd
Do they own enough RE to develop at intermediate stops?  No sense stopping and letting someone else reap the benefit...

Interesting question but....

I have no clue at this point between what is FEC's land and what they moved over to Brightline.    I would think FEC still owns a lot of land along the old right of way.    New right of way probably have to look to purchase land but from what I see on a map..........mostly rural area along the new right of way.   Not sure how wide the Right of Way is but here in Texas the former T&NO line that goes by my house that was built in 1872 is 200 feet wide for only a single track.    Additionally they had large tracts of real estate alongside the ROW they deeded and sold to the public as towns / farms.

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Posted by MidlandMike on Thursday, June 07, 2018 2:04 PM

daveklepper

Every county?   I think there are a few that are not opposed and some that may be in favor.  Also, remember that there arlready is farily frequent regular commuter rail service for the towns lacking Brightline stations along the existing service. 

 

There are 4 counties north of Palm Beach along the Treasure Coast that Brightline plans to bypass with express service.  Martin and Indian River Counties joined a suit against DOT on the bonds.  St Lucie County was against AAF, but maybe have thrown in the towel on fighting, and are now trying to mitigate safety concerns if the project goes thru.  Brevard County seems to think they will benefit from a station in Cocoa, however, the Beachline Expressway commission has put a non-competition clause in their ROW easement that will prevent a Cocoa station stop.

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Posted by MidlandMike on Thursday, June 07, 2018 2:18 PM

CMStPnP

 

 
MidlandMike
So were the bond sales a failure or a sucsess?  Lack of interest would be an understatement as I remember.   And every county government along the Treasure Coast is fighting Brightline.  Are you going to blame that all on a American Airlines exec? Rep. Mica is correct in pointing out that the Surface Transportation Act includes rail, but with all the other Reps opposd, as you say the battle over the funds is not over yet.

 

1. They withdrew before the official offer was made to place the bonds on sale.

So they failed before they even started?

2. All the other reps?    A handful of county goverments and a few Congessman on a special interest group payroll do not control the U.S. Congress.    Pretty sure there are several hundred Representatives they would have to persuade to vote against......which I think is out of their financial reach.

The reps for the districts which the line goes thru ar against it.  All the 100s other reps could care less and usually defer to those most effected.

3. The biggest and most well financed group opposed is Crandall's Group where he has personally raised over $1.2 million in support of the group.      That is a LOT of money (and does not represent the total raised) for a protest group that is basically focused on a few very small counties.    I would not be at all surprised to find American Airlines indirectly contributing money or material support in some way to this group.

Indian River County alone has budgeted about 3 $million to fight it.  AAF said that 7 $million in taxpayer money has been spent against them.

 

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Posted by CMStPnP on Thursday, June 07, 2018 6:48 PM

MidlandMike

My feet hurt.

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Posted by Convicted One on Friday, June 08, 2018 9:13 PM

CMStPnP
 Why would they want to compete with themselves right out of the gate and cannibalize the premium ticket sales? 

I "get" that they'd rather not compete with Tri-rail at Tri-rail's pricepoint. But I'm just kind on stuck in disbelief that they can generate sufficient volume between the three stations in operation for the forseeable future, to cover even their variable costs, let alone generate a return. 

Maybe it's just me, but I'm asking myself if I lived down there what reason would I have to ride it more than just a few times until bthe novelty wore off?

I guess if you're very wealthy and  live in either west palm beach or ft lauderdale and your office is in Miami...the  commute would make sense. But just consider the percentage of the population living along that corridor that does not fit those narrow parameters.

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Posted by Convicted One on Sunday, June 10, 2018 12:40 PM

oltmannd
Do they own enough RE to develop at intermediate stops? 

Your post made me think of something. While everyone seems to be "fat and sassy" lauding Brightline for being privately financed, can the same be said for it's line side real estate ventures?

With all the "public-private partnership" redevelpoment schemes we keep hearing about where (through various programs) the taxpayer ends up doing all the heavy lifting, and some thinly vested private entity gets to cash all the checks, I can't say I'd be shocked to learn something like this is going on, behind the brigh shiny trains. The local authorities like to cooperate because their property tax  receipts eventually go up for all the surrounding properties, despite the developers usually being awarded lengthy property tax abatements as a further incentive.Meaning of course, it's the surrounding properties who are actusally  forced to subsidize the redevelopment. 

Coupled with Mr Lassen's "that can always change" comment above, perhaps Fortress expects to have a stronger hand to negotiate larger inducements from lineside communities....later....once the system is up and running?

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Posted by CMStPnP on Sunday, June 10, 2018 9:07 PM

Convicted One
I "get" that they'd rather not compete with Tri-rail at Tri-rail's pricepoint. But I'm just kind on stuck in disbelief that they can generate sufficient volume between the three stations in operation for the forseeable future, to cover even their variable costs, let alone generate a return. 

I don't think that was ever the plan.   The business plan was to break even or make a profit on the Orlando to Miami route.     Most new business startups lose money the first 2-3 years or plan to.    As for generating sufficient volume, that goes to marketing.     Brightline will run circles around Amtrak for marketing and marketing innovation........I suspect.     Need to give it time to establish the business relationships.  

Tri-Rail is a public service and as such is not really marketing it's service with tour groups or package deals, Tri-Rail is very much just word of mouth.    Further, we need to see what Brightline offers in the area of the Bistro car as well.   If it hits a home run there, it will entice more passengers.    They can't possibly do worse in food service than the poorly run Amtrak food service department.    We'll see though.    Myself I think Brightline will embarrass Amtrak with it's Bistro offerings.

 

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Posted by Convicted One on Friday, June 15, 2018 7:49 PM

CMStPnP
The business plan was to break even or make a profit on the Orlando to Miami route.     Most new business startups lose money the first 2-3 years or plan to.    As for generating sufficient volume, that goes to marketing.     Brightline will run circles around Amtrak for marketing and marketing innovation........I suspect.     Need to give it time to establish the business relationships.  

I read where analysts are saying Brightline's break even point is 120,000 riders/month....currently around 30,000, I believe. That's a pretty steep climb for an outfit operating in the narrow niche that Brightline is operating in. 

As you pointed out, Brightline has no interest in competing head2head with the commuter services, so it only stands to reason they will not have an "all destinations-one price" pricing model.

Any thoughts what the Miami to Orlando fare  might be? 

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