Las Vegas Monorail Co. President and CEO Curtis Myles gave Clark County commissioners an ultimatum Tuesday regarding a proposed route extension.
Myles said his nonprofit cannot get financing for the 1.14-mile extension from MGM Grand to Mandalay Bay unless the county commits to giving the monorail company as much as $4.5 million a year for the next 30 years.
“We’re at a point where we need to know if we’re going to be able to finance this project before we continue to spend money on it,” he told commissioners.
The money would not be used for construction, Myles said. Rather, it would be available for monorail maintenance and act as a credit enhancement so the company can secure low-interest bonds for the expansion.
“The project is only possible if we have the county commitment,” Myles said.
County commissioners did not seem especially moved.
“Essentially I feel like the $4.5 million is a line of credit that we’re holding out there for 30 years in case that you need it,” Commissioner Marilyn Kirkpatrick said. “I’ve never seen such creative financing.”
The money would come from hotel room tax revenues typically reserved for special projects on the Strip. Commissioner Chris Giunchigliani said she did not approve.
“I’m not going to go on to a revolving fund or line of credit or whatever this is going to be called. In my mind it just doesn’t make sense,” she said.
Myles did not disclose how much money the monorail company has spent on the extension project. The monorail company did not immediately provide the number when asked by the Review-Journal on Tuesday, and Commission Chairman Steve Sisolak said that information had not been given to the commission.
Commissioners also expressed concern whether the monorail company’s fare revenue will be sufficient to pay its debt and costs for construction and operation.
The company is waiting to complete a ridership study containing revenue projections, and although it has not put a price tag on the extension project, a $100 million estimate has been suggested.
“How do you make a commitment going forward without all the details?” Kirkpatrick asked after the meeting.
Ridership has been a problem for the monorail.
In January 2010, the monorail company filed for bankruptcy protection after revenue was not enough to pay back $650 million in loans to build the existing 3.9-mile transportation system. The company exited bankruptcy proceedings in 2012.
The route of the proposed extension has stalled the project and remains in question.
The initial proposal for construction was on a path that could damage or block a water pipeline vital to the Strip, so commissioners sent the plan back to the drawing board.
Myles said the route was redrawn and approved by the Southern Nevada Water Authority. McCarran International Airport must now OK the revision because the new route would take the monorail into the parking lot of companies renting airport land along the south side of Reno Avenue.
Airport spokesman Chris Jones said his department will meet with the monorail company Wednesday to discuss the proposed route.
“It’s too soon to say what our assessment will reveal,” Jones wrote in an email to the Review-Journal. “The information shared so far was very general, really conceptual in nature, and didn’t provide a level of detail that we’ll need to really examine the feasibility.”
Commission Chairman Steve Sisolak said at the end of the discussion that the monorail extension is moving in the wrong direction.
“I don’t want the implication that you’ve got my support to move forward, because right now you don’t,” he said. “There’s a lot of unanswered questions.”
Contact Michael Scott Davidson at firstname.lastname@example.org or 702-477-3861. Follow @davidsonlvrj on Twitter.