Brightline West Lands $2.5B in Private Activity Bonds

“Connecting Las Vegas and Southern California will provide wide-spread public benefits to both states, creating thousands of jobs and jumpstarting a new level of economic competitiveness for the region,” Brightline Founder and Chairman Wes Edens said. “We appreciate the confidence placed in us by DOT and are ready to get to work.” (Rendering Courtesy of Brightline West)

The U.S. Department of Transportation (USDOT) on Jan. 23 reported approving a $2.5 billion private-activity bonds allocation to the Brightline West High-Speed Intercity Passenger Rail project linking Las Vegas and Southern California.

The proposed $12 billion, 218-mile system would operate primarily in the median of the I-15 right-of-way with trains capable of reaching 186 mph or more—cutting the trip to two hours or half the time to travel by car (see map below). It would offer stations in Apple Valley and Hesperia, with the Rancho Cucamonga station located next to an existing Metrolink station, allowing for a link to commuter rail service, including to downtown Los Angeles. Additionally, Brightline West has reported working with the California High Speed Rail Authority on future connectivity in Palmdale.

The Brightline West project is slated to bolster tourism, create 35,000 jobs, ease traffic on I-15, and cut more than 400,000 tons of carbon pollution per year.

USDOT in 2020 approved a private-activity bond allocation of $1 billion for Brightline West, which brings the total allocation to $3.5 billion. The Secretary of Transportation is authorized by Congress to allocate up to $30 billion in private activity bond authority through the Build America Bureau for qualified surface transportation facilities. According to USDOT, the allocations provide privately financed projects with access to tax-exempt bonds “lowering their cost of capital and increasing private-sector involvement in the delivery of transportation projects.” The Bipartisan Infrastructure Law, signed in November 2021, doubled the available private-activity bond authority from $15 billion to $30 billion, USDOT reported.

The Brightline West project in December 2023 was awarded a $3 billion grant from the Federal Railroad Administration (FRA) through the Federal-State Partnership for Intercity Passenger Rail Grant program. Additionally, last June the San Bernardino County Transportation Authority received a $25 million RAISE program grant from the USDOT to fund the final design and construction of two Brightline West stations and associated facilities in Hesperia and in the Victor Valley of San Bernardino County.

“As the first true high-speed rail system in America, Brightline West will serve as the blueprint for connecting cities with fast, eco-friendly passenger rail throughout the country,” Brightline Founder and Chairman Wes Edens said. “Connecting Las Vegas and Southern California will provide wide-spread public benefits to both states, creating thousands of jobs and jumpstarting a new level of economic competitiveness for the region. We appreciate the confidence placed in us by DOT and are ready to get to work.”

In related developments, earlier this month Brightline West announced it is launching field investigation work in Nevada, including geotechnical borings and samplings, utility potholing and land surveying; the work is being done in coordination with the Nevada Department of Transportation (NVDOT). Also, in December the FRA announced it was seeking comments on whether to grant a waiver of its Buy America requirements to the NVDOT for the high-speed rail project. The waiver would cover trainsets, signal systems, high-speed rail turnouts, and fire alarm systems, FRA said, based on the “domestic nonavailability” of such components, as identified by NVDOT’s railroad operating partner (Brightline West) and the two potential suppliers (Alstom and Siemens) of the rolling stock and signaling systems.