Travel agency approves plan to purchase Las Vegas monorail
Posted on Tuesday, September 1, 2020 | 4:05 p.m.
Updated Tuesday, September 1, 2020 | 10:20 p.m.
The Las Vegas Convention and Visitors Authority has reached an agreement to purchase the monorail transit system along the Resort Corridor.
The authority’s board action on Tuesday gave its chairman and chief executive officer Steve Hill the power to execute a purchase agreement with Las Vegas Monorail Co. of no more than 24.26 millions of dollars.
The motion was passed with the approval of all members of the Board of Directors present except Las Vegas Mayor Carolyn Goodman.
Hill said the potential transaction will likely include Monorail Co.’s Chapter 11 bankruptcy filing.
The authority would join the Monorail Co. in what is commonly referred to as a prepackaged bankruptcy. It’s likely the Monorail Co. will go up for auction, Hill said.
“We would basically go with Monorail Co. in bankruptcy court,” Hill said. “We would propose this solution to the court. The tribunal would certainly have discretion over how it would respond to our offer. “
In an emailed statement, Monorail spokeswoman Ingrid Reisman confirmed that the company would seek the option of bankruptcy.
The elevated train, which runs a 3.9 mile route primarily adjacent to the Strip, is owned and operated by privately-held Las Vegas Monorail Co.
Conversations about LVCVA’s acquisition of the monorail were launched in January, but were accelerated in the wake of the coronavirus pandemic, which led to the monorail being shut down in March.
Normally, the train carries just under 5 million passengers per year, although this year’s drop in congress and visitor traffic has taken a toll on the operation, as have so many in Las Vegas.
The authority’s plan would be to own and operate the transportation system while the Monorail Co. was disbanded.
Goodman, an LVCVA board member who attended the meeting remotely by phone, said she was “totally opposed” to the potential deal for the monorail.
“We have $ 1.8 billion in debt, no treaty bookings, no room tax income, and we have over 335,000 unemployed, some of whom are nearly homeless,” Goodman said. “It was originally supposed to go from the airport to the Strip and then downtown. It should be a private entity and not the LVCVA in my opinion. “
In July, a spokeswoman for Monorail Co. said the nonprofit hoped to resume operations this summer, although the system remains closed.
Last fall, the company announced it had funding for a new station – it now has seven – to service the Sands Expo Center, Venetian and the under-construction MSG Sphere entertainment complex.
Hill said on Tuesday that those plans and plans for a new station in Mandalay Bay would likely be scrapped, although he also said LVCVA would be open to partnering with companies or organizations that might want to invest in money. money in the line.
The Boring Company, an Elon Musk company, is working on an underground transportation system that would take passengers to various stops along the Las Vegas Convention Center campus.
This system, which is also expected to be extended to other stops along the tourist corridor in the future, is expected to be completed early next year.
Hill said the acquisition of the monorail could be a “big transition over the next decade” as the Boring Company may be working to expand its underground passenger transportation system.
He added that without major upgrades, it is likely that the Monorail system would only have a lifespan of about another decade.
Any deal to buy the monorail would also mean the end of a non-compete agreement the company put in place that aimed to prevent outside businesses from expanding east of Las Vegas Boulevard.
“We have a different mission than someone in the private sector investing in the monorail in order to make a profit,” Hill said. “There is a real cost to this community for the congestion that exists. This system, when we are not in a pandemic, would be responsible for transporting 5 million spectators and tourists. Not running the monorail for the next eight or ten years would be bad for the city. With us owning it, it provides a transition.
Hill also said the elevated monorail station immediately west of the convention center – which has more than 11,000 square feet of office space – could be an intriguing real estate item for the LVCVA.
“This office space is not being used and, if this space didn’t have trains going through the first floor, we think we could fit an additional 30,000 square feet of office space there,” Hill said. “It has a fabulous view of the Strip and huge panoramic windows to the south and north. It’s a cool building. We believe it has real value in the future.
Replacing the actual portion of the monorail rail system, Hill said, could cost around $ 200 million, although he said it wouldn’t be something LVCVA would be interested in doing.