Las Vegas-California high-speed rail project hits snag

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Wilfredo Lee / AP

In this Jan. 11, 2018 file photo a Brightline train is shown at the station, in Fort Lauderdale, Fla. A plan to build a high-speed train between Southern California and Las Vegas is back on track now that a private rail company has taken over the project. Brightline announced Wednesday, Sept. 19, 2018, that it has acquired the rights to XpressWest’s 185-mile federally approved rail corridor along Interstate 15.

Mon, Nov 2, 2020 (5:45 p.m.)

Construction of a high-speed passenger train from Las Vegas to San Bernardino County in Southern California has been delayed.

Terry Reynolds, director of the Nevada Department of Business and Industry, said Monday that he first learned of the decision to postpone a bond offering in California to help fund the proposed $5 billion train project over the weekend.

The project, called Brightline West, is a joint venture between Nevada and California.

Brightline, a company that already offers rail service in South Florida, is behind the proposed route, which has been talked about in various forms locally for years.

Earlier this year, California officials approved a $600 million private activity bond allocation, which was supposed to raise up to $2.4 billion for the project.

In a statement, California Treasurer Fiona Ma said “economic uncertainty” led to the decision to delay the sale of the bonds.

“Unfortunately, there is not a lot of liquidity in the market,” Ma said in the statement. “The project is postponed until market liquidity improves.”

In an email, a Brightline representative on Monday called the development a “minor setback.”

 “Although it may impact the initial timeline, we still plan to break ground as soon as possible,” the rep said. “The only thing that was postponed was the bond financing.”

Reynolds — who said the project still makes “a lot of sense” — said he believed the move by California officials was a smart one.

“I think they’re listening to their investors,” Reynolds said. “When you get to that size of a bond issue, you’re talking about large institutional investors. I think it’s a good thing that they’re looking at what they need to do to be able to sell the bonds to the investment community. It’s a prudent response. There’s a lot of things they can do to make that more attractive, so I don’t see that as a bad thing.”

Reynolds said money from the sale of private activity bonds in Nevada, which had been earmarked for the train project, would likely now go toward affordable housing initiatives.

The Nevada State Board of Finance had approved $200 million for the project, though it stipulated that bonds would need to go out before the end of the year. 

The first part of the train route would go to Victorville, Calif., according to Brightline. An additional $3 billion could then establish a stop at Los Angeles Union Station, the company has said.

“This would be very beneficial for Southern Nevada and for the gaming properties here,” Reynolds said. “If it can be done, it would be very helpful. Time will tell.”

Electric trains, according to plans for the project, would run every 45 minutes from 6 a.m. to midnight, carrying up to 500 people at speeds approaching 200 mph. The trip from Las Vegas to Victorville would take about 90 minutes.

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