Monorail party turns into PR push

Adrienne Packer

Thursday, June 15, 2000 | 11:07 a.m.

What was billed as the 5th anniversary celebration of the MGM Grand-Bally's monorail Wednesday turned into one last push to gain public support for a half-billion dollar extension of the system.

The gathering was held as Nevada's Department of Business and Industry Director Sydney Wickliffe mulls over whether the extension is worthy of issuing $650 million in tax-free state bonds.

The bonds would be paid off over 35 years using revenue generated from fares and advertising on nine four-car trains.

With the monorail humming in and out of the MGM Grand station Wednesday, its creators said little about the 1-mile system other than 25 million riders have hopped aboard since it opened five years ago.

"It's been wildly successful," Scott Langsner, senior vice president of the MGM Grand Inc., told those in attendance. "We're proud of it."

The focus of discussion swiftly turned from what Langsner referred to as the existing "1957 Chevy" monorail model to what the MGM Grand-Bally's team hopes to have running in Las Vegas in four years -- "a 2001 Porsche turbo Carrera."

Langsner reviewed the benefits of extending the system to 3.9 miles, ultimately linking the MGM Grand to the Sahara hotel-casino on the north end of the Las Vegas Strip.

He said if Las Vegas is ever going to be placed in the same category as New York City, London or San Francisco, it needs a public rail system. And, he said, the Las Vegas Strip monorail is the foundation for a more expansive system.

"For Las Vegas, this has to be 'oh my gosh' exciting,' " Langsner said. "It will be as popular as the bright lights of Las Vegas itself."

Last Thursday, proponents and opponents of the project and bond-issue spent eight hours explaining their positions. The Business and Industry division expected to release its findings by Monday.

The Clark County Commission is scheduled to review Business and Industry Department Director Wickliffe's findings July 5. The state Board of Finance should make the final ruling by August, when the bonds are expected to be sold.

The monorail team, led by consultants Bob Broadbent and Cam Walker, confirmed Wednesday that since last week's meeting Wickliffe has asked for additional information pertaining to their "perception of zero fare" plan.

Hotels with monorail stops would buy tickets in bulk and include them in convention packets or visitors' room rates to give the perception there is no fare under the plan.

But opponents argued that to meet ridership projections of nearly 20 million passengers a year, the hotels should sign paperwork guaranteeing they will buy a certain amount of tickets.

In a letter written Monday to Wickliffe, the monorail team reiterated that URS Greiner Woodward Clyde, which conducted the ridership study and reviewed the fare plan, is one of the most highly qualified firms in the world.

Also included in the package to the state was a letter from URS Greiner responding to the opposition's claims.

"URS has stated that monorail usage will be significantly increased if many potential users 'perceive' that their monorail rides are either free or prepaid," the URS report says. "URS has also noted that if this ticket availability and advance information were not provided, a continuing loss of revenue in the range of 10 to 15 percent per year could occur."

In the meantime, Broadbent's group is working to secure easements and rights-of-way from properties along the proposed route.

Despite the Venetian's position that the monorail passes over its property when it heads north on the Strip to Sands Avenue, Walker said the track is at the 20-feet level, which is above the Venetian's boundary.

Venetian attorneys wrote a letter to Wickliffe on Tuesday urging her not to release her findings until the monorail group has its easement agreements in place. If she decides to move forward, they recommended 17 conditions to be placed on the project before bonds are issued.

Most of the conditions are related to agreements. The Venetian suggested that agreements be signed proving that hotels and convention organizers will pre-pay for tickets or integrate fare collecting into their billing program.

They also said that before financing, Wickliffe should have written advertising agreements, naming rights for the monorail, guarantees on the first and second tier bonds and an advanced ruling from the IRS on the tax-exempt status of the bonds.

"We believe that imposing these conditions will help to protect the state from the adverse consequences of a bond default," the letter written by attorney Lance Earl said.