The long-planned extension of the Las Vegas Monorail to the Mandalay Bay, which sits near the Las Vegas Raiders Stadium, and construction of a new station near the Venetian, depend on a chain of events that appear increasingly unlikely to materialize.
Monorail president and CEO Curtis Myles told County Commissioners earlier this month that financiers are looking for two commitments before funding the $172 million project – one from the government for $135 million over 30 years, and the other from the resort industry for an undisclosed amount.
But are casino companies interested in ponying up funds to move tourists up and down the Strip?
“The answer to your question is no,” said Ron Reese of Las Vegas Sands, which owns the Palazzo, the Venetian, and the Sands Expo Convention Center, all expected to benefit from a new station planned for the expansion.
Boyd Gaming, which has no resorts that would directly benefit from the extension, has no intention of participating in financing, says spokesman David Strow.
The expansion would put tourists at the doorsteps of two MGM Resorts — Mandalay Bay and Luxor.
Does the gaming giant, which is slashing jobs to cut costs in response to shareholder demands, intend to help finance the extension?
“I don’t know. I’ll have to get back to you,” said MGM Resorts International spokeswoman Debra DeShong.
“There’s zero support for this in the industry,” a gaming insider with knowledge of the matter told the Current. “Even at MGM.”
The Las Vegas Convention and Visitors Center was unable to cite any financial support pledged from the tourism industry.
Myles says financiers want buy-in within the next few weeks for the project, which is to be constructed and financed in two phases — $140 million for the Mandalay Bay leg and $32 million for a new station at the Venetian and the adjacent Madison Square Garden Sphere.
“After that window closes, this particular piece of capital is no longer available,” Myles told commissioners. “If this capital is no longer available, it’s very likely that we will not do either one of the financings because this lender is also anticipating in participating in the larger financing as well.”
But county commissioners, who agreed in 2017 to commit up to $4.5 million a year in room tax revenue (with the caveat that it be reconsidered annually) may be getting cold feet, after a warning from their attorney that the deal could leave the government liable in the event of a default by Las Vegas Monorail, which filed for bankruptcy in 2010, when tourism plummeted during the Great Recession.
Are County Commissioners willing to commit public money without details of the industry’s supposed buy-in?
“We’re talking about the equivalent of a bond we could use for something else,” said Commissioner Tick Segerblom, who characterized the county’s possible contribution as additional taxpayer commitment to the Las Vegas Raiders Stadium, which is behind the Mandalay Bay. “This is part of what we’re doing to make the stadium work. I’m not sure why we are doing it and not MGM.”
Other commissioners did not respond to our request for comment.
Then-County Commissioner, Steve Sisolak, who is now governor, updated constituents on the project in a January 2018 newsletter:
“Several community stakeholders support of the project including MGM Resorts, Caesars Entertainment, Las Vegas Convention and Visitors Authority, the Regional Transportation Commission of Southern Nevada and the Las Vegas Global Economic Alliance,” Sisolak’s newsletter said.
Asked whether the support cited was financial, Sisolak’s spokeswoman, Helen Kalla, declined to answer, instead noting the item in Sisolak’s newsletter was lifted from a Las Vegas Sun story quoting Commissioner Larry Brown.
The planned 1.4 mile extension and addition of two stations are touted not only as a boon to the 6 million conventioneers who visit Las Vegas each year, but also football fans, who will be forced to travel on foot to the parking-bereft Las Vegas Stadium. The stadium is about a fifteen minute walk from the Mandalay Bay,
As for the resort industry, Myles told commissioners he’s “very confident that we’ll get the participation that’s required to secure the loan.”
LV Monorail spokeswoman Ingrid Reisman refused to say whether the industry has made any financial commitments to the project and declined to provide the most current ridership statistics. The latest figures available on the Las Vegas Monorail’s website, which says it is updated quarterly, are from 2017, and put ridership at less than 5 million that year.
Monorail revenue has consistently fallen millions of dollars a year below projections. A study by BuroHappold Engineering says the extension would increase annual ridership by at least 1.5 million people, according to the Las Vegas Monorail.
The extension would expand the monorail to eight stations along a five-mile stretch from SLS, at the corner of Sahara and Las Vegas Boulevard, to Mandalay Bay, at the south end of the Strip.