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Monday, Feb. 22, 2010 | 2 a.m.
Sun Archives
- Las Vegas Monorail could seek partnership with Chinese (2-17-2010)
- Monorail spending expected to be scrutinized at bankruptcy hearing (2-17-2010)
- Las Vegas Monorail bonds downgraded after bankruptcy filing (2-5-2010)
- Las Vegas Monorail argues against bankruptcy as municipality (2-3-2010)
- After all the promises, will taxpayers be stuck with the monorail’s bills? (1-22-2010)
- Judge sets hearing date in Las Vegas Monorail bankruptcy case (1-19-2010)
- Las Vegas Monorail files for bankruptcy protection (1-13-2010)
Related Document
Beyond the Sun
In the Red
Since it began carrying riders in 2004 on a 7.8-mile roundtrip route from the MGM Grand to the Sahara and back, the Las Vegas Monorail has fallen far short of projections, despite boasting more than 40 million passengers to date. The monorail has blamed its shortfall on the cratered economy and the drop in tourism.
Although it has been able to pay for daily operations through fares and advertising revenue, it hasn’t come close to retiring its debt. The company says that if it can restructure that debt, it will be able to expand to McCarran International Airport.
Even as the Las Vegas Monorail goes through bankruptcy proceedings, its proponents are touting possible futures for it.
Their hopes are tied to the Regional Transportation Commission and extending the monorail to McCarran International Airport.
One scenario would involve financial backing from China. Another is to get Federal Transit Administration funding, but that would require sponsorship by a government agency in Nevada. And a third, one that has long been speculated to be the monorail company’s ultimate bailout plan — Partnering with the valley’s public bus system.
Whether the monorail might have any future at all, however, hinges on an upcoming ruling on Chapter 11 protection by U.S. Bankruptcy Judge Bruce Markell.
The monorail would have to be able to reorganize its massive debt before it could move forward.
If that happens, monorail board member and former Clark County Commissioner Bruce Woodbury says, “We then think it makes sense to improve and expand the system. Most people I’ve talked to say the monorail is a good thing, but that it needs to go to the airport. In order to attract any funding for that, we would have to get the debt restructured.”
Woodbury, also a former chairman of the Regional Transportation Commission and one of the state’s leading authorities on transportation, says he has had informal discussions with the RTC about merging the monorail with its mass-transit bus system. The monorail would still be owned and operated by the nonprofit company, but it would integrate with RTC transit systems in the resort corridor.
Woodbury said monorail President and CEO Curtis Myles, who used to be RTC assistant general manager, speaks regularly with RTC General Manager Jacob Snow. (Ingrid Reisman, monorail vice president of corporate communications, is a former RTC employee.)
Myles, however, is floating a couple of strategies for a post-bankruptcy monorail. He is looking at applying for Federal Transit Administration money and has also been pursuing a possible partnership with Chinese investors and government agencies.
To apply for the federal funding, Myles said the monorail likely would have to be sponsored by a government agency in Nevada. Woodbury says the most likely partner would be the RTC.
“We’d have to find a way to integrate the monorail with the mass transit system that could involve the sharing of stations,” Woodbury says. “But the RTC won’t sponsor the monorail for federal funding unless the monorail can be integrated with the mass transit system.”
Woodbury said neither the RTC nor Clark County is interested in acquiring the monorail outright should it fail to restructure its estimated $500 million to $1 billion in debt from construction bonds that are in default. Woodbury says the board does not consider the sale of the monorail an option.
“We’re not looking for any investors to take over the monorail,” he says. “We’re looking to continue as a nonprofit entity.”
Myles took a five-day trip to Beijing in June with representatives of the proposed DesertXpress high-speed train that would link Las Vegas with Southern California. He says he met with potential investors and senior Chinese government officials who work for a state-owned bank and railway company.
“There are still doors open with these individuals,” Myles says. “My understanding is that they are performing their due diligence. The idea is that there would be a seamless system connecting the existing monorail with the airport.
“The Chinese are looking to franchise their rail system expertise around the world.”
Woodbury says he would welcome Chinese involvement only if those officials wish to invest in new bonds to extend the four-mile monorail to the airport — not as owners of the system.
And he concedes that the monorail would undergo tougher scrutiny to issue such bonds, given that the transit operator defaulted on its current $649 million in industrial development bonds. The default has been attributed to overestimated ridership projections made when the bonds were issued in 2000.
“For any new bonds, we would need multiple sources of independent analysis of future ridership,” Woodbury said. “Extending to the airport could help ridership on the existing portion of the system, but any new bonds would be scrutinized carefully by potential investors.”
Whether an airport extension would turn the monorail into a financial winner remains in doubt, however.
Las Vegas firm Applied Analysis concluded last year that “it is unclear if such an expansion will be self-supporting.”
That study has been cited by the monorail’s major creditor, Ambac Assurance Corp. of Wisconsin, as an example of why the transit operator should be treated for bankruptcy purposes as a government entity under Chapter 9 rather than a private nonprofit corporation under Chapter 11. The study of the monorail system was commissioned by the Nevada Business and Industry Department, the agency that issued the $649 million in bonds.
Ambac, which has insured more than $450 million of the bonds, has argued that the monorail is ineligible for Chapter 11 because it was labeled by the state as an “instrumentality of the state” for tax purposes when the tax-exempt bonds were issued. The monorail disagrees that it is controlled by the state, arguing it must maintain a business license and a franchise agreement with Clark County and that it has no taxing authority.
Legal experts have told the Sun that creditors such as Ambac would have more control over the potential sale of assets under Chapter 9 than under Chapter 11.
High Pay
According to the monorail’s filing with the Internal Revenue Service for 2008, the company’s top salaries that year went to President and CEO Curtis Myles III, $346,477; Vice President of Corporate Communications Ingrid Reisman, $146,400; Security Director Joseph Dorsey, $135,926; Operations Director Timothy McFadden, $114,341; Chief Financial Officer Ross Johnson, $85,212; and General Counsel Michael Niarchos, $45,000.
In 2008 the monorail also paid board directors Terry Murphy (a public policy consultant and former administrative services director for Clark County), Pat Shalmy (former Clark County manager who has served as president of Nevada Power and the Las Vegas Chamber of Commerce) and attorney Alex Hossack $55,000 each. Board director Bill Bible, president of the Nevada Resort Association, was paid $45,000, and board director Robert Faiss, a gaming attorney, was paid $35,000. Each board member was listed as having averaged only one hour of work per week. Of those, only Shalmy remains on the board.
High-Profile Affiliations
Robert Broadbent, after whom the monorail was formally named, spearheaded its development. He is a former Clark County commissioner and aviation director, and served in the Reagan administration as Interior assistant secretary for water and science.
Former monorail executives include former Henderson Mayor James Gibson and Cam Walker, Broadbent’s son-in-law, who is now a member of the Boulder City Council.
Former board members include John Haycock, who has served as president and CEO of Haycock Petroleum and president of the Western Petroleum Marketers Association.
Current board members are Shalmy, former County Commissioner Bruce Woodbury, former state Sen. Bob Beers and former gaming executives Mike Sloan and Anthony Santo.
Excuse me, but didn't the Venetian and Wynn say they wanted to have nothing to do with this fiasco? Ever tried to walk from the monorail to either of them? Now you'll be dragging a couple of suitcases from the airport with your bride? Plus what if your hotel, say Bellagio or Caesars is on the other side of the street? Dragging your luggage across the boulevard? I guess they could set up a luggage delivery service at the airport, but why bother?
Just jump in a cab, hold your nose with the smelly driver, and get to your hotel in 15-20 minutes. Not cheap, but hey-you're in Vegas for the weekend, you're going to spend a bundle, and the cab fare is incidental.
Monorail? A complete waste of money. Curtis, you and your overpaid liars know the end is near...
Face it. The system was poorly designed from the beginning. I would love to see a light rail transit system in Vegas succeed, but the reality is that this project should have never broken ground. I'm sorry to say...stop throwing good money after bad and shut it down.
Shutting down something that has cost so much and is already in place makes NO SENSE at all! It must be modified, and yes of course it MUST go to the airport. Tying in the service with the bus transit is good, but better yet a light rail system is better. What are they gonna do? shut it down and tear down everything that has been built already? that's not the way things get done here in America. We are problem solvers, and if we can put men on the moon, this project is gravy...
Just redesign the monorail so that all it does is go to and from the mob museum. Everyone will be a winner, and all financial problems will be solved!
Exit baggage claim get in cab at your hotel in 15 minutes $20. Or exit baggage claim walk to station wait for train exit train with long walk to check in $10 no way would I get to my hotel that way.
Any monorail system would have to go from the airport to the new unneeded city hall in Las Vegas. Ask Oscar; it won't cost anything.
"Whether an airport extension would turn the monorail into a financial winner remains in doubt, however.
Las Vegas firm Applied Analysis concluded last year that "it is unclear if such an expansion will be self-supporting."
I agree with that analysis.
It is doubtfut that the ridership added by the airport extenstion will pay for itself...meaning pay for the addition capital cost, interest and even perhaps operational cost.
Why would anybody want to drag their bags to the monorail, and the be dump at the back of the casino, drag their bags almost a mile to the front desk and then do the roundtrip later back.
Also, we are only talking about a select few casinos that have direct connection to the monorail.
This is a loser.
They are going to drown the public with these boondoggles.
Will they ever learn?
Extending it to the airport would be a boon for tourists!
Enough stories about the monorail. They are all the same and they all carry the same comments. Everything has been said that needs to be said. However, I will say it one more time. "Tear it down, sell it for scrap, and get on with it".
curtis is a liar. there is no record of him meeting with anyone regarding this particular subject. Why would any investor look at this project? That doesn't hold water, and neither does his outrageous salary.
Has anyone ever been on the monorail? I never have, however, I will be going to a pizza convention march 2-4th and have people staying at a property that is connected to the monorail. I will ride it then and see firsthand how it is.
"Extending it to the airport would be a boon for tourists!"
How would that be?
It only directly connects to five or so casinos.
Also, those connections are not anywhere need a check-in area at those casinos.
So tourists want to lug around all bags everywhere?
Tourists will stick to the cabs and the hotel vans.
Yeah,dragging my bag in 110 degree heat sounds like fun to me.NOT.
I came to Vegas after the monorail was built so I don't know who is responsible for the idiocy that is the monorail. Should of put it right smack dab down the middle of the strip!!!!!!!! Not only would it be transport from the airport (oh, yea... it doesn't go to the airport) it would be a tourist attraction and actually make money! Has anyone seen the lines to ride a bus in traffic down the busiest stretch of road in the whole USA? Can we say DUH?
ps.... they could have put in a motorized walkway to the LVCC (and Hilton) from the strip at the Riviera exit as it went on to downtown. (or at least the Strat)
ppss.. I'm sure someone made out like a bandit on this fiasco... I'll bet they don't live here anymore. ? Probably retired to a Mexican Beach.
I for one have always enjoyed the Monorail when ever visiting Las Vegas.
It beats the overcrowded and at times rowdy patrons on the bus service that pass by you when at capacity like a tornado passing thru the great plains. The Monorail is a peaceful smooth ride for those of us willing to walk a little bit further than 100 ft to a cab stand. Get the cars off the street...either improve the bus service significantly or revamp and improve the Monorail. The Monorail should no doubt go downtown also along with the airport. Get it done.
I actually worked on the monorail, and as it stands now, it is garbage. It's only that way, however, because the full plans of the monorail were never realized. It was supposed to be built in four stages. The first stage is what exists now. The second was to extend it to the airport. The third was to have a wraparound track that started at the hilton and circled around the other side of the strip down to Mandalay Bay. The fourth stage was to have an offshoot go down to Cashman Field. Apparently whoever planned the Monorail didn't plan for how much it would cost to actually get all that stuff done. I just laugh at how Chicago has had the El all these years, and Vegas, a place with all this money, can't build an elevated train that goes down one street. It reminds me of the Monorail episode of The Simpsons.
Just wondering why this article was published on February 22, and again on April 27. With the comments from people on Feb 22-23.
Curtis and Ingrid, you are toast, best you start saving your outrageous salaries. The monorail will soon be the quietest method of transportation in town. Because it will be closed down. Like in BK, with little hope of change. Who would ever invest in this travesty? Can't wait to see Curtis at the bus stop....