Updated September 7, 2020 - 6:58 pm
The Las Vegas Monorail Co. has filed for Chapter 11 bankruptcy, according to a statement released Monday.
President and CEO Curtis Myles said in the statement that the monorail has been unable to reopen since shutting down in March because of the COVID-19 pandemic.
“As a result, it is in the Las Vegas Monorail Company’s best interest to file for bankruptcy and effectuate a sale of the system assets to a party who intends to keep the system in operation and help ensure that the mobility benefits the Monorail provides continue during conventions, events and throughout the year,” Myles said in the statement.
The company’s board of directors authorized the filing, which is part of the company’s sales agreement with the Las Vegas Convention and Visitors Authority, according to the statement.
LVCVA President and CEO Steve Hill has said his agency’s acquisition of the monorail franchise would be beneficial to transportation along the Strip corridor because the monorail company holds a noncompete designation that would prevent future transit systems from operating.
The Boring Co., established by entrepreneur Elon Musk, is building a mile-long people-mover system beneath the Las Vegas Convention Center to transport conventioneers from one end of the Convention Center campus to the other.
The system, a twin-tunnel passageway to be used by Tesla vehicles in self-driving mode, is weeks away from testing. Tesla is another Musk company, and the proposal at the Convention Center would use vehicles on Tesla chassis, with some carrying up to 16 passengers at a time.
Boring Co. officials hope to use the people-mover as a demonstration of the technology, and they hope to build a similar operation to serve the resort corridor, Allegiant Stadium and McCarran International Airport.
Wynn Resorts Ltd. and Genting Group’s Resorts World Las Vegas already have signed on to have their own Boring Co. tunnels transporting hotel guests from their respective resorts to the Convention Center.
Clark County’s role in the deal involves the transfer of franchise rights to the LVCVA.
Among the conditions for the approval of the transfer is that the LVCVA may not pledge or spend revenue for the payment of any operating subsidy or any capital improvement that exceeds 3 percent of the LVCVA’s budgeted operating revenue for that fiscal year, not to exceed $10 million a year, without first getting commission approval.
If the LVCVA takes over the franchise agreement, it would take on the obligation of tearing the system down should it fail. If the LVCVA closes escrow on the deal, the county would transfer the money remaining in a county-held remediation fund to the LVCVA.
A Clark County spokesman said last week that there is $6.76 million in the remediation fund.
But Las Vegas Mayor Carolyn Goodman, a member of the LVCVA board of directors, suggested on July 14 that MGM Resorts International acquire the system so that it could extend it from the monorail’s southern end point at MGM Grand to Mandalay Bay, where a new station has been proposed. The new Mandalay Bay endpoint would be within walking distance of Allegiant Stadium.
“This isn’t the time to be spending money,” said Goodman, noting that the LVCVA has needed to lay off or furlough employees during the pandemic and that state government health and safety guidelines have prohibited Las Vegas from hosting any conventions or trade shows.
She also said she has been disappointed that despite earlier plans, the monorail has never been financially successful enough to be extended to McCarran or downtown Las Vegas.