County expected to OK monorail reports

Adrienne Packer

Monday, Aug. 7, 2000 | 11:14 a.m.

The MGM Grand-Bally's Monorail LLC will make the second of three stops in front of government panels Tuesday as it continues to pursue a $650 million tax-free state bond to extend its existing system.

During a special 2 p.m. meeting, Clark County commissioners are expected to approve a financial report submitted by Deloitte & Touche and findings released July 17 by the state Department of Business and Industry.

If the board supports both elements and conditions it placed on the monorail franchise agreement, the bond request will go before the state Board of Finance for final approval.

Opponents of the project have already expressed serious doubts that the monorail company has met the conditions in the franchise agreement.

Attorney Lance Earl, who represents the Venetian hotel-casino, said the monorail group has yet to secure easements from hotels and most of its reports are in a draft form.

"Most of the documents are either missing or are in draft form," Earl said. "But the county is proposing 'we hereby find all conditions have been met subject to the condition that they be met.' Somehow the word 'rubberstamp' comes to mind."

Cam Walker and Bob Broadbent, the lead consultants on the project, could not be reached for comment this morning.

County Franchise Manager Jim Spinello agreed that many reports are in draft form, but he said that is normal in the bond process.

"We had the very same questions, but our bond counsel said this is all fairly normal; the final reports don't happen until the bonds are ready to go to market," Spinello said.

The county is requiring letters saying that the reports are accurate and may be relied upon by the local government. Before approving the financing, commissioners on Tuesday will review the tax status of the bonds to ensure they are indeed exempt from federal income taxation.

Questions related to the bonds were raised in May when a law firm released a legal opinion suggesting the monorail project is a private endeavor and therefore not eligible for tax-free bonds.

The report, funded by the Venetian hotel-casino and written by the Washington, D.C.-based Patton Boggs LLP, claims the bond issue would ultimately benefit the private sector because the monorail mostly caters to hotels.

Commissioners also will look at the revenue structure of the extended system. The monorail group plans to pay off the bonds with the fares collected -- $2.50 one way and $5 roundtrip -- and advertising.

Finally the board will seek assurance that its taxpayers will not be held responsible should the system fail, according to a county report.

Opponents of the project, which include Venetian hotel officials and a handful of transportation consultants from across the country, will question on Tuesday whether all the necessary documents are in place.

They also will question ridership numbers that URS Greiner Woodward Clyde provided. Florida has experienced problems with major transportation projects because of inflated ridership projections.

Florida officials who oversaw those projects might be flown to Nevada to tell the state Board of Finance their problems. That will be the monorail opponents' last major effort to derail the system.

If the monorail group succeeds, the existing system between the MGM Grand and Bally's will extend north to Harrah's, Imperial Palace, the Las Vegas Convention Center, the Las Vegas Hilton and the Sahara hotel-casino.