Thursday, January 27, 2005
Copyright © Las Vegas Review-Journal

Funding denial puts monorail extension in doubt

The Monster Energy monorail train sits at the Bally's/Paris station after it lost a part in September. Federal authorities have told local transit officials that they won't help fund a proposed downtown extension. Photo by John Gurzinski. Click image for enlargement.

Another part appears to have dropped from the troubled Las Vegas Monorail: the rail line's proposed downtown extension.

Federal authorities have told local transit officials that they won't help fund a downtown leg now, if ever, putting the 2.3-mile extension's fate in serious doubt.

"Hopefully, someday the monorail will come downtown," Mayor Oscar Goodman said Wednesday. "Unfortunately, because of the breaks they've had in the beginning, they haven't been able to demonstrate reliability to justify funding."

Regional Transportation Commission officials were counting on more than $321 million in federal grants and loans to cover the cost of the $450 million extension.

"In the president's '06 (fiscal year) budget, we do not have funds," said Ingrid Reisman, a Transportation Commission spokeswoman. "Does that mean there's absolutely no project? Not necessarily."

Monorail officials say they'll leave it up to the commission to decide whether they want to later revive the downtown leg, which would have run northward from the existing monorail's Sahara station to Main Street and then to Fremont Street.

"Nothing is finalized until it's finalized," said Todd Walker, a monorail spokesman. "You can't rule anything in and anything out."

Walker said the downtown plan was never key to the monorail's future. It was being done, he said, at the behest of commission members.

"Our focus is and always has been on the successful operation of the phase that's been built privately and is in operation today," Walker said. "We'll continue to work with the RTC on any future expansion, whenever that may occur."

Commission officials were informally told of the funding rejection in recent days by the Federal Transit Administration. A formal written denial, along with reasons for the denial, is expected sometime next month.

Officials said it appears that the rejection was spurred by the existing monorail's inability to prove its financial viability.

The monorail's original 4-mile line, located behind the east side of the Strip, was closed for most of last year due to mechanical problems.

On three occasions in 2004, moving trains shed metal parts onto the ground below. No one was hurt by the falling parts, but each resulted in lengthy system shutdowns, the last of which -- a 107-day closure -- ended Dec. 24.

That kept monorail backers from proving the line could draw the projected daily ridership of around 50,000 passengers. And strong ridership is needed to repay most of the privately funded segment's $650 million construction costs.

That segment was completed using private grants and more than $400 million in bonds, the latter of which are to be repaid mostly from farebox revenue.

"Before there could be any expansion of the system, it would certainly be expected that there needs to be sustained operations over a period of time," Walker said.

The original line's problems also postponed work on the extension, which was scheduled to begin in late 2004 in hopes of opening the new leg in 2008.

For the downtown extension, farebox revenue was slated to repay a $143 million taxpayer-backed loan to be used for construction, along with a $178 million federal grant.

"What we need to focus on right now are addressing the concerns of the federal government, and that the current monorail is working on making itself financially feasible," Reisman said.

The Transportation Commission has already received -- and mostly spent -- a $22 million federal grant earmarked for preparatory work on the extension.

Reisman said there are still several options for a downtown extension.

The commission could reapply for federal dollars later this year as part of an annual aid request. Officials could also begin working on other ways to link the existing monorail line to downtown using other means, such as express buses or light rail. Another option is to walk away from an extension altogether.

"All those options are possibilities," Reisman said.

If officials reapply for federal funding, a decision may not come before early 2006, and money may not be in hand until later that year at the earliest.

One option that is highly unlikely is finding immediate replacement dollars for the federal funds from private sources. Various financial rating firms put the bonds used to fund the existing monorail on watch status due to the system's failings, making more bonds a tough sell.

The prospects of scrounging up other federal dollars in Washington appears equally iffy.

Federal transit officials could not be reached for comment Wednesday afternoon.

Officials with the offices of U.S. Sen. Harry Reid, D-Nev. and U.S. Rep. Shelley Berkley, D-Las Vegas, who had been helping shepherd federal aid to the monorail, did not immediately return calls seeking comment.

The monorail extension had been touted by city officials as a potential shot in the arm for their downtown redevelopment efforts.

Goodman said he may prefer an express bus link as a replacement. "It gives us much more malleability than a monorail," he said.

But the mayor doesn't see the monorail extension as forever dead.

"I see it happening in the not-too-distant future. It's a natural. It definitely should take place sometime, but they have to prove themselves," Goodman said. "I wish the monorail well. In the meantime, we'll go another route."

Staff writer J. M. Kalil contributed to this report.