Local tourism authority to buy Las Vegas monorail for $24 million
The Las Vegas Convention and Visitors Authority approved the acquisition on Tuesday and plans to guide Las Vegas Monorail Co. through Chapter 11 bankruptcy, dividing the $24 million among creditors. The move signifies the collapse of a non-compete agreement that prevented other companies from developing systems on the east side of Las Vegas Boulevard.
the Las Vegas Convention and Visitors Authority voted to acquire the Las Vegas Monorail for over $24 million.
“Scaling up now and overseeing this transition is an important part of what we can do for Las Vegas,” Steve Hill, CEO of LVCVA said at a public board meeting on Tuesday, when the tourism agency voted to approve the acquisition, as reported Reno Gazette Journal. The elected Clark County commission also approved the move, while Las Vegas Mayor Carolyn Goodman voted against it.
The elevated train travels a 4-mile route along the Las Vegas Strip, but operations have been suspended since March due to the coronavirus. The rail line is currently privately owned and operated Las Vegas Monorail Company. It makes six stops north-south, including at the Las Vegas Convention Center and several hotel-casinos east of the Las Vegas Strip.
The tourism agency taking over the monorail means the collapse of a non-compete agreement that prevented other companies from developing systems on the east side of Las Vegas Boulevard, says Hill. The monorail does not use public funding for its operations and is billed as the only private public transportation system in the United States, according to the company’s website.
The LVCVA plans to guide the Las Vegas Monorail Co. through Chapter 11 bankruptcy, dividing the $24 million among creditors. The monorail system will likely stop operating within the next 10 years, Hill said, because no company produces the cars that currently run on the tracks. Replacing the wagons could cost at least $200 million, he said. “The system cannot financially support this type of investment,” Hill said.
The deal, Hill said, creates the opportunity for the LVCVA to find competing transportation systems that can replace the monorail when it becomes obsolete.
The boring company of Elon Musk. is due to begin testing an east-west underground mover designed to transport conventioneers between the existing convention center exhibit halls and an expanded facility later this month. Musk also got the go-ahead from county officials to expand his loop system using driverless cars from the convention center to Wynn Resorts’ Encore and the Resorts World project that is nearing completion across the street. street on the Las Vegas Strip.
Hill said the tourism authority would shelve proposals to build a new monorail station near the Sands Expo and Convention Center and The Venetian and an extension of the MGM Grand to the Mandalay Bay complex and Allegiant Stadium, the Associated press reports.
The monorail began operations in July 2004. But it stopped two months later due to problems, including parts falling from the elevated track. It resumed operations in December. Ridership never reached builders’ projections, peaking at nearly 8 million per year before the major recession that began in 2007. In recent years, ridership has fallen to less than 5 million per year.
The company reorganized after filing for Chapter 11 protection in 2010 and emerged from bankruptcy two years later.