Las Vegas Tourism Agency Ready to Buy Monorail for More Than $24M
Posted on: August 27, 2020, 02:19h.
Last updated on: August 27, 2020, 03:05h.
The Las Vegas Convention and Visitors Authority (LVCVA) will ask its board of directors next Tuesday, September 1, to approve its plan to spend $24,260,000 to acquire the Las Vegas Monorail Company (LVMC).
The tourism agency’s agenda meeting notes for next week divulge its plans to complete the acquisition. With board approval, the LVCVA would cover the Monorail purchase by withdrawing $24.44 million from its fund being used to expand the Las Vegas Convention Center District.
The debit would be reimbursed by taking on $21.5 million in new debt through the issuance of bond placements. The difference between the amount taken from the Convention Center District and new debt would be easily covered by a special reserve held by Clark County and LVMC.
Since the LVMR filed for bankruptcy protection back in 2010, money has been set aside in an escrow account held by the Monorail Company and Clark County. That is to be used should the transportation system ever need to be torn down.
Today, that account is worth $6.76 million. Those funds, under the LVCVA plan, would be transferred to the LVCVA, and the Authority would assume the responsibility of decommissioning and removing the Monorail system should it need to be demolished in the future.
Monorail Bleeding Money
The Las Vegas Monorail is the only privately owned public transportation network in the United States. The Monorail is a seven-stop, 3.9-mile elevated transport system along the east side of the Las Vegas Strip.
Its stations are MGM Grand, Bally’s, Flamingo, Harrah’s, Las Vegas Convention Center, Westgate, and Sahara. The Monorail has nine climate-controlled, driverless trains that can each accommodate 224 passengers.
The Monorail has averaged 4.8 million annual riders over the past five years (2015-2019). But it’s still unprofitable, and racking up debt.
The LVCVA says LVMC currently has $20.5 million in unresolved liabilities. Should the acquisition move forward, the Monorail Company would file for bankruptcy, and the LVCVA would acquire the company and pay its outstanding creditors.
One critical component of buying the Monorail is that it would allow the LVCVA to remove a non-compete clause the company holds on other public transportation projects on the Strip. The LVCVA has spent $52.5 million on two tunnels constructed by Elon Musk’s Boring Company that will better move convention goers around the Convention Center.
Las Vegas Mayor Carolyn Goodman isn’t in favor of the tourism agency buying the transport system. She says the Monorail does nothing for downtown, isn’t connected to the airport, and predominantly serves properties owned by MGM Resorts and Caesars Entertainment.
This isn’t the time to be spending money,” Goodman said recently. “To take any type of public dollars for that at this time, to me, is wrong.”
The effort is being led by LVCVA CEO Steve Hill, who has already briefed the board on his Monorail plans. If everything goes as Hill hopes, the LVCVA would contract the management and operations of the Monorail to a third-party.
The Monorail has been disabled since mid-March.
Related News Articles
Similar Guides On This Topic
Related News Articles
December 2, 2021 — 8 Comments—
November 20, 2021 — 4 Comments—
October 31, 2021 — 3 Comments—