Monday, Sept. 20, 2004 | 10:58 a.m.
Even as their multimillion-dollar investment sits idle in a Las Vegas maintenance facility, representatives from the Strip's largest casino operator said Thursday that the Las Vegas Monorail will continue to be part of the company's long-term plans.
Meanwhile an expert in Las Vegas tourism dismissed the prolonged closure as a "blip" on the city's reputation, although convention planners say they are now careful not to mention the system when talking to prospective conventioneers.
MGM Mirage, which operates the southernmost monorail platform, bought $5 million in monorail bonds to secure the MGM Grand as the site for the system's southern anchor. The bond purchase was part of a contract between the monorail company and hotels that wanted stops on their property, Todd Walker, a spokesman for the monorail, said.
The MGM Grand platform is the only station owned by the casino conglomerate, as the company's other hotels are on the opposite side of the Strip from the monorail, Yvette Monet, a spokeswoman for MGM Mirage, said.
She said the company was "disappointed" in the problems the monorail has faced since its opening but that the casino chain was still happy with its investment.
"The investment we made was our investment, and we stick to it," Monet said. "We just hope for the sake of the convenience for the tourists that the problems will be resolved."
Caesars Entertainment, parent company of the Flamingo and Bally's hotels, each of which boasts a monorail platform on its property, invested $15 million for three stations. The third station, at the Las Vegas Hilton, was sold with the hotel to Resorts International in June.
The monorail also stops at the Sahara and at a platform shared by the Imperial Palace and Harrah's, which also invested.
A seventh, located near the Las Vegas Convention Center, was sponsored by Nextel Communications.
A spokesman for Caesars declined comment.
Ira David Sternberg, a spokesman for the Las Vegas Hilton, said the design of the monorail platform at that hotel has kept the closure from costing the Hilton in lost business. Platform designers planned the station so that it would lead passengers down a staircase into a casino near the front door.
"It's almost like a stand-alone that feeds into the casino," he said.
Ed Crispell, general manager of the Imperial Palace, and a representative for the Sahara hotel which owns the northernmost platform, did not return phone calls from the Sun. A Harrah's spokesman declined to comment.
The Imperial Palace and Harrah's split the $5 million cost of that station evenly, paying $2.5 million each, Walker said. Sahara fronted its $5 million share.
The investment that hotels provided for their stops did not include the cost of renovations made by the casino companies to integrate the platforms into their properties. The MGM Grand, for example, accelerated existing plans to renovate its Studio Walk corridor and opened a string of high-end restaurants near the monorail platform, Monet said.
It is still too early to tell if the company has seen a short-term drop in foot traffic at the MGM Grand, she said.
"It's obvious from the monorail crowds that it was indeed drawing business to the property," Monet said. "But the system hasn't been operable long enough to create a standard baseline to determine how it contributes to business levels."
The $650 million system was privately funded with state tax-free bonds. State officials required a $23 million insurance policy to shield the state and bondholders from any financial fallout that could result from a prolonged closure.
The system, which opened July 15, more than six months late, has been shut down since Sept. 8, when a 2-pound washer used to secure a train's drive shaft fell off.
The most recent closure came barely a day after the system reopened following a six-day closure prompted by a 60-pound wheel assembly falling off a moving train on Sept. 1.
Monorail officials have not publicly said when they expect the system to reopen, but have said it could take several weeks as engineers inspect and retest the trains.
Convention planners had used the monorail as a selling point, pitching the system as a way to ease demand for hotel rooms near the Las Vegas Convention Center, Debbie Baker, an account executive for TWI Extras, a local convention and meeting planning company, said.
"When the monorail opened I thought, 'Here's the answer,"' she said. "We told our clients, 'It's OK if you stay at the MGM or if you stay at Harrah's.' Now we're up against a situation where that might not be the case."
It costs about $20 to take a cab from those southern Strip properties to the convention center. A one-way trip on the monorail costs $3. A three-day monorail pass for unlimited trips is $25.
Now, with several high-profile gatherings heading to the convention center this fall, Baker and other planners are arranging shuttle buses to carry conventioneers to and from their hotels, a relatively expensive alternative compared to a monorail ticket, she said.
"We have to cover ourselves when we talk to them," Baker said. "It was nice to be able to ensure them they would be able to get around."
Tammy Pennington, the Dallas-based director of events for NurseWeek, a trade magazine for nurses, no longer mentions the monorail to attendees of future conferences, she said.
The group will be coming to Las Vegas in October, but Pennington said she is reluctant to tell convention-goers about the monorail until it is reopened. Like others, she said she had "high hopes" for the system's convenience but that it has not affected her future plans.
"The monorail has been a disappointment to my group plans, but only a minor one," Pennington said. "Last year the buzz and anticipation was high as the hotels touted the monorail as an added incentive to book their space."
Terry Jicinsky, senior vice president of marketing for the Las Vegas Convention and Visitors Authority, said complaints like Baker's and Pennington's will be short-lived, as the organization "fully expects" the monorail to reopen soon.
Patti Shock, chairwoman of the tourism and convention department at the University of Nevada, Las Vegas, and a nationally recognized expert on local tourism, called the closure a "blip" on the city's reputation as a top draw for large-scale conventions.
In this case, the fact that the breakdowns happened so quickly after it opened may work to the system's benefit, she said, as few people had come to expect the system to carry them back and forth.
"It wasn't open long enough for any habits to form that people have to break," Shock said. "Even if we lost a convention or two because of the monorail, there's a whole lot of other meetings that would love to come here."
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