Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Denver news in your inbox
Catch up on the most important stories affecting your hometown with Axios Denver
Des Moines news in your inbox
Catch up on the most important stories affecting your hometown with Axios Des Moines
Minneapolis-St. Paul news in your inbox
Catch up on the most important stories affecting your hometown with Axios Twin Cities
Tampa Bay news in your inbox
Catch up on the most important stories affecting your hometown with Axios Tampa Bay
Charlotte news in your inbox
Catch up on the most important stories affecting your hometown with Axios Charlotte
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.