Intersection

[Transportation] Derailed

Should we consider a future without the money-losing Las Vegas Monorail?

Aaron Thompson

It seems that the Las Vegas Monorail, the nearly four-mile mass of train track and troubled finances,­ can’t catch a break. Despite rising ridership—up 13 percent in 2007 from a puny 900,000 riders in 2006—the little rail that could is still in a world of hurt.

In January, the leaders of the $650 million project announced that they were dipping into financial reserves to fund the hemorrhaging behemoth. If this spending continues, the monorail’s reserves are expected to reach zero in two years.

But while 2010 seems far away now, and monorail officials say that the panacea to their problems is a $500 million expansion of the project to McCarran International Airport, some of us are wondering if the failure of the project is so clear that it should just be torn down and sent to the scrap yard.

Of course, according to a statement issued by the Las Vegas Monorail Company, tearing down the project would be unwise, particularly for the bondholders involved with the struggling business.

“Bondholders would unlikely want the system torn down as the payment they currently receive would stop and they would have no other source of repayment beyond the bond insurance,” the statement said.

The statement also asserted that monorail officials aren’t worried about depleting the cash reserves, as they are confident about incoming revenue.

Clark County officials, on the other hand, are more concerned that the rail line has yet to have broken even during a single month since July of 2004.

If it fails, though, wouldn’t they have to tear it down?

If the monorail were to be dismantled, more than just the company could be affected. The stretch of tracks goes through two county districts and impacts a number of streets in and around the Strip. Clark County Commission Chairman Rory Reid notes that if the project were to fail, the county’s liability would be limited. That’s because during the monorail’s inception, the Las Vegas Monorail Company was forced to write into its contract with the county a clause stating that if it fails, $6 million would be set aside to remediate and fix any damage and work to county roads.

“[The fund] is meant to protect the risk that the county took to build it,” Reid says.

“The county sought to protect itself from paying to remediate the route [the monorail operates on].”

And while Reid doesn’t feel that it’s the county’s place to call for ripping the monorail down, District E Commissioner Chris Giunchigliani has no problem advocating for a better solution to Vegas’ commuting crunch.

“The monorail is not as well-thought-out as it could have been, in my opinion,” Giunchigliani says. “If the monorail does go away, it would give us an opportunity to look at other ideas [when it comes to mass transit].”

Photo courtesy of Las Vegas Sun

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