The Las Vegas Convention and Visitors Authority Tuesday signed off on the purchase of the financially troubled Las Vegas Monorail that has been shuttered since March with the onset of the coronavirus pandemic.
The approval follows action on Tuesday morning of the Clark County Commission okaying a transfer of monorail’s franchise rights. The deal is for $24.2 million, according to LVCVA CEO and President Steve Hill.
“The Monorail is in a position that it needs to file for bankruptcy,” Hill said. “This process will be part of a bankruptcy proceeding. It will end with an auction. … This is a meaningful amount of money but for the LVCVA it is not a material amount.”
Hill said the monorail is in a bad position today because of COVID-19. It had been able to generate about $2.5 million a year in cash previously before maintenance and debt payments. As Las Vegas recovers, Hill said the LVCVA will be able to do that as well. It will be able to operate the monorail more efficiently and generate more cash, he said.
The monorail’s heaviest use has been transporting visitors attending conventions during midweek. It handles five million passengers a year and about one-third of convention attendees ride it, Hill told the LVCVA board.
“Putting those five million people on the streets when the city is back to full health would exacerbate a congestion problem that we have all been working to overcome for several decades,” Hill said. “Our customers have reached out to us and made it very clear the monorail is an important aspect of their experience while they’re here in Vegas. They very much made it clear they want that transportation option to continue.”
The LVCVA would decommission the system if it ceases operation, Hill said. It’s lifespan is eight to 10 more years, he said. The LVCVA won’t be investing hundreds of millions of dollars in its preservation or expansion, he said.
“If we are not in a position to search for alternatives to the monorail within that eight to 10 year period we could go several years without the monorail or a competing option,” Hill said. “Overseeing this transition is an important part of what we can do for Las Vegas.