Don’t stick taxpayers with money-losing monorail
The Las Vegas Convention and Visitors Authority is considering a new way to waste taxpayer dollars. Its leadership is in talks to acquire and run the Las Vegas Monorail.
The only thing the monorail has done well is sell inflated ridership estimates to gullible investors. Twenty years ago, monorail officials told Nevada that it would annually carry 20 million passengers, each paying a $2.50 fare. It cost
$650 million to build the monorail and get the trains running. Fortunately, private investors, not taxpayers, provided that funding.
The monorail started running in 2004 and immediately failed to meet expectations. In five years, it carried 27 million passengers. In 2009, it had 6 million passengers.
The next year it filed for bankruptcy. That resulted in its bondholders losing 98 cents on the dollar.
Continuous failure hasn’t kept monorail officials from trying to expand its 3.9 miles of track. For years, they’ve been looking for financing to build to Mandalay Bay and add a stop at MSG Sphere. They tried to get the Clark County Commission to back up their financing plans with room tax revenue. In 2019, they tried their luck in Carson City. Fortunately, Gov. Steve Sisolak shut down those plans.
In 2019, the Review-journal obtained a study showing that ridership had declined yearly since 2016. With the monorail currently closed because of the coronavirus crisis, that trend is likely to continue. Just as telling was the revenue forecast.
The Monorail Company, which runs the train, collected almost
$8.7 million less than projected in a 2016 ridership study.
Not to worry. That study projected that ridership would grow, increasing by more than 14 percent by 2025. Cue the laugh track.
As the monorail — and its investors — learned the hard way, you can’t pay bills with projections.
Which leads us back to the LVCVA, which certainly has a history of wasting money. One could argue that burning through taxpayer dollars was the group’s business model under disgraced former CEO Rossi Ralenkotter. A Review-journal investigation uncovered that LVCVA officials spent hundreds of thousands of dollars on alcohol, showgirls, concert tickets and jewelry for employees. Ralenkotter, who raked in over $700,000 in 2018, even used company gift cards to book personal flights.
That flagrant spending was outrageous, but at least it sounded like fun at the time. What’s the upside in owning a money-losing monorail?
The LVCVA and Clark County taxpayers are going to face plenty of challenges in the aftermath of the coronavirus. Having to prop up an underperforming and money-losing transit system shouldn’t be one of them.