All Aboard Florida
After Fortress Investment Group bought Florida East Coast Industries,
it kept all real estate operations with Florida East Coast Industries
and put all railroad operations with Florida East Coast Railway, said Bob Ledoux, senior vice president and general counsel of Florida East
Coast Railway. In late 2007, he said, the parent company provided an easement to a
subsidiary, later renamed All Aboard Florida, giving it exclusive
rights to passenger traffic and the right to build a second track along
the existing corridor.
Fortress has hired Holland and Knight to have the zoning of their real estate paralleling the tracks re-zoned to residential so houses can be built and sold off. Fortress's plan has been met with resistance from Homeowners from Homestead to County line in Dade County. Now Holland and Knight has to meet with Dade County officials and bully them into changing zoning.
"We didn't spend a lot of time looking at it just because we
saw it as an equity play," said Michael Sohr, a high-yield
portfolio manager at AllianceBernstein. "If you are moving freight in and out of Florida, it's the
only place you can go. If anything were to go wrong with the passenger rail, people believe Fortress will do whatever it takes to
make it work, because it is so invested in the railroad."
Will bond investors have anything to collect if All Aboard Florida default?
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