The party's over for the 'Florida Fun-Train'

First American Railways Inc. says it ran out of money to keep operating. Customers who charged tickets can expect a credit on their next bill.

 © St. Petersburg Times, published September 18, 1998

fter gushing red ink for two years, the Florida Fun-Train rolled onto an idle siding in Fort Lauderdale on Thursday, possibly for good.

The decision to shut down the novelty train that had been taking passengers from Tampa and Fort Lauderdale to Orlando has left hundreds of customers waiting for refunds.

"We ran out of money to keep operating," said Alan Jacobs, chief executive of troubled First American Railways Inc. "But everyone who put their trip on a credit card will get a refund on their next credit card bill. We're not going to lock the doors and walk away."

Those holding bookings through other means of payment are being asked to call the company's corporate headquarters in Hollywood, Fla. The toll free number is (888) 920-0606. Company officials declined to say how many customers were affected by the shutdown but said the train had bookings well into the winter tourist season.

The eight-car train was designed to move tourists from beach destinations to Central Florida's theme parks at $45 to $59 a trip. The cars were loaded with diversions including video games, live entertainment, tiki bars and restaurants. But the rail line never was able to nail down a route that provided profits. It could not get approval until last week to end its ride in downtown Orlando. Until then, riders had to take a bus to get to theme parks from the end of the line in rural Poinciana, about 15 miles from Walt Disney World.

First American Railway's board, which has been trying to raise more money from investors since June, had been operating on a week-to-week basis as its cash flow dwindled. The company has yet to decide whether to file for protection from creditors in U.S. Bankruptcy Court. Company executives still hope to raise money to get back on track.

But many investors already have taken a ride they may not want to repeat. The company suffered from overly rosy projections, was up and running before it was truly ready and ran through three CEOs in less than two years. One of the former CEOs sued, claiming he was forced to resign because of a sexual harassment claim he says was bogus. In his suit he said he realized upon arrival that the company was undercapitalized from the start and that he was ousted by a board unwilling to let him put on the brakes.

First American lost $9-million through the first six months of 1998. To keep the Fun-Train rolling this summer, one of the company's founders pumped in $2.5-million to buy back a successful Colorado scenic railway that First American operates but no longer owns.

The stock, which once traded as high as $5.50 after the company raised $16.5-million in a 1996 public offering, has been hammered. Its price slumped below a dime a share after the company's financial woes worsened in the past month. On Thursday the stock closed at 2 cents a share, down 41/4 cents.