The Las Vegas Monorail is sort of the Edsel of the local public transit scene.
The 3.9 mile system first opened in 2004 along the east side of the Strip amid heady ridership promises that — surprise! — never materialized. In early 2010, the nonprofit Las Vegas Monorail Co. filed for federal bankruptcy protection when revenues weren’t enough to make payments on the $650 million in loans used to build the project.
The company emerged from bankruptcy two years later with just $13 million in debt, but the number of passengers who use the system remains well below expectations and the monorail’s long-term viability remains uncertain.
Despite the monorail’s struggles, the nonprofit company now seeks to embark upon a mile-long expansion south from the MGM to the Mandalay Bay. The original plan was to pay for design work on the proposal by tapping a “doomsday” account set up to the cover costs of dismantling the system, and then to seek private financing for the $100 million expansion.
On Tuesday, however, monorail officials were in front of the County Commission flashing their “will work for food” signs. Without a taxpayer line of credit to the tune of $4.5 million a year for three decades, the expansion is dead, monorail CEO Curtis Myles told the commissioners.
In other words, monorail officials either can’t find any private investors willing to risk funding the project without taxpayer involvement, or they face the prospect of floating high-interest bonds that would jeopardize the expansion’s financial feasibility.
This isn’t surprising, given the monorail company previously stiffed bond holders of hundreds of millions of dollars.
All this raises the $64,000 question: If the private market smells a stinker, why the heck would county commissioners put taxpayers on the hook for this potential boondoggle?
Thankfully, it doesn’t appear they will. “I’ve never seen such creative financing,” said Commissioner Marilyn Kirkpatrick. Her colleague Chris Giunchigliani was more direct. “In my mind, it just doesn’t make sense,” she said.
Mr. Myles pleas to commissioners didn’t help. “We’re at a point,” he said, “where we need to know if we’re going to be able finance this project before we continue to spend money on it.” What’s that old saying about the cart and the horse?
The proper course, here, is clear. County taxpayers don’t need this headache. If monorail management can’t secure private capital to start the project, then the commissioners should retreat to the sidelines.
There’s always Kickstarter.