California officials on Wednesday could put a private company’s plan to build a high-speed train connecting Las Vegas and Southern California one step closer to reality by helping it access billions of dollars in private financing.
A committee chaired by state Treasurer Fiona Ma is likely to approve $300 million in tax-exempt private activity bonds for Virgin Trains USA this year, followed by the same amount again next year. That will allow the company to issue about $2.4 billion in debt, roughly half of what it needs to build the first private, high-speed train in the U.S. West.
Ben Porritt, senior vice president for public affairs at the company, called the approval “a major milestone.”
“This is a significant private investment that will generate thousands of new jobs, spark new mixed use and housing development and remove nearly 4.5 million cars off the road each year,” he said in an emailed statement.
Virgin Trains USA, previously known as Brightline, already operates a high-speed train in Florida. Its California-Nevada project is expected to span 185 miles and take 90 minutes to move passengers between Las Vegas and Victorville, California, which is northeast of Los Angeles. Construction is expected to start in 2020 and take three years.
Virgin is in the process of seeking similar financing help from Nevada and the federal government.
Like California’s publicly funded high-speed rail project, the private project has hit stumbling blocks. It was first proposed in 2005 and has changed ownership multiple times.
But it’s now expected to have its trains up and running long before passengers can travel on the state’s proposed high-speed rail line linking Los Angeles and San Francisco. The state doesn’t expect to have trains running until 2028, and then only on a line of track in the Central Valley.
Virgin’s ability to access private financing could raise questions about why California’s public project hasn’t attracted the same investment. As it stands, the state has less than half the $77 billion it needs to build the full line, and no private companies or donors have committed money.
Ma, a Democrat, said she rode on one of Virgin’s trains in Florida and described it as swankier than a traditional train. Building such a project between Las Vegas and California will provide economic development, ease travel and improve the riding experience, she said.
“It is like moving people to the next level of train travel where train travel is going to be really hip and fun,” she said.