First ad-sponsored monorail car gets Vegas introduction

Kevin Rademacher

Wednesday, June 25, 2003 | 11:34 a.m.

The Las Vegas Monorail's first advertiser-sponsored train was officially unveiled to a Las Vegas audience on Tuesday amid the fanfare of showgirls and confetti cannons.

After the smoke had cleared from the pyrotechnics display at the Las Vegas Convention Center, Cam Walker, president and CEO of Transit Systems Management, parent of the Las Vegas Monorail Co., said the pressure is on the for the project to succeed.

The $650 million first leg of the privately funded project is on schedule and under budget, Walker said, adding that it must stay that way as organizers push forward with three expansion plans. Initially, the monorail will connect properties on the east side of the Strip and Paradise Road, between Tropicana and Sahara avenues, to the Las Vegas Convention Center. That phase is on schedule to begin service in the first quarter of 2004.

Efforts are also under way to extend the system downtown, to the west side of the Las Vegas Strip and to McCarran International Airport.

"We need to keep the momentum going," Walker said. "There's a lot of hurdles to jump over ... It's going to take a lot of work, and we have got to be able to show that we are going to be successful."

Walker described the public-private partnership that is financing and building the Las Vegas Monorail as a one-of-a-kind venture. The financing for the project was raised in the private sector and backed by tax-exempt bonds issued by the Nevada Department of Business and Industry. That leaves two key audiences for the Las Vegas Monorail company to keep satisfied.

Passenger fares and advertising revenue generated by selling space on the nine trains and seven stations will pay back the debt, organizers said. The car unveiled Tuesday is wrapped in advertising -- inside and out -- for Hansen Beverage Co.'s Monster Energy drink. The company is paying $1 million a year for 10 years for the advertising rights.

Walker said signing up the first advertiser was a critical first step in generating the $6.5 million in annual advertising revenue the monorail company had budgeted. Negotiations are under way with other advertisers to sponsor as many as four more trains and two stations.

"It's one of the pivotal moments for the monorail," he said. "We did not want to come back to the hotels and ask for $6.5 million in advertising revenue."

The Las Vegas Monorail Co. also has been ordered by the Legislature to present it with audits and other financial data. State lawmakers passed a bill in the recent legislative session requiring more oversight of the project. Walker said he had no problems with the request, adding that the company is already submitting such reports to Gov. Kenny Guinn.

"The governor approves our budget each year and an annual audit is submitted to the governor," Walker said. "We will submit it to the Legislature as well. ... I believe the Legislature just wants to know what the governor is doing. We are happy to comply."

Walker is not the only one banking on the Las Vegas train's success. Francois Badeau, chairman of the TransMax Group, brought the monorail concept to Las Vegas. He is working to establish similar projects in other markets, and both the technology of the system and the public-private partnership concept will be key factors in future deals.

"We want to use Las Vegas as a benchmark," he said. "Vegas will set the precedent. ... It's important to show how much can be accomplished when the private sector is involved. Without their involvement in Las Vegas, we would not be opening before 2020."