County grants final OK for Strip monorail

Adrienne Packer

Wednesday, Aug. 9, 2000 | 11:13 a.m.

Ending three years of discussions and debates over a proposed multimillion-dollar monorail project along the Las Vegas Strip, Clark County commissioners granted their final approval Tuesday.

Whether the existing monorail between the MGM Grand and Bally's is extended north to the Sahara hotel-casino is now up to the state Board of Finance, which is scheduled to consider the issue Aug. 18.

The board, which includes Gov. Kenny Guinn, will determine whether the state will issue MGM Grand-Bally's Monorail LLC $650 million in tax-free bonds to build the system.

"We felt if we did a good job today, we would get it approved," Bob Broadbent, the lead consultant on the project, said after Tuesday's special county commission meeting. "We feel really good about it."

During the four-hour hearing, commissioners explored potential risks to the county, listened to assurances the system would not cost taxpayers money and even engaged in a debate with opponents of the monorail.

If there was a chance Broadbent and his crew of dark-suited executives might be denied by the commission, news that Amback Assurance Corporation agreed to insure the first tier of the bonds -- about $450 million's worth -- erased most concerns.

While the insurance satisfied the board, it didn't comfort attorney's with the Venetian hotel-casino, the primary opponents of the project who say there are still many unanswered questions.

The attorney's asked why the monorail group hadn't fulfilled all the conditions required in its county franchise agreement.

Members of the monorail team for months have been telling opponents and county commissioners that all its reports will be in the final form by the time the board met to make its final decision. Only draft reports have been submitted.

"They kept promising these things would be resolved before final approval," Venetian attorney David Friedman said. "They kept saying we'll get to it later. Well today is later."

Rather than producing the final forms, Broadbent submitted "letters of reliance" from the state's bond counsel, the state's financial advisor, ridership prognosticators URS Greiner Woodward Clyde, engineers and Promethean Corporation, which conducted advertising studies.

The letters, according to county franchise manager Jim Spinello, assure the county that each agency stands behind their reports.

Friedman also wondered why the monorail group had yet to secure three vital easements from the Sahara, Harrah's/Imperial Palace and Nevada Power, a question that triggered a testy response from commission chairman Bruce Woodbury.

Woodbury, a friend of Broadbent's, reminded Friedman the board allowed the Venetian to move forward although not all the proper studies and paperwork had been completed.

"That's the real world; that's how it works and that's how we do these things," Woodbury said. "If they don't meet the conditions ... not only will they not open, but they won't be able to sell the bonds and they won't be able to turn over a shovel of dirt."

Friedman argued that the difference between the Venetian and the monorail is the latter will use state bonds. Woodbury cut off the discussion, saying he would remember the debate the next time Friedman comes before the board.

Though two lawsuits related to the monorail are active, Broadbent dismissed both of them on Tuesday with a shrug.

Paula and Joseph Quagliana, residents of the Desert Inn Estates, filed a suit last year claiming their property will be destroyed by the monorail.

On Friday the Venetian filed a lawsuit against the county claiming they transferred the monorail franchise to a nonprofit organization without all the proper paperwork being completed.

"We don't think (the lawsuits) are the type that will stop this project," Broadbent said. "They may just cost us a little bit of money if they win."

But it's doubtful the two lawsuits will be the end of the legal battles.

Friedman questioned how the county could issue a monorail master business license for the nonprofit organization -- called the Las Vegas Monorail Company -- when a management company has yet to be created or even identified.

Critics believe the management company -- a separate entity with different duties than the nonprofit -- will include Broadbent and partner Cam Walker.

"We need to know who the management company is; we need to know whether they will have the wherewithall to manage a $650 million monorail that is going to go right smack through the center of the county," Friedman said.

If the project fails within its first 11 years, Broadbent said the companies involved will pay the cost to tear the system down and remove it. But critics argued that taxpayers aren't free of responsibility.

Tort liability suits have succeeded in the past. Tort suits are filed by shareholders against not only the company backing the project, but the government entity that authorizes the bond issue for not studying the feasibility of the project with due diligence.

While commissioners Woodbury, Dario Herrera, Mary Kincaid and Erin Kenny each approved of the insurance status and licensing of the monorail, Lance Malone abstained, saying he supports the project but does not feel all the conditions placed on the project have been satisfied.