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The privately owned Brightline train at the new MiamiCentral terminal. Photo: Joe Raedle/Getty Images

As taxpayer-funded public transit systems look for a way out of their coronavirus death spiral, a private equity tycoon is betting on a public-private financing model as a way to fund big transportation projects in the future.

What's happening: Fortress Investment Group's Wes Edens is putting $100 million of his own money into a $9 billion plan to build new light rail systems in Florida and on the West Coast, Forbes writes.

  • His Florida-based Brightline, funded in 2017 with $600 million in private equity and tax-exempt bonds, is the only private passenger train in the U.S., operating a 67-mile rail service between Miami and West Palm Beach.
  • His vision is to expand the line all the way to Orlando and to run a similar electric passenger train between Las Vegas and a Los Angeles suburb.
  • Funding comes from tax-exempt private-activity bonds issued by state and federal governments, a less expensive option than typical corporate bonds.
  • By 2026, he expects his trains to carry nearly 20 million passengers, generating annual revenue of $1.6 billion and operating profit of almost $1 billion a year, according to Forbes.

Yes, but: Trains aren't exactly a moneymaker. Amtrak has consumed $52 billion of public funds and never made money in its half-century of operation, Forbes points out.

  • And, Edens has had his own financial challenges, as Forbes notes. But he clawed his way back from near-disaster during the Great Recession, selling Fortress to SoftBank in 2017 and pocketing $1.4 billion (pretax) for himself and his partners.
  • “At this point in my life, I’m more of a builder,” Edens tells Forbes. “Upgrading our nation’s infrastructure and building high-speed trains can be this generation’s Hoover Dam and Tennessee Valley Authority.”

My thought bubble: Many public transportation systems were already financially distressed before the coronavirus. Until riders feel it’s safe to return, revenues will continue to suffer. We’re likely to see more of these public-private partnerships as the transportation sector recovers.

Go deeper

Ray LaHood predicts bipartisan push to aid public transit

Axios' Ina Fried (l) and former Transportation Secretary Ray LaHood.

Former Transportation Secretary Ray LaHood said he expects a bipartisan push in Congress to shore up public transportation during the coronavirus pandemic, as it did for the airlines earlier this year and is under pressure to do again.

The state of play: During an Axios virtual event, LaHood underscored that Americans are using cars, rather than public transit, during COVID-19 pandemic. Public transportation as a result has subsequently seen a massive drop in ridership and revenue along with it.

The rebellion against Silicon Valley (the place)

Photo illustration: Sarah Grillo/Axios. Smith Collection/Gado via Getty Images

Silicon Valley may be a "state of mind," but it's also very much a real enclave in Northern California. Now, a growing faction of the tech industry is boycotting it.

Why it matters: The Bay Area is facing for the first time the prospect of losing its crown as the top destination for tech workers and startups — which could have an economic impact on the region and force it to reckon with its local issues.

Erica Pandey, author of @Work
2 hours ago - Economy & Business

Telework's tax mess

Illustration: Annelise Capossela/Axios

As teleworkers flit from city to city, they're creating a huge tax mess.

Why it matters: Our tax laws aren't built for telecommuting, and this new way of working could have dire implications for city and state budgets.

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