LOS ANGELES — Virgin Trains USA is seeking approval in California and Nevada to raise up to $3.6 billion in tax-exempt bonds for its proposed high speed rail service between Southern California and Las Vegas. And the passenger company has begun holding talks with LA County’s Metropolitan Transportation Authority about some aspects of that service.
The Bond Buyer reports that Virgin Trains’ application to California’s Debt Limit Allocation Committee will look to borrow $2.4 billion in unrated private activity bonds, and will also look to raise another $1.2 billion through a Nevada agency. The California agency will consider the application in September.
Virgin Trains used a similar funding mechanism in Florida to raise $1.75 billion for expansion of the former Brightline passenger service to Orlando from its current operation between Miami and West Palm Beach, Fla. [See “Virgin Trains USA raises another $1.75 billion in latest bond sale,” Trains News Wire, April 19, 2019.] Those bonds were fully subscribed two weeks after going on sale in April, allowing construction on the West Palm Beach-Orlando segment to begin in May.
The Las Vegas project had previously been reported to be facing a delay after Virgin Trains was unable to secure tax breaks from the Nevada legislature. [See “Virgin Trains USA to delay start of LA-Las Vegas project,” Trains News Wire, June 7, 2019.]
Meanwhile, Curbed Los Angeles reports that LA Metro CEO Phil Washington told his agency’s board of directors last week that Metro and Virgin Trains “are having discussions .. as we speak.”
Washington said Metro would not be directly involved in the Virgin Trains operation, it might be able to help facilitate the extension of service to Los Angeles. Initial plans call for the Las Vegas service to originate and terminate in Victorville, more than 80 miles from downtown L.A.
Ms Harding,
The plot thickens. Have you ever considered writing a book of all these things along the lines of what “The Help” was? Different name in order to protect yourself?
Since the BNSF just spent lots of money to triple track Cajon I don’t think they will be eager to add lots of passenger trains, especially when they will be going faster than all those freights uphill and downhill on mountain grades.
Re Anna’s comment on the difference in ‘stuff’ between the U.S. and Europe, I remember flying back from Zurich on Swissair once to LAX. Because of traffic our plane was held off the runway for some minutes where we could look out the windows and watch the planes coming in, one after another after another, in pairs (LAX has two runways). As soon as one pair landed another pair’s landing lights would appear in the distance. I could feel the jaws of the Swiss just drop. The volume of air traffic was just incredible to them.
Supposedly the Russians boycotted the L.A. Olympics because of politics. I suspect the real reason was that the base was in L.A. but events were going to be held between Santa Barbara and San Diego, a stretch of almost 200 miles, a distance mostly filled with houses. So every day Soviet athletes were going to be in busses looking at houses for hours and realizing that everything the Soviets had told them about U.S. poverty and Soviet superiority was a total lie.
Actually I just looked at the map, and the UP (former SP) Cajon Pass line connecting West Colton with the Soledad Canton Line to Mojave thence Tehachapi passes under I-15 at the junction with US-395 in the Phelan-Hesperia high desert area immediately south of Victorville and north of Cajon Pass proper. It then runs west through fairly empty and relatively flat desert (apart from Phelan) roughly parallel to (and sometimes in sight of) CA-138 until reaching Palmdale.
The cost of double tracking this non-mountain-climbing route as well as the Metrolink Antelope Valley line (with the latter benefit of adding more frequencies to that service) seems to me like an appealing way to extend the Virgin service to LA with decent ROI. A drawback would be that it avoids the important Inland Empire market, though that’s a short (modulo sometimes horrendous traffic) bus connection trip via I-15 Cajon to a presumed Victorville-Hesperian stop for the Virgin train.
This doesn’t depend on unlikely scenarios such as:
– A CSHSR Bakersfield-LA link.
– Adding additional capacity on the BNSF Cajon Pass route which I assume is close to capacity as is.
I reckon UP would be okay hosting the Virgin train (for a fee) as long as they don’t have to pay for the capacity increment.
It’s also possible to consider double tracking the UP in the other direction down Cajon from the aforementioned Phelan-Hesperian location, but that would be more expensive to accomplish (mountain pass railroad construction) and I don’t believe that line has good connections to Metrolink at San Bernardino (unlike BNSF) and I’m pretty sure that while UP would likely acquiesce to hosting in this direction per the above “capacity provided by Virgin point”, I’m pretty sure they don’t want this movement anywhere near West Colton Yard.
Mister Blaubach:
The previous Virgin Trains proposal called for a terminal in Victorville. There are some nuances to this.
First, while a public carrier (meaning they would sell anyone who asked a ticket) their primary market is to have been canned tours involving European tourists. For them, loading them onto buses in Victorville, hauling them over the Cajon Pass, and then blasting west on the San Berdoo Freeway is acceptable – as long as the buses are reasonably comfortable. Under this scenario the train is not really intended to make money, operating it is part of the cost of doing business, but it would (as always) be nice if it lost as little as possible.
But in San Bernardino there is San Bernardino Station (which I understand they have cleaned up to a remarkable degree), and there is Metrolink – a straight shot, pretty much, to LAUPT. It is faster, cheaper, and more comfortable to go by rail, especially if they can cut some sort of dedicated deal with Metrolink. This would enhance the experience and possibly increase business – satisfied customer, word of mouth, repeat sale, all that.
The problem of course is getting from Victorville to San Bernardino. The means getting over the Cajon Pass, and to do that you have to deal with UP and/or BNSF. BNSF currently hosts the Southwest Chief but they do it because they have to do it, not because they want to do it. The Sunset Limited is routed over UP (and does not stop in either San Bernardino or Victorville) but this does not mean that a routing via UP over the Cajon Pass is not possible, although UP is probably even less willing than BNSF to host a passenger train.
That is the missing link. If this problem can be solved then effectively there could be passenger rail service between LAUPT and LAS. I can see a three-stop express: LAUPT, SBD, and LAS. Locals welcome of course, but remember their primary market is the canned tourists.
(Canned tourist. Is that anything like canned tuna? Must taste awful.)
There is a suboption. Dedicated train LAS to Victorville, bus to SBD, dedicated train to LAUPT. Depending on projected traffic densities, the cost of construction of the terminal in Victorville, and the amortization rate on this investment, such a suboption might be a good way to get the service off the ground. Once up and running, either leave it alone (and let the Europeans goggle in amazement at the benighted Yanks who can’t run a passenger rail service), or if the money is there, try to beat something out of UP and/or BNSF.
There is something that you would not know if you live in North America, and that is the shock of this place. Some years ago I spent several months in Europe on someone else’s dime – they turned me loose for six months with a car and a major credit card. Europe and the Middle East, where I was, are not poor places. They have an advanced standard of living, do in fact live quite well, and I was comfortable there. I got used to it. But then. I got onto an airplane and flew into LAX. The first thing that hit me – and I have been living in North America most of my life – was the sheer material wealth of this place. Especially in the West, everything really is ten percent larger than life. Or so it seemed at the time, from the perspective of someone used to a European standard.
Los Angeles also struck me as shockingly filthy, but then I had been in Switzerland and Austria. I could at the time say that I had friends in Italy in the cement business. That is another story for another time, but I was in Italy to do a job.
And Mister Landey:
Yes. It happened. Erik Magnusson, you were there. Mind backing me up on this one?
AH
The above comments are general in nature and do not form the basis for an attorney/client relationship. They do not constitute legal advice. I am not your attorney. Find your own damn scurrilous pimp.
Sorry my California friends, I don’t know anything about a link from Victoville to the Antelope Valley line. Don’t know the area. Any chance of a link between Victorvlle and Governor Brown’s soon to be completed HSR into LA?
Read two stories below this one to “get” how it’s done in Germany. Just noting, not commenting.
Mister Bouzide:
Another option would to be to leave the BNSF line in Lenwood, cut across on the (I think UP) line from Lenwood to Mojave, drop down into Lancaster, and link into the Metrolink system there. That would give a shot into LAUPT without having to deal with Cajon Pass. Would UP be willing to do this? Possibly, although I cannot speak for them. But I am sure that the Virgin Train planners looked at this option and did not select it for a reason.
One of the things they would want to do is to minimize the transit time. Tourists on a train are sitting around doing nothing and most especially not spending money. You therefore want to minimize the amount of time they spend in transit in order to maximize the amount of time they have to blow their cash. Tourists on a train don’t pay the bills. Tourists spending wantonly pay the bills.
I’m sure I could write a multivariate function to describe this, and then do a regression analysis to determine the optimum transit time. But only if you pay me.
The above comments are general in nature and do not form the basis for an attorney/client relationship. They do not constitute legal advice. I am not your attorney. My school spirit is in the rumble seat.
ANNA – I can say the following with a perfectly straight face, although none of it is true:
(1) Our cat Chesapeake (b. 1983 Detroit, Michigan; d. 1999 Waukesha, Wisconsin) was the 1984 calendar girl for Chessie Systems Railroads.
#1 above is a lie but is totally believable. The calendar (which we have framed) shows an adult cat. Chesapeake and her twin sister Ohio were infants in mid-1983, when the calendar would have been made. When Chessie reached adulthood in 1984 the resemblance to the cat on the calendar is startling.
(2) Our cat Burlington Northern Santa Fe (b. 2004 Columbus, Ohio) sold his railroad to Warren Buffet for $42 Billion. Burlington kept the money, shared none of it with us for cat food, vet bills, kitty litter, and liability insurance premiums.
#2 above is also a lie.
DISCLAIMER: Wisconsin Professional Engineering license professional ethics requires full disclosure of untruths while posting on Internets forums.
I believe the Miller/Coors brewery is next to the gravel pits in Irwindale. This is where the Raiders had proposed to build a stadium in the ’80’s. Yes, BNSF has trackage rights from San Bernardino west to at least the brewery.
The main point for getting state approval to issue Private Activity Bonds is that may then be issued at lower interest rates, because the interest is tax exempt to the investor (but subject to the AMT).
The previous investors, Xpress West (?), were working with Caltrans and the CA HSR Authority to build a line in the middle of the future 138 freeway between Victorville and Palmdale. From there they would use the HSR alignment to Union Station. With the shift to build north to SF. Instead of south to LA about four years ago, xPress West was content to have passengers arrive via Metrolink in the interim. Currently it takes about 2-1/2 hours from Lancaster to LA UPT. So, Virgin is seeking other connections?
I still have memories as a child living in the LA Metro area riding along with the family on the 210 and seeing a Santa fe GP20 pulling a local. sometimes the occasional pig train. rolling down the median. One thing I do miss were the rare Union Pacific billboards scattered around the LA. Basin advertising their pig service from LA to points east..
Mister Gonzales:
It has been a ride and a half, there is no doubt.
As example, I can say the following with a straight face and perfectly truthfully:
1. My house was once raided by the FBI.
2. It involved nuclear weapons.
3. They had to hire a U-Haul to take everything away.
4. I immediately left the country.
Chew on that for a while …
The above comments are general in nature and do not form the basis for an attorney/client relationship. They do not constitute legal advice. I am not your attorney. Find your own damn mouthpiece.
Appreciated Anna Harding. With a thin thin 30 millimeter shell. And inside, it’s delicious.
I stand by the mountains being a cost hurdle. I dont see BNSF wanting to host this train into the LA Basin. And while it’s conceivable (but far from cheap) to contemplate double tracking the UP Cajon Pass line (which doesn’t host the Sunset or any other passenger train) it doesn’t reach Victorville and instead diverts to follow 138 to Palmdale.
So gaining LAUPT via Soledad Canyon is an interesting idea (especially considering today’s item to double track the Metrolink Antelope Valley line for increased frequencies. This would require Virgin to lay additional rail on the north edge of the San Gabriels to gain that trackage, but this is less costly in ROW acquisition and doesn’t involve building a mountain railroad.
“Antelope Freeway, 1/16 of a mile.”
Oh Ms Harding…. How I always look forward to your posts here, both the very serious and educated opinion of legal matters, and, perhaps even more so, the tantalizing tidbits of your past endeavors. I know I speak for many of us here when I say I’d love to hear the details of these (mis)adventures. Perhaps under a pseudo name?
Mister Rice:
Yup, that’s the beastie. I don’t think it shares track with the Gold Line, but they are on adjacent rights of way. I used to stand along that line and watch all the rich people riding their nice passenger train and think that someday I’ll be riding that train too. Unfortunately most of the trains I have ever ridden had cars with the doors in the middle, not at the ends, the kind you don’t buy a ticket for.
But that’s OK too … I met some of the most interesting people doing that stuff.
The above comments are general in nature and do not form the basis for an attorney/client relationship. They do not constitute legal advice. I am not your attorney. Order your own damn pizza. Paid for by the Vote Tirebiter Committee. Offer not available in Sector Q or R.
@Anna Harding: this line you speak of is called the “Orange Avenue Spur”.
It travels as far east as N. Angelo Ave. where it serves Amforge and takes out scrap metal from a marine shop nearby. Looking back down the line is the plastics plant (Bolocof Polymers). It tunnels under Foothill Blvd. and the Foothill Freeway and under the Irwindale train station.
As it spins around under and next to the Miller Coors plant it shares track with the Pasadena Sub next to the Gold Line. Essentially where the Sub begins/ends depending on which direction you are headed.
There is an industrial spur that serves Q&B Foods on E. 1st Street south, but you have to traverse the entire MillerCoors/Pasadena siding to reach it.
A few more industries, Veolia Chemical, Reichold Chemical, the Davis Wire siding on N. Irwindale, before it joins the San Gabriel Sub (Metrolink) at Orange Avenue Junction on Azusa Canyon Road and Los Angeles Street.
The spur takes such a roundabout route, you could probably offer tours on it.
GIRLS and GUYS – I love the Pasadena District discussion, my first arrival in the Golden State, on a train from Lamy (near Santa Fe) to Pasadena, January 1973. My only ever time in SoCal. Met a nice young lady on the train. Unfortunately she was going to Oregon, I was going to North Hollywood LA. Still remember her name, 46 1/2 years later. No her name wasn’t Anna Harding.
Of the zillions of train rides I have taken this was my favorite.
Gerald McFarlane says:
That tax-exempt bonds are not subsidized by anyone other than future revenue of the business issuing the bonds, and those bonds
I think he meant to say
That tax-exempt bonds are not guaranteed by anyone ………..
It seems to me that tax-exempt bonds are still subsidized since the government forgoes taxing the interest collected by bondholders which subsidizes the issuer because they get to pay lower interest rates.
Please correct me if I have got this wrong
Mister Bouzide:
It is raining here and I’m sitting here listening to the monotonous staccato of rain on my desktop and reading my name on my office door.
There is in fact a spur off the Pasadena Sub for the brewery in Irwindale – it is not in Azusa. I presume you mean the one just south of the 210 freeway. It’s quite a sight when one of the fermentation tanks overflows, as happens on occasion.
There is no “hard part” in getting a train from Victorville to San Bernardino. This is the Cajon Pass, and there are two major carriers already transiting that route. Getting a traffic slot (like reading Klingon) – aye, now that’s difficult.
So. You see? I told you. We used to have another but he vanished mysteriously. Now come on in out of the cornstarch and dry your mukluks by the fire.
The above comments are general in nature and do not form the basis for an attorney/client relationship. They do not constitute legal advice. I am not your attorney. Find your own damn time traveler. Paid for by the Papoon for President Committee.
That tax-exempt bonds are not subsidized by anyone other than future revenue of the business issuing the bonds, and those bonds DO NOT have to be issued by a state agency, only authorized by a state agency, as they were in Florida, the bonds where issued by what is now Virgin Trains USA and that is who pays the interest to the bond purchasers…I don’t know how many times that was made clear in the announcements about the requests to issue the bonds. So in this case both the California and Nevada agencies would have to AUTHORIZE sale of the bonds in the amount requested by Virgin Trains USA, and if so approved would be sold on the bond market by Virgin most likely through a large financial institution that specializes in bond sales(just like the ones in Florida).
@Anna Harding Did I just read a Firesign Theatre reference on Trains News Wire?
I *think* another chunk of that Pasadena Line survives as a freight rail access for the MillerCoors brewery in Azusa.
I realize Nevada is probably hungry for the tax revenue, but it’s shortsighted in my opinion. I support tax breaks for capital infrastructure projects far more than tax breaks that only get used for stock buybacks and other forms of short term share price manipulation only tenuously related to building real wealth at best. So “pay later” with more lanes on I-15 and more Vegas real estate dedicated to unproductive automobile storage.
The hard hurdle for this project, as it is/was for California HSR (however well or poorly managed) is building through or under mountain passes, which is insanely expensive.
Folks might thank Ms. Harding for her anecdotes, but wish for her hinted-at “rest of the story.”
Mister Ray:
“The legal costs just to get anything approved could be in the hundreds of millions.”
Sir!
The above comments are general in nature and do not form the basis for an attorney/client relationship. They do not constitute legal advice. I am not your attorney. Find your own damn cheap hustler.
“Train leaving now for Anaheim, Azusa, and ‘Cooook—–amonga'”. It always got a big laugh.
I don’t see how this can work. Victorville to Las Vegas is short of 200 miles, or almost 400 miles roundtrip, requiring maybe 20 gallons of gas for about $ 80. To compete train tickets would have to cost less than $ 50 each for a couple (and much less for families). I don’t think that making it in 2 hours instead of 3 is going to help a lot except on busy weekends (when traffic is solid from San Bernardino to Vegas). Except on a very busy weekend by the time someone gets to Victorville he has already driven through the worst traffic.
Metrolink does run trains to San Bernardino, the last stretch on the Santa Fe line (that’s how 3751 gets back and forth to San Bernardino). Any stops in the LA Basin are going to require substantial parking lots, something that might be hard to arrange. And of course California is a very expensive state to do business in and it is full of NIMBY’s. The legal costs just to get anything approved could be in the hundreds of millions.
Anna Harding – Your call of stations that included Azusa and Cucamonga brought back a dim memory of an old Jack Benny schtick, where one of his regulars recited the station list along the line. Anyone recall details of this, just for a laugh?