Updated June 21, 2021 - 6:17 pm
The company behind a planned high-speed rail line from Las Vegas to Victorville, California, is putting on the brakes until at least 2022.
Brightline West said Monday that it will wait until next year to request private activity bonds from Nevada and California that are essential for funding the project.
In the works for over a decade, the project was on track to break ground in 2020 before the company pulled a planned bond offering late last year.
Brightline spokesman Ben Porritt said the coronavirus pandemic has slowed the planning for a proposed Rancho Cucamonga station that would link the Victorville station into downtown Los Angeles.
“The Brightline West team has made significant progress during the past year as California and Nevada dealt with the historic pandemic,” Porritt said in a statement. “We are working with a number of partners and have great support in Nevada and California. COVID has impacted just about everyone, including our cooperating agencies, and as a result we’ve shifted our timeline for this request to 2022.”
Terry Reynolds, director of the Nevada Department of Business and Industry, confirmed that Brightline approached agency officials last week about the delay in the bond request.
“They indicated they were going to wait until next year (to apply for the bonds),” Reynolds said. “So, we’ll have to see what happens.”
Reynolds backs Brightline’s plan to delay the bond application submission as it continues to flesh out the Rancho Cucamonga connection, which would open up the critical connection into downtown Los Angeles.
“I think they’re smart in doing that. I think it makes a lot of sense,” Reynolds said. “I think the bond market will improve, but also they’re working on the connection into the L.A. basin, so I think that is a smart move on their part.”
The private activity bonds from Nevada would total $200 million, but under IRS guidelines, Brightline would be able to market them for up to four times that amount. Similarly, the company is seeking $600 million in private activity bonds from California, which also could be marketed for up to four times that amount.
After being awarded $800 million in private activity bonds in 2020, Brightline launched a bond sale totaling $2.4 billion. Shortly after launching the bond sale, however, Brightline pulled it amid unstable market conditions. Both states then reallocated the bonds initially awarded to Brightline toward affordable housing projects.
The bond funds were planned to go toward constructing the initial rail line from Las Vegas to Victorville, as well as a station in each city. Future work would have connected the Victorville station to planned stations in Rancho Cucamonga and Palmdale, California. At full buildout, the project was projected to cost $8 billion.
“Private activity bonds are a great way to enable private sector investment to modernize America’s passenger rail infrastructure at both the federal and state level, and we expect they will play a meaningful role in the success of this project,” Porritt said.