Las Vegas to California High-Speed Train Derails Again, Bonds Fail to Sell
Posted on: November 2, 2020, 10:13h.
Last updated on: November 2, 2020, 11:18h.
The Las Vegas to Southern California high-speed train project is once again being put on hold. That’s after $3.2 billion of debts to be issued through bond sales failed to attract investors.
Fortress Investment Group owns Brightline Holdings. Brightline is the developer of the proposed $8 billion rail project that would initially run from Las Vegas to Victorville, Calif. The company said over the weekend the bond offering was unsuccessful. The debt was to be issued through $2.4 billion in bonds backed by California and $800 million from Nevada.
Bloomberg reports that Morgan Stanley, which was handling the bond offering, pitched corporate junk-bond buyers and international investors. Prospective yields on the bonds were to range from 7-7.5 percent, with maturity in 2050. That’s an excessively high rate, some four times the highest rate state governments are currently paying, which highlights the risk of taking on debt for the rail development.
Proponents of the train undertaking said it would better connect Southern California with America’s gaming capital. Design plans call for Brightline trains to move at speeds upwards of 200 mph, subsequently reducing travel time and congestion on I-15.
Southern California delivers Las Vegas more visitors each year than any other region. In 2019, 18 percent of all Sin City visitors came from SoCal.
Brightline currently operates a train service between Miami, Fort Lauderdale, and West Palm Beach. The company is planning to extend its line north to Orlando and Disney, and west to Tampa.
Problem Solver?
Departing Las Vegas for Southern California on a Sunday is a frustrating and long undertaking. I-15 is often congested, and it only takes one accident to bring travel to a standstill.
A high-speed rail option, at least on paper, seems to make sense. Instead of a little under three hours in the car (in a best-case scenario) from Las Vegas to Victorville, Brightline West would reduce that travel time to 85 minutes. The train option would also be unimpeded by roadway construction or accidents.
But Brightline’s first development leg ending in Victorville drew criticism. The town is more than 50 miles by the way the crow flies to Los Angeles, and by car, takes more than an hour.
Why would anyone drive from LA to Victorville to get on a train?” asked one Casino.org reader to our earlier coverage on the concept.
“And how will that help traffic exactly? The traffic to and from Apple Valley where this ends will be the same as now,” commented another.
In Brightline’s defense, future extensions were planned from Victorville to Rancho Cucamonga in San Bernardino County, and to Los Angeles’ Union Station.
Bonds Returned
California Treasurer Fiona Ma said the bonds that were to be issued through the Brightline development will instead be used to fund affordable housing projects and other qualifying ventures.
“Unfortunately, there is not a lot of liquidity in the market, and a lot of economic uncertainty at this moment,” Ma told Bloomberg regarding Brightline. “The project is postponed until market liquidity improves.”
The train saga continues, however. Brightline spokesperson Ben Porritt explained, “We will continue to move the project forward.”
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Last Comments ( 14 )
I do not know why we have to jump so fast to high speed rail. The currently existing UP line which is already doubled tracked most of the way from Los Angeles t Barstow could be double tracked from Barstow to Las Vegas at much lower cost an a third track from San Bernadino to Hesperia to bypass slow moving freights up Cajon Pass. ATS could be added to allow for 90 mph running. If and when bonds ever can be sold further upgrades could even allow for legal speeds up to 110mph and if grade crossing were eliminated even higher speeds. More passing sidings a given as well. If you get the Los Angeles to Las Vegas time down to 5 hours and have good Metrolink connections at Union Station a lot of people would use the service
Get Amazon as investor. Shipping boxes and transporting people and change the name as Amazon express.
TriTrack was proposed at the Nevada High Speed Rail board meeting that would cost the state zero dollars as a toll system. It travels at 180 mph on elevated guideway so not killing endangered species like this train will. Instead of stopping at the mountain pass like this slower train it went to downtown LA, Disneyland and on to Sea World in San Diego. This was just a way to sell billions in bonds and not much to do with transportation for the public.
We need the high speed trains to ease the highway traffic and give riders a whole new experience. I spent 20 years streamlining my railroad to profitability. If you build it they will come.
don't China have high speed trains? USA FAILED.
How can you assure the people of Las Vegas and Nevada that once such a hi-speed rail link is built, California won't POUR ALL OF ITS HOMELESS DRUG-ADDICTED TRASH on it and SHIP THAT SKID ROW GARBAGE TO US!? Just a thought...
It will increase commerce in both California and Nevada
Get some private funding Jeff Bessos? I can peddle the project. The Chinese?
Do your company have service from San Jose
I don't have and opinion on it
Solution! Cybertran.
People before trains simple same for California's so called sumper train Dumbo Democratic s
To be honest when people go to cali from vegas. The only thong they wanna see is orange county beaches. Then take a straight shot up or down the coast from their. Unless were going to disney land. Or the Kardashians. We could care less about the hills unless its beverly. Or chino. Or lugana we do like the mally hills. Get it malls? Cause we love to shop everywhere. But. Sanfransico. Its just too wierd to shop there. I mainly just fly kites out that way.....and most of us already died from the measels on the organ trail in 1988.
Wow! California high railways won't be done by 2025. New Las Vegas NV join with California high-speed rail by 2050.