Rolling dice on a train to Vegas
Billions in loans a risky proposition
VICTORVILLE, CALIF. | On a dusty, rock-strewn expanse at the edge of the Mojave Desert, a company linked to Senate Majority Leader Harry Reid wants to build a bullet train that would rocket tourists from the middle of nowhere to the gambling palaces of Las Vegas.
Privately held Desertxpress is on the verge of landing a $4.9 billion loan from the Obama administration to build the 150 mph train, which could be a lifeline for a region devastated by the housing crash or a crap shoot for taxpayers weary of Washington spending.
The vast park-and-ride project hinges on the untested idea that car-loving Californians will drive about 100 miles from the Los Angeles area, pull off busy Interstate 15 and board a train for the final leg to the famous Strip.
Planners imagine that millions of travelers a year will one day flock to a station outside down-onits-luck Victorville, a small city where shuttered storefronts pock the historic downtown.
An alliance of business and political rainmakers from the Strip to Capitol Hill is backing the project that could become the first highspeed system to break ground under President Obama’s push to modernize the U.S. rail network — and give the Democratic president’s re-election prospects a lift in battleground Nevada.
Transportation Secretary Ray Lahood has publicly blessed the train — it means jobs, he says — and it’s cleared several regulatory hurdles in Washington.
Yet even as the Federal Railroad Administration considers awarding what would be, by far, the largest loan of its type, its own research warns it’s difficult to predict how many people will ride the train, a critical measure of financial survival, an Associated Press review found.
There are other skeptics, as well.
“It’s insanity,” says Thomas Finkbiner of the Intermodal Transportation Institute at the University of Denver. “People won’t drive to a train to go someplace. If you are going to drive, why not drive all the way and leave when you want?”
Construction cost projections have soared to as much as $6.5 billion, not including interest on the loan. Some fear taxpayer subsidies are inevitable.
Mr. Reid, Nevada Democrat, and other supporters point to research that shows 80,000 new jobs, but FRA documents show virtually all those would be temporary — no more than 722 would be permanent.
Victorville Mayor Ryan Mceachron envisions a bustling transportation oasis with a hotel, restaurants, maybe even homes, on the proposed station site. He believes drivers can be enticed out of their cars, even in a region where the notion of rail travel can seem as distant as a New York subway.
The company is “going to have to market, and market hard, in order to get the ridership they need to support paying back the loan,” the mayor says. “I think you can change the thinking.”
Along with Mr. Reid, the president’s most influential ally in Congress, the plan is being advanced by casino developer and contractor Anthony Marnell II, whose credits include building the Bellagio and Wynn Las Vegas hotels and who heads Marnell Cos., the majority shareholder in Desertxpress; project consultant Sig Rogich, a Republican adviser to two presidential campaigns who founded Nevada’s most influential lobbying and advertising company; and Canadian transportation giant Bombardier, a Desertxpress strategic adviser that wants to supply its rail cars.
A decision on the loan is not expected until midyear, but the company has spent some $30 million sharpening its plan and refining ridership projections. Rising gas prices and increasing traffic congestion could help ticket sales, and the company is touting reduced air pollution from fewer cars on the road.
“It’s Victorville that makes the project work,” said chief executive Andrew Mack.
Far from being a train from nowhere, company planners see the struggling city of 115,000, once a stop on storied Route 66, as a collection point for millions of drivers heading north to Las Vegas. Bringing the line deeper into the populous Los Angeles area would raise formidable challenges, Mr. Mack said, from crossing numerous freeways to finding space for track.
The lot now stippled with spindly creosote bushes has room for 15,000 parking spaces. Bags would be checked through to hotel rooms. At peak hours, trains would depart every 20 minutes. Mr. Mack says an average round-trip fare could be as low as $75, though documents estimate $100.
Round-trip flights from Los Angeles to Las Vegas can be booked for less than $100.
On clear roads, the 270-mile drive from downtown Los Angeles to Las Vegas takes about four hours. Planners say the train ride from Victorville to Las Vegas would take about 80 minutes, but it’s debatable how much time would be saved after driving to Victorville, parking, waiting for and boarding the train, and reaching a Las Vegas hotel.
The proposed station for the Desertxpress high-speed rail line to Las Vegas would be located at the end of the Dale Evans Parkway exit from Interstate 15, on the far outskirts of the Mojave Desert city of Victorville, Calif.