Indian River County Commissioners have committed another million dollars to fight Virgin Trains USA, formerly known as Brightline, and are proceeding with a federal lawsuit against the company – even though their own attorneys warned them a court victory will not keep high-speed trains from running through Vero Beach.
Commissioners voted 4-1 on Nov. 21 to reject a multimillion-dollar offer from Virgin Trains USA to have the county drop its pending lawsuit opposing the company’s plans. Oral arguments for the lawsuit begin Nov. 27 in Washington.
“I agree, overall, it’s not a perfect agreement; but as the outside legislative counsel to Indian River County, I recommend that the commission of IR County vote in favor of the proposed settlement agreement,” Steve Ryan, the attorney the county hired to represent it in the federal lawsuit, wrote in a prepared statement. The statement was read to commissioners by county attorney Dylan Reingold.
Like Ryan, Reingold encouraged the commission to carefully consider Virgin Trains USA’s offer to pay millions of dollars to improve railroad infrastructure, including installation of more than $2 million for safety fencing and up to $8.2 million in maintenance upkeep over the next 14 years. Virgin Trains USA also promised to build a station somewhere on the Treasure Coast, a concession not included in earlier proposals.
“Brightline has made it very clear to us – and we believe this – they have made the most concessions they’re going to make to this community as part of this deal,” Reingold said. “And, going forward after the oral arguments happen, if the deal gets rejected, I don’t think there will be another, better deal presented by them as part of a settlement.”
Reingold cautioned the commission that the proposed settlement addressed almost all of the issues listed in the county’s lawsuit, including environmental, noise pollution and cost concerns. Rejecting the company’s offer leaves attorneys very little room to argue their case, he said.
He also pointed out that the $1.15 billion bond sale the county’s lawsuit aims to stop will already have taken place by the time the case is settled, meaning that the rail company will likely have the funds it needs to extend service from West Palm to Orlando, even if the county wins in court.
It will be at least two months after the Nov. 27 hearing before the judge makes a ruling on the lawsuit, Reingold said.
Meanwhile, the bonds have already been issued and Virgin Trains USA has stated it will begin selling the bonds – which are expected to sell quickly – in December.
“They will go sell the bonds in December, regardless,” Reingold said. “There is no injunction preventing them from doing so.”
When commissioners asked what would happen if they won the lawsuit, Reingold said it would be too late to matter. It’s unlikely that the buyers would be asked to return the bonds and the company ordered to return the money.
During the past five years Brightline has prevailed in eight other lawsuits filed by Indian River County and other municipalities with the aim of stopping the train from operating through the Treasure Coast.
Reingold, who was asked by the commission to explain the Virgin Trains USA agreement offer, received an angry tongue-lashing from Board Chairman Bob Solari during the meeting. Solari made it clear before the meeting started that he was strongly opposed to the offer.
“Stop talking, stop it,” Solari yelled at one point when Reingold was attempting to clarify a question asked by another commissioner. “You’re just our legal counsel. We are the policy-makers here, not you. That’s our job. Our job is to make policy.”
Officials for Virgin Trains USA say they have been granted the necessary permits to move ahead with their expansion efforts and have already started construction. Even if the county won the lawsuit and Virgin Trains USA did have to forfeit the bonds, company officials have said they would seek alternative funding.
They seemed to do just that recently when Brightline announced a new partnership with global corporate giant Virgin Group, at the same time as it announced the train project’s new name. The agreement, which makes Virgin Group a minority investor, will provide a new source of cash for the project.
The 3-hour commission meeting was filled with drama and tension as all five commissioners took turns explaining why they did – or didn’t – support the proposed agreement.
Commissioners Tim Zorc and Peter O’Bryan expressed support for the agreement. Both men argued that the county has already spent about $3 million on the pending lawsuit. They said if the county rejected the offer and ended up losing the lawsuit, Virgin Trains USA would be under no obligation to help the county pay for fencing, maintenance or other railroad infrastructure costs.
Solari and Commissioner Joseph Flescher argued that the train would pose a safety threat and not provide any financial revenue for the community.
“This isn’t about whether we have a 50-50 chance of winning our lawsuit, or a 10-percent chance,” Solari said. “This is about a moral obligation to do what’s best for our community.”
Heightening the tension was the announcement that Martin County Commissioners had just voted 4-1 to accept the Virgin Trains USA proposal. The company had earlier told Indian River and Martin officials that the agreement would be voided unless both counties gave their approval.
Vice-Chair Susan Adams appeared to be the deciding vote. At first Adams said she was going to vote to accept the proposed agreement, but added that she wasn’t sure if she could vote to support it “at that moment.”
“I don’t think, realistically, that we can stop the rail expansion from happening,” said Adams, whose comments were greeted by a loud chorus of boos from many of the approximately 100 residents in attendance. “I just don’t have a good understanding of it.”
When the vote came, O’Bryan voted to accept the agreement, Solari and Flescher voted no and Adams, after several moments of hand-wringing, also voted no. Zorc then decided to cast a no vote, because he said he wanted to support the majority opinion.
