Bonds sold for big Vegas monorail project

Brendan Riley

Thursday, Sept. 21, 2000 | 5:19 a.m.

CARSON CITY - Most of the $650 million in bonds for a big Las Vegas monorail project have been sold and a notice to proceed with construction has been issued, a project spokesman said Thursday.

Scott Langsner added that investors in the bond issue - largest in state history - will get interest ranging from about 5.5 percent to 7.5 percent as the bonds are redeemed over periods ranging from several years to 40 years.

Langsner said investors handed over $601 million on Wednesday. Of that, about $75 million and a notice to start work promptly went to two principal contractors.

The rest of the bonds, worth about $49 million, will be purchased by resort owners along the monorail route and by the contractors on the project.

Langsner, senior vice president and secretary-treasurer of MGM Grand Inc., said initial work won't be noticeable. Mostly, it's engineering plus offsite work on support columns and train cars.

But within a year, he said crews will start putting the precast columns in place. The monorail system should be completed by early 2004.

"What we'll have in 2004 is the most well-known, efficient train system in the entire world," Langsner said.

The issuance of the tax-exempt revenue bonds was approved last month by the Nevada Board of Finance, chaired by Gov. Kenny Guinn, after the panel was told that legal challenges from lawyers for The Venetian megaresort on the Las Vegas Strip had been dropped.

The monorail will stretch from the MGM Grand north to the Sahara, with several stops near other Las Vegas Strip resorts - including the Venetian - and the Las Vegas Convention Center. A ride along the nearly four-mile route will cost $2.50.

Proponents say an estimated 19 million people will use the monorail each year, easing vehicle traffic on streets and highways and reducing pollution from car engines.

Monorail advocates also point out that the bonds wouldn't obligate any state funds or count against the state's limit on bonded indebtedness.

They also said future expansion beyond the Strip, to downtown Las Vegas and even to McCarran International Airport, would have to financed separately.

Of the $650 million in bonds, two-thirds are AAA-rated thanks a $23 million insurance policy. Investors in the balance of the bonds have been described as "smart money" types and resorts with deep reserves and the ability to handle uninsured investments.