Las Vegas monorail price revealed at $ 24.26 million
The Las Vegas Convention and Visitors Authority would buy the Las Vegas Monorail Co. for $ 24.26 million if the organization’s board of directors approves the deal next week.
The LVCVA presented the details of the transaction, for consideration on Tuesday, in the publication of the meeting’s agenda. A separate meeting earlier today will give the Clark County Commission an opportunity to decide on the transfer of franchise rights from the county to LVCVA.
While it’s possible the county will reject the transfer, that’s not likely because LVCVA chief executive officer Steve Hill has informed county officials of the LVCVA’s plans.
Hill alerted the board of directors on July 14 that he was in early talks for LVCVA to purchase and operate the 3.9-mile transit system, which began operating in 1995.
With the award, the LVCVA revealed:
■ $ 24.4 million from the Las Vegas Convention Center District fund would be transferred to the organization’s equity fund to complete the transaction. The Convention Center District fund has $ 95 million for phase 3 of the planned LVCVA renovation project. When the coronavirus pandemic struck, LVCVA’s board of directors suspended this project.
■ The $ 24.4 million for the Convention Center District fund would be repaid with a new debt of $ 21.5 million. The bond transaction would be sold through a competitive direct placement. Requests for offers are due on September 24 and approval of the final bond resolution would come at the LVCVA board meeting on October 13. The bond would close on October 15. A public hearing on the debt proposal is scheduled for Tuesday.
■ The difference between the amount drawn from the Convention Center District fund and the new debt will be covered by a decommissioning fund of $ 6.76 million, established in the event of system failure and the need for demolition. LVCVA would take responsibility for removing the infrastructure if that happened.
■ Once the purchase agreement is approved, Las Vegas Monorail Co. would file for Chapter 11 bankruptcy protection and file a petition with the US bankruptcy court to approve the agreement. Payment under the purchase contract would pay all secured creditors and authorized claims of commercial creditors. The sale process would include an auction, and it is possible that another party would outbid the LVCVA.
■ LVCVA would enter into a contract for the management and operation of the monorail after the purchase was closed and this agreement would be presented to the board of directors at a future meeting.
LVCVA officials declined to comment further on the transaction, saying more details would come at Tuesday’s meeting. There was no indication whether Las Vegas Monorail Co. President Curtis Myles or any other staff member would continue to work.
Agreement helps Boring Company
Hill previously noted that LVCVA’s acquisition of the monorail franchise would benefit transportation along the Strip Corridor, as the monorail company holds a non-compete designation that would prevent future transit systems from functioning.
LVCVA might be anxious to remove this designation if The Boring Company’s proposal to develop a city-wide underground transportation system comes to fruition.
The Boring Company, a business started by entrepreneur Elon Musk, is building a mile-long passenger transportation system under the Las Vegas Convention Center to transport conventioneers across the Convention Center campus .
The system, a dual-tunnel passage used by Tesla vehicles in autonomous driving mode, is weeks away from testing. Tesla is another of Musk’s businesses, and the Convention Center’s proposal would use vehicles on Tesla chassis, some carrying up to 16 passengers at a time.
Boring Company officials hope to use the people carrier as a demonstration of the technology, and they hope to build a similar operation to serve the complex’s corridor, Allegiant Stadium and McCarran International Airport.
Wynn Resorts Ltd. and Genting Group’s Resorts World Las Vegas have already signed up to have their own Boring Company tunnels transporting hotel guests from their respective resorts to the Convention Center.
Clark County’s role in the agreement involves the transfer of franchise rights to LVCVA.
One of the conditions for approving the transfer is that LVCVA may not incur or spend income for the payment of any operating subsidy or any capital improvement exceeding 3% of LVCVA’s budgeted operating income for that purpose. fiscal year, not to exceed $ 10 million. per year, without first obtaining the approval of the committee.
If the LVCVA takes over the franchise contract, it will assume the obligation to demolish the system in the event of failure. If the LVCVA closes the escrow on the agreement, the county will transfer the money remaining in a county-owned sanitation fund to the LVCVA.
A Clark County spokesperson said there was $ 6.76 million in the remediation fund.
The mayor is not happy
Not everyone associated with the LVCVA is excited about the prospect of owning the monorail.
Las Vegas Mayor Carolyn Goodman, LVCVA Board Member, suggested on July 14 that MGM Resorts International acquire the system so that it can expand from the south end of the monorail to MGM Grand in Mandalay. Bay, where a new station has been proposed. The new Mandalay Bay endpoint would be within walking distance of Allegiant Stadium.
“Now is not the time to spend money,” Goodman said, noting that the LVCVA has had to lay off or leave employees during the pandemic and that state government health guidelines and security have banned Las Vegas from hosting conventions or trade shows. .
She also said she was disappointed that despite previous plans, the monorail never had enough financial success to expand to McCarran or downtown Las Vegas.
“To take any kind of public money for this right now is a mistake,” she said, adding that she wanted to hear the proposal next week “out of respect for Steve Hill.”