Las Vegas LVCVA Monorail Reducing Costs
Executives at the Las Vegas Convention and Visitors Authority believe they can operate the Las Vegas monorail system at a lower cost than current management because they will not be required to pay some of the company’s expenses.
LVCVA president and CEO Steve Hill on Tuesday cited lower costs for offices and not paying the company’s current board of directors as a way to cut costs.
But there are other expenses that could be cut once the system reopens and the LVCVA is in the driver’s seat.
The biggest expense is salaries, and the company’s four top executives receive a total of over $ 1 million per year.
According to an IRS Form 990 for nonprofit organizations, President and CEO Curtis Myles receives $ 361,728 per year, including $ 17,995 in non-taxable benefits, according to a file from 2018, the most recent year available. A spokeswoman said no updates were available.
The monorail is a 3.9 mile electric transit system. Some of Myles’ transportation industry contemporaries receive much less compensation for the broader oversight for which they are responsible.
Kristina Swallow, director of the Nevada Department of Transportation, which oversees 5,400 miles of freeways with 1,229 bridges statewide, for example, is paid $ 125,434 a year. MJ Maynard, CEO of the Southern Nevada Regional Transportation Commission, receives $ 210,412 per year to oversee the 10,053 miles of Clark County roads as well as several layers of public bus transportation.
Remuneration of monorail managers
Other monorail executives and their compensation include Ingrid Reisman, senior vice president of corporate communications, $ 251,794 per year, including $ 17,902 in non-taxable benefits; Peter McCann, Senior Vice President and Chief Operating Officer, $ 263,209, including $ 29,120 in benefits; and Barrick Neil, vice president of operations, $ 233,536, including $ 25,505 in benefits.
According to the form, senior managers typically work 50 hours per week.
Reisman said Thursday that in addition to the layoff of 115 employees in March when the system was shut down, top executives suffered a 30% pay cut.
The form specifies that each director is responsible for about one hour of work per week on average. Chairman of the Board Donald Shalmy and directors Bruce Woodbury, Virginia Valentine, Mark Russell, Michael Solow and Robert Manzo paid $ 42,000 that year. Director Ryan Hammer received $ 38,500 that year and Rick Mazer received $ 3,500.
Reisman said when the system shut down in March, administrators were no longer being paid.
Hill also said LVCVA would be able to provide office space and eliminate the rent the company pays for space in an office park on Howard Hughes Parkway. Each year, the company pays $ 116,043 for the space.
The company has other significant expenses managed through independent contracts. According to the 2018 filing, the company pays $ 1.5 million per year to Las Vegas-based CA Group Inc. and $ 1.1 million to Los Angeles-based Gensler of Nevada for design work. and engineering; $ 505,281 to DLP Services LLC for a concierge service; $ 436,356 to Los Angeles-based Kone Inc. for escalator maintenance; and $ 292,079 to Stradling Yocca Carlson, based in Newport Beach, California, as legal counsel.
The origins of the monorail
The Las Vegas monorail has its roots in a short point-to-point system between the MGM Grand and Bally’s that operated for free from 1995. Eventually, former McCarran International Airport manager Robert Broadbent became the leader of the development of the system as it now exists. .
In 1997, Nevada lawmakers passed a law allowing a private company to operate the system and a team consisting of Liaise Corp., train supplier Bombardier Transportation, contractor Granite Construction Co., designer Gensler. & Associates, engineer Carter-Burgess and financier Solomon. Smith Barney was assembled to develop it.
Broadbent failed in its efforts to place the monorail in the center of Las Vegas Boulevard when the resorts retreated. Instead, he developed a route east of the Strip in the hopes that the success of the system’s ridership would lead to expanding the system to the West Side, McCarran, and downtown Las Vegas.
The MGM-Bally’s section was closed in 2002 and the new $ 650 million system was built with seven stations and nine Bombardier trainsets.
The system opened in July 2004, but had a difficult start during commissioning when parts fell from the train to the ground below. No one was hurt, but it damaged the credibility of the system from the start and the system had to be shut down for four months.
Reopening in December 2004, the system was a success for CES 2005, transporting conventioneers along the system to the Las Vegas Convention Center. Ridership peaked around 2007, when the system was carrying around 7 million passengers per year.
But as revenues dwindled, the company filed for Chapter 11 bankruptcy in 2010 in the wake of the Great Recession. Ambac Assurance Corp. insured $ 451 million in tax-exempt bonds used to finance the company’s purchase of the MGM-Bally line of MGM in 2000.
In court, Myles said that as of 2004, the company used the proceeds from initial financing and debt service reserves to keep operating, but had depleted those resources. He argued that while the revenues were sufficient to cover operations, they were never sufficient to service the debt.
Once the company emerged from bankruptcy, it continued to struggle financially and was never able to fund some of the expansions that executives saw as critical to long-term success.
On Tuesday, when LVCVA’s board of directors voted 12-1 to acquire the monorail for $ 24.46 million, Hill noted that another bankruptcy filing is expected. This time, it will be a âprepackagedâ bankruptcy that the court will have to approve before the deal is reached.
Myles, at Tuesday’s meeting, declined to comment on his plans. LVCVA plans to choose a network manager at a future meeting, knowing that the system could become obsolete within a decade. Hill hasn’t ruled out hiring employees familiar with the system to make it work.
Late Tuesday, the monorail company filed an email statement.
“The Las Vegas monorail has served a critical mobility need in the resort corridor for more than 16 years, carrying approximately 5 million passengers per year and helping to reduce emissions and congestion,” the statement said. âLike many other businesses, we were forced to close on March 18 due to the COVID-19 pandemic and are not yet able to reopen. Accordingly, it is in the best interests of Las Vegas Monorail Co. to file for bankruptcy and to effect a sale of the assets of the system to a party who intends to keep the system in operation.
âThe action (Tuesday) of the Clark County Commission and LVCVA is making this happen and will help ensure that the mobility benefits provided by the monorail during conventions, events and throughout the year in the hallway of the complex continues. “
On Thursday, Reisman said lawyers for the company had advised not to release any documents to the public until bankruptcy is filed in court.