Advertisement
  1. Business

Florida's Brightline rail service partners with Sir Richard Branson's Virgin Group, will become Virgin Trains USA

TAMPA — Brightline, the Miami-based train and real estate development company that wants to expand to Tampa, has a new partner: the Virgin Group, run by swashbuckling British tycoon Sir Richard Branson.

Brightline announced the partnership Friday and said it would change its name to Virgin Trains USA this month. Virgin Group will make a minority investment in Brightline, which will be managed and operated by Brightline executives and affiliates of its parent company, Fortress Investment Group.

"Virgin has built a respected and trusted brand in travel and hospitality," Brightline chairman and co-founder of Fortress Investment Group Wes Edens said in an announcement about the partnership. "With our shared focus on customer experience, powered by a culture of innovation and disruption, we are well-positioned to build on our success."

Virgin Group has more than 60 companies in travel, leisure, telecommunications, media, music, entertainment, financial services, health and wellness. In the United Kingdom, those interests include Virgin Trains, a high-speed intercity passenger rail system that it has run for 21 years. Last year, Virgin Trains carried more than 38 million passengers on the UK's West Coast Main Line.

"Given our shared values and Virgin's track record, this partnership will help amplify our efforts and growth potential as we seek to expand to new markets," Brightline president Patrick Goddard said.

In a blog post Friday, Branson said he and Brightline's Edens are "kindred spirits" on rail and described how he first saw Brightline's Miami operation a little over a year ago.

"It was clear from … our first visit" that Brightline "had an exciting vision and the skills for American rail travel that no other private American enterprise has been able to do for a century," Branson said. "We have a long history of creating innovative businesses that shake up markets and establish loyal followings. We transformed domestic air travel with Virgin America and have spent more than a decade looking for a similar opportunity to change the face of American railways. We believe Brightline is at the forefront of this innovation and the ideal partner to work with to alter perceptions and traveling habits across the United States."

In Tampa, Brightline this month submitted the sole proposal to run an intercity passenger train from Orlando to Tampa in response to an open call for proposals from the Florida Department of Transportation.

That was a reversal for the state. In 2011, Florida Gov. Rick Scott rejected federal funding for high-speed rail on Interstate 4. Last year, Scott and his wife Ann invested at least $3 million in a credit fund for Fortress Investment Group, according to his latest financial disclosure. A Scott campaign spokeswoman has said "the governor's blind trust is managed by an independent third party to shield his investments from his direct control and to avoid any potential conflicts of interest. As such, the governor has no control of what is bought or sold in the blind trust."

This summer, after Brightline said it wanted to create an Orlando-to-Tampa leg without using taxpayer dollars, the state issued a request for proposals from any interested company. Brightline has proposed running its trains along I-4, leasing land owned by the state and the Central Florida Expressway Authority.

Brightline's business model pairs city-to-city rail service with high-end real estate development. In May, it started running a rail service with stops in downtown Miami, Fort Lauderdale and West Palm Beach. The trains are new and quiet, with roomy seats and robust WiFi, and they move at up to 79 mph, or about double the typical speed of traffic on Interstate 95. The company says the service makes money because, unlike commuter rail, its limited number of stops helps hold down the cost of staffing and equipment. It plans to extend the line to Orlando by 2021.

In addition to running its rail line, Brightline is developing the MiamiCentral project in the Overtown area near downtown Miami. That venture includes 1.6 million square feet of development, with two office towers, two apartment towers, 130,000 square feet of stores and restaurants and a train station. Financing for the development was two-thirds private equity, one-third private activity bonds.

In Tampa, Brightline has looked at several sites between downtown and Ybor City for a terminal. They include the Tampa Park Apartments, the former N Morgan Street jail site, Tampa Union Station and the GasWorx property near the proposed location of the baseball stadium that the Tampa Bay Rays wants to build in Ybor City.

Mayor Bob Buckhorn said this week he hasn't heard whether Brightline has picked a preferred site for a Tampa terminal.

"We're happy to work with them," he said. "Whatever permitting's involved, we're all in. I want this to happen. It will be a huge shot in the arm for us at the right time when a lot of other pieces are falling into place."

The Florida Department of Transportation is scheduled to consider Brightline's Orlando-to-Tampa proposal on Nov. 28.

MORE: Go here for more Business News

Contact Richard Danielson at rdanielson@tampabay.com or (813) 226-3403. Follow @Danielson_Times

YOU MIGHT ALSO LIKE

Advertisement
Advertisement